A U.S. Bankruptcy Court judge has issued an order that will allow Philadelphia Phillies pitcher Cole Hamels to pursue an arbitration claim for more than $779,000 against his former financial adviser, who in September filed for Chapter 7 bankruptcy protection.
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Cole Hamels is listed in Billy Crafton’s bankruptcy filing as a creditor.
Photo by: GETTY IMAGES
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Judge Christopher Latham earlier this month ruled that Hamels and Aaron Shea, a former NFL tight end who is now the Cleveland Browns director of player engagement, could both proceed with their arbitration cases against their former financial adviser, Billy Crafton. Latham noted that both Hamels and Shea alleged in separate arbitration cases that Crafton “violated federal and state securities fraud statutes, breached fiduciary duties and otherwise committed fraud.”
Hamels and Shea are two of 12 current or former athletes who are listed in the bankruptcy filing as creditors, and most have filed either lawsuits or filed for arbitration against Crafton, who worked as a financial adviser for many athletes, including MLB, NFL, NHL and NBA players. Crafton has claimed assets less than $250,000 and liabilities in excess of $20 million in bankruptcy filings.
Among the other athletes who are creditors in the bankruptcy case are Brooklyn Nets guard Jason Terry; Philadelphia Eagles tight end Brent Celek; and former NFL quarterback A.J. Feeley and his wife, soccer player Heather Mitts. Many of the players are seeking the return of financial losses they contend they suffered when Crafton was their financial adviser.
A Chapter 7 bankruptcy filing initially stays all court and other legal actions against the debtor. A party to the filing, however, can seek relief from the stay from the bankruptcy court.
Shea and Hamels did that.
In his order, Latham noted that both Shea and Hamels had filed claims with the American Arbitration Association in 2012 and both cases had completed most or all discovery and both were nearing trial when Crafton submitted his bankruptcy filing. Hamels and Shea “may proceed with arbitration in their respective forums,” Latham wrote in his order.
It was not previously known that Hamels had filed a claim against Crafton, but that arbitration claim was attached to his motion for relief from the stay that was filed in the case.
Since Latham granted the requests by Shea and Hamels to proceed with arbitration against Crafton, an attorney representing current or former NFL players Matt McCoy, Freddy Keiaho and Patrick Surtain has filed a similar motion asking to proceed with an arbitration case they had filed against Crafton in San Diego in July. A hearing had not been set on that motion as of last week.
Crafton’s bankruptcy attorney did not answer multiple requests for comment. Attorneys for Hamels and Shea also did not return inquiries for comment.
