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Falling star Take a look back at Michael Vick's rise to NFL superstardom, his fall following his involvement in dogfighting and his comeback attempt. more photos

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updated 5:53 p.m. ET March 31, 2009

FLOWERY BRANCH, Ga. - Michael Vick has agreed to pay the Atlanta Falcons at least $6.5 million as part of his bankruptcy case, moving closer to cutting ties with a team that doesn’t want him back.

The settlement was reached ahead of Vick’s bankruptcy hearing in Virginia on Thursday. The suspended quarterback arrived in his home state Monday afternoon and was being held at Western Tidewater Regional Jail in Suffolk, Va.

The Falcons are trying to trade Vick, who is still barred from the NFL as he serves out a nearly two-year sentence for operating a gruesome dogfighting ring. If no deal is reached, Atlanta will likely cut its former star before the start of training camp.

“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 settled their claim that Vick owed them nearly $21.2 million for bonuses he received before his guilty plea to federal dogfighting charges.

After an arbitrator sided with the team, the players union took the case to federal court. A U.S. district judge reduced the amount to $3.75 million, and the case remains on appeal.

“To resolve uncertainty over the amount of the Falcons’ claim, the parties have determined that the Falcons will receive an allowed general unsecured claim in the debtor’s bankruptcy case in the amount of $7.5 million,” said the court filing, which was entered last week. “If the district court’s ruling is ultimately affirmed on appeal, the amount of the Falcons’ claim will be reduced to $6.5 million.”

McKay said the settlement wouldn’t necessarily speed up any decision to trade or cut Vick, though the Falcons’ hierarchy — from owner Arthur Blank on down — has made it clear he will not play again for Atlanta.

Vick’s bankruptcy lawyers, Peter Ginsberg and Paul Campsen, did not return phone calls seeking comment.

The suspended NFL star was being held in a general population block at the Suffolk jail 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.

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