Deal dependent on appeals court

The Atlanta Falcons have reached a settlement with quarterback Michael Vick on their breach-of-contract claim that is still awaiting an appeals court decision on a grievance case.

Under the settlement, Vick has agreed to pay the Falcons $7.5 million if the team wins an appeal in the Eighth Circuit Court, and $6.5 million if the court upholds U.S. District Judge David Doty's decision that Vick is only liable for $3.75 million.

The settlement should pave the way for Vick's imminent release from the team. He has remained under contract with the team while serving a 21-month prison term for his 2007 conviction for bankrolling a dogfighting operation.

"We were able to resolve our claim in a way that was acceptable to Michael and acceptable to us," team president Rich McKay said. "It was just a good, old-fashioned negotiation."

The Falcons were awarded a $20 million claim by the NFL's special master in a grievance filed against Vick, alleging he breached his contract when he was criminally convicted. However, Doty overturned the special master's ruling, saying that Vick was only responsible for $3.75 million, a pro-rated amount of his signing bonus.

In the settlement, Vick agreed to let the appeals court make a ruling but would only pay a maximum of $7.5 million and a minimum of $6.5 million. The appeals court is expected to rule no later than June.

The settlement was reached ahead of Vick's bankruptcy hearing Thursday in Norfolk, Va. He arrived in Virginia Monday afternoon from his holding cell in Leavenworth, Kan., and is being held at Western Tidewater Regional Jail in Suffolk, Va.

Vick was being held in a general population block but had limited contact with other inmates, said Lt. Tanya Scott, the facility's spokeswoman. She said one of Vick's attorneys met with him Tuesday, but he'd had no other visitors.

A bankruptcy judge in Newport News ordered Vick to testify in person at his hearing. He was required to pay the costs of his transfer from the federal penitentiary in Leavenworth, Kan., where he's been serving a 23-month sentence for his role in the dogfighting operation.

Vick has been approved for transfer to home confinement no sooner than May 21, about two months before his scheduled release from federal custody. After that, he hopes to resume his NFL career.

It won't be in Atlanta.

"We've stated our position pretty clearly on that," McKay said.

The Falcons are Vick's largest unsecured creditor. They would receive a prorated share of any future earnings he makes, but only after his secured creditors -- such as banks and mortgage companies -- are paid. Any money the team receives from Vick would be taken off their salary cap, though this is the final season they will take a significant hit, about $7 million.

"This helps to clarify what were a lot of pending legal issues," McKay said.

Vick was once the NFL's highest-paid player, agreeing to a $130 million, 10-year deal with the Falcons in December 2004. After he went to prison, the team filed a claim to recover bonuses he had earned from 2004 through 2007.

A court-appointed expert said the team should be repaid for roster bonuses Vick received, but U.S. District Judge David Doty ruled the team could only recover the signing bonuses, significantly reducing the amount.

Vick hopes to resume his pro football career, with a large portion of his earnings set aside to resolve his bankruptcy case. NFL commissioner Roger Goodell has said he will review the quarterback's indefinite suspension after he is released from prison.

Even if another team is willing to sign Vick, he will surely take a huge pay cut from his previous deal. He was due to receive a base salary of $9 million and a bonus of $6.43 million from the Falcons in 2009. The remainder of his Atlanta contract was worth at least $45.11 million.

While Vick is still technically part of the team, the Falcons moved on a year ago when they drafted Matt Ryan with the No. 3 overall pick. He had a stellar debut season, leading Atlanta to an 11-5 record and an unexpected spot in the playoffs while earning The Associated Press offensive rookie of the year award.

Everyone in the organization looks forward to dealing with no more questions about Vick.

"I'm pretty much sure it's behind us now," running back Michael Turner said. "It's over."

Chris Mortensen is a senior NFL analyst for ESPN. The Associated Press contributed information to this story.