Arkansas coach Smith files for bankruptcy
Little Rock, AR, United States (4E Sports) – Arkansas football coach John L. Smith has filed for Chapter 7 bankruptcy due to bad real estate investments in Kentucky, informing a federal court that he has $25.7 million in liabilities against $1.2 million in assets, most of which is tied up in retirement funds.
In his court filing Sept. 6, Smith listed just $300 in cash on hand and $500 in his checking account. He estimates the only real property he owns as worth $2,000 from a “1/4 interest in deceased parents real estate — 8 acres in Iona, Idaho worth $8,000.00 (total).”
Smith’s move came as no surprise as he had publicly disclosed that he faced financial problems due to real estate losses he suffered when he was head coach at Louisville from 1998 to 2002.
The coach also disclosed to Arkansas before he was hired as interim coach that he would be filing for bankruptcy.
Smith declined to comment through a spokesman.
The latest court filing shows the extent of those difficulties and come during a turbulent time for Smith, whose team was viewed as a national title contender in the preseason but is 1-2 and unranked after two embarrassing losses: to Louisiana-Monroe in overtime on Sept. 8 and a 52-0 lambasting at home by Alabama last week.
According to court documents, the biggest claim against Smith is $20 million from Terra Springs LLC, in Louisville. Republic Bank and King Southern Bank in Louisville claim $2 million and $902,000 respectively. American Express is claiming $10,810.
Smith also listed two retirement accounts among his assets, one worth $602,475 that was rolled over from previous accounts in 2010, and the other a “U of A” account worth $599,430.
In a Chapter 7 bankruptcy, which is used to liquidate debts, retirement accounts are normally protected.
Smith has a 10-month contract at Arkansas worth $850,000. In the filing, Smith claimed he is paid $19,857 monthly, with $7,964 taken out in payroll taxes and $2,614 for various insurance and retirement account deductions.
“Chapter 7 is intended for an overburdened honest debtor who has no other choice,” said Scott Ehrlich, a professor at California Western School of Law in San Diego.
Smith’s latest debacle came after Arkansas, viewed as a national title contender in the preseason, lost to Louisiana-Monroe in overtime Sept. 8 and a 52-0 drubbing at home by Alabama last week.