Friday, April 27, 2007

Ins and Outs of Bankruptcy

Several news sources report 2006 Tour De France Champion Floyd Landis is facing bankruptcy as part of the fallout from his alleged PED use. Bicycling Magazine recently reported that ASO, the TdF owners, have frozen the payment of the prize winnings from the 2006 race. I've wondered about how they handled that, and while it isn't exactly clear what the status of the money *exactly* is (did they pay out the money for the other "jerseys"?) it is worth noting this could get complicated.

The winner of the GC (General Classification, or overall race winner) is awarded the champion's share of the prize money. This is the largest sum awarded. What many casual observers likely don't know is that bike racing is a team sport. In recognition of this, historically and traditionally, the GC winners have given large percentages, and in many cases all, of their prize money to the team owners for distribution to the team.

I don't know if this is required by a rider's contract with a pro team. I would *very much* like to see one of those contracts!

Now watch how complicated this can get. If Landis is forced into bankruptcy, his winners share almost for sure will be considered an asset of his estate in bankruptcy, and belong not to him, but to his creditors. If the contract with Phonak (his old pro team) specifies distribution of his assets in the traditional way, Phonak has the status of creditor, but will get to "stand in line" as the court distributes the assets.

The Phonak Cycling Team of course doesn't exist anymore. (And it is certainly worth noting that "Phonak Hearing Systems" was merely the title sponsor of the separate entity that ran the Pro Cycling Team (I forget the exact name of that entity.) Phonak Hearing Systems is still in business, but the Pro Cycling Team is not.) The Pro Cycling team also had contracts with all their riders, and many of those riders from the 2006 TdF have found jobs with other teams, and are back in the pro peloton. Presumably, they have not been personally paid for their work in winning the 2006 TdF for Floyd, but the terms of their contract may or may not specify how that was to be done. Remember, the entity that was the Pro Cycling Team doesn't exist anymore! I'm not 100% sure, but I think that the Phonak riders unlikely to get paid, regardless of the outcome of Landis' appeals.

Now it gets really weird: imagine Landis files bankruptcy, but then prevails in his USADA case. If ASO ultimately pays out the prize money, it would go to *Landis*. Normally, the rider would have either a traditional obligation or a contractual one to turn the prize money over to the team. If bankrupt though, this money is part of Landis' estate, and it goes to the trustee for distribution to the other creditors. While the other 2006 TdF Phonak riders may claim to be creditors, exactly how a court would deal with that is a little unclear, particularly if there are no contract provisions covering it. Assuming those riders get nothing, the end result could be that the 2006 TdF winners purse would be paid out to Landis' creditors, and presumably, many if not most or all of those are for the expenses involved in his defense against the PED allegations. If this is how things play out, then ASO winds up paying for deficiencies in the way we accuse cyclists of doping. And of course, the team cyclists pay as well, and there are more than a few that think this is as it should be.

Another thing worth noting: the prize money to Landis, even though earned in a foreign country, would likely be "ordinary income" to him in the eyes of the IRS. He gets to pay tax on it, and generally, taxes owed are not dischargeable in bankruptcy. Uh oh...

Bankruptcies are technical things. IIRC, Floyd had a yellow BMC bike made up when he first won the yellow jersey. I wonder where that bike is now? If it is considered a "tool of trade" he might get to keep it as exempt property. Otherwise, you guessed it, it is part of the estate to be used to pay creditors. How bad would that suck? Make a pro cyclist sell his bike to defend a doping charge. Yeesh.

Tuesday, April 17, 2007

I got involved.

Of all the things I could write to my congressman about, I decided Floyd's case was the most important. There's just something about injustices like this that irk me. And yes, I cannibalized the letter from the FFF website (but couldn't resist rewriting parts of it.)

Here's my letter to Jay Inslee (WA 1st):

Dear Mr. Inslee;

I am an athlete and sports fan who has watched with frustration the allegations against Tour de France Cycling Champion Floyd Landis. Mr. Landis heroically won the 2006 Tour de France and days afterward saw his entire career collapse after allegations of adverse physiological testing results were announced.

As the case against Mr. Landis has unfolded, it has become clear to me that the actual sample analysis was not performed according to proper testing protocol. Also, the adjudication process conducted to date by the U.S. Anti-Doping Agency (USADA) in partnership with the World Anti-Doping Agency (WADA) appears biased against athletes in general and Mr. Landis in particular. In fact, the adjudication process is so biased against athletes that NO athlete has ever won any of the 157 adjudication cases conducted by USADA according to the Los Angeles Times newspaper. This is a troubling statistic for an instrumentality largely financed by the U.S. Government.

Mr. Landis has been drug tested at random over 60 times in his professional career and each of these tests were negative, except for the alleged positive test that was announced days after he was only the third American to win the Tour de France. The announcement was made in violation of the rules established by the testing agencies, and afforded Mr. Landis no opportunity to defend himself, or to prevent an unwarranted and grossly unfair media “ambush.” These events demonstrate a clear violation of due process and equal protection we cherish in our society. Moreover, the inherent unfairness evidenced in the presumed “guilty until proven innocent” prosecution of Mr. Landis sends a strong signal to young athletes – why play fair on the field if someone somewhere will accuse you later and strip you of your achievements? This culture of “accuse and destroy first, and ask questions later” cannot continue.

I believe the public information warrants a Congressional review of the testing protocols and procedures that produced the alleged positive test. More importantly, I respectfully request a review into the USADA adjudication process that – together with its Supplementary Procedures for the Arbitration of Olympic Sport Doping Disputes – appears to prevent athletes from receiving a fair hearing and due process of law.

In particular, I hope you will review the unfair practices of USADA as it relates to its litigation of doping offenses, including, but not limited to: (1) its denial of documents and deposition discovery, (2) apparent conflict of interest in its selection of arbitrators and of counsel, (3) strict liability, presumption of guilt and disproportionate penalties, and (4) rule violations in support of a “beat the athlete at all costs” mentality.

As an athlete subject to USADA monitoring myself, I have a personal interest in athletes competing on a level playing field, and feel that performance enhancing drugs, illegal practices, and dangerous training techniques have absolutely no place in sports. At the same time, I believe it is important for athletes to be treated fairly and justly.

Thank you for your time and attention to this matter. I would be pleased to discuss this matter with you personally at your convenience and as you deem appropriate. I can be contacted at the address above, or via email at:

Sincerely,
/s/Richard Glover
Seattle, WA

cc: Floyd Fairness Foundation, 205 Lexington Avenue, 8th Floor, New York NY 10016

trust but verify: Judging Floyd USADA/CAS-AAA, Part IV

trust but verify: Judging Floyd USADA/CAS-AAA, Part IV

This is an *excellent* commentary on the current state of Floyd's case. TBV is a great resource, complete with RSS feeds. (It would be nice to have this article, in all its parts, on one page though.)

CCNQP

"Are college campuses more dangerous than other public places?" (yes/no)

Who says a college campus is a public place? Do we mean *US* college campuses? And what is "dangerous?" Likelihood of being shot at? Of slipping and falling? Of being indoctrinated with biased ideas?

Friday, April 06, 2007

Another goofy CNN quick poll.

I continually wonder who writes these CNN quick polls. Todays is:

"Are you worried global warming will affect you?"

Not sure what this means. Does it mean I should vote yes or no if I think global warming is affecting me, but that I'm not worried about it? And what if I do worry, but my worry is insignificant? (IOW, I worry, but think I am powerless to do anything about it, so I take no action.)

How could this be reworded so as to convey usable information? "Do you think global warming will affect you?" "Have you changed anything in your life to react to global warming?"