Kosar runs into financial trouble

Browns Football great Bernie Kosar filed for bankruptcy protection in Florida on Friday. The quarterback who managed to outsmart the National Football League draft system so he could play in Cleveland apparently could not beat a struggling national economy and the collapse of Florida's real estate market. The Boardman native and president of the Cleveland Gladiators arena Football team said his debts fall between $10 million and $50 million and his assets are worth between $1 million and $10 million. In a prepared statement, attorney Michael Kasen said Kosar "has become the latest victim of the economic downturn and collapse of the real estate market." Kasen added that Kosar "misplaced trust and reliance on those close to him to manage his businesses and finances." Gladiators owner Jim Ferraro also blamed Kosar's financial problems on people close to the Football great abusing his trust. "He's been totally taken advantage of by people you would never expect to do that," said Ferraro, who has known Kosar since his days at the University of Miami. Filings show Kosar, 45, owes Ferraro $725,000. "I'm not mad about that at all," Ferraro said. "I'm not upset with Bernie. I'm not holding his feet to the fire on things. He's got enough going on right now. Bernie did not borrow money from anybody without the intention of repaying it." In filings, Kosar claimed more than half his major debts were related to real estate investments in Florida, where he played Football in his college years at the University of Miami and later for the Miami Dolphins. The collapse of real estate values in that state has been among the worst in the nation. In Miami, home values nearly tripled between 2000 and 2006. Now, prices have dropped back to 2003 levels. In March, home values had fallen 28.7 percent from the previous year, according to Standard & Poor's/Case-Shiller home-price index. In recent months, Kosar has had three real estate developments in Florida go bad. In his debts, he lists $9.7 million owed to Florida Bank for foreclosures on apartment and condo developments in Pinellas County, home to Clearwater and St. Petersburg. Those bad investments make up more than half of Kosar's top 20 debts. On top of those, he owes $500,000 to real estate developers in Florida. But he owes others as well, including several groups in Northeast Ohio. Local debts include: The Cleveland Browns - nearly $1.5 million. Representatives from the team did not return calls Friday evening. KeyBank - $3.2 million for personal loan guarantees. Chess Financial - more than $300,000 to the Pepper Pike investment company. Company President Carl Walter did not return calls Friday. Filings show that Kosar owes money to both his father and his brother, but the amounts were not part of his filing in Miami. He also owes his ex-wife, Babette, more than $3 million from their divorce settlement. Mantua Land Co., a Kosar company that owns property in Portage County, also shows up in filings as a creditor. The same goes for Bernie's Steakhouse, a Florida restaurant that closed last year. Kosar had planned to bring that restaurant to a development project in the Flats, but that project already had been threatened by both the closing of the Florida steakhouse and a lack of funding for the development. Randy Ruttenberg, a principal at Flats project co-developer Fairmount Properties, said his group has been in contact with Kosar and is aware of his financial condition. Ruttenberg added that the project is on track. "We have made phenomenal progress and are highly confident that we can bridge the funding gaps to get this project under way this fall," Ruttenberg said. He later said, "We're optimistic that Bernie will get through this just fine, and we intend to continue talking about his steakhouse in the Flats." Court filings paint a picture of Kosar as someone who was falling behind on all his payments. He owed more than $80,000 on his Bank of America credit card. Smaller creditors ranged from pool service companies to jet charter services to an Enterprise rental car outlet in Westlake. He owes more than $443,000 in back taxes to the federal government and Broward County, Fla. Most of that is in disputed claims for back income taxes in 1996 and 2000. He owes property taxes on his Weston, Fla., home for the past two years. That house is on the market for $3.5 million. Kasen said Kosar would overcome his financial difficulties. "Luckily, Bernie lives in a country that believes in second chances, and Bernie plans on overcoming this adversity like he has so many times on the field of play," Kasen said in a prepared statement. "Bernie is no stranger to being an underdog before and has thrived from this position his entire life." Best known as the Browns' quarterback from 1985 to 1993, Kosar has long been considered one of the smartest players in the game. Physically, he often didn't match up well against opposing teams, but he could outthink them. In 1985, he carefully avoided filing paperwork with the league but said he wanted to be drafted and play for the Browns . Teams in Houston and Minnesota threatened to sue the NFL for not making Kosar eligible to other teams. In the end, the league let Kosar choose to play where he wanted. His $5.2 million contract made him the youngest quarterback and the highest-paid player in Browns history. Plain Dealer reporters Shaheen Samavati, Rachel Dissell and Dennis Manoloff contributed to this story. To reach this Plain Dealer reporter: rschoenb@plaind.com, 216-999-4059