FAYETTEVILLE, AR - APRIL 24: New Head Coach John L. Smith of the Arkansas Razorbacks speaks to the media at the press conference to announce him as new Head Coach in the Raymond Miller Room on April 24, 2012 in Fayetteville, Arkansas. (Photo by Wesley Hitt/Getty Images)
John L. Smith may have to file for bankruptcy due to several failed real estate investments. Smith told the Associated Press that he wanted to reveal his financial problems now so they didn't cause a distraction during the season.
Arkansas Razorbacks head coach John L. Smith may have to file for bankruptcy due to several failed real estate investments, he told the Associated Press. Smith said he began making investments through acquaintances while he was head coach of the Louisville Cardinals from 1998-2002. As the market began to turn for the worse, so did Smith's properties.
"It was a situation where we all made a little and said, `Well, that's good. Let's see if we can make a little more,''' he said. "At that point, the bank was willing to give away money. We got in over our head with land, and then the bubble burst and all this land value dropped and we couldn't sustain it.''
Smith said he is making preparations to file, perhaps during the season. He still isn't sure he will have to go through bankruptcy, and didn't know exactly how much money he owed to creditors. One former partner, John Mason, filed for bankruptcy in December. His bankruptcy filing listed liabilities between $10 million and $50 million.
Smith said that he is coming clean now about his financial troubles so that they don't become a distraction during the season. Arkansas athletic director Jeff Long said that Smith was up front about the issue during the hiring process.
"Certainly, initially, I had concerns, but as he explained the situation to me, it clearly became a bad investment,'' Long said. "There's a large differentiation for me between what we had just gone through and someone who had made a bad financial decision and put himself in a financial difficulty. But at the same there, there was nothing inappropriate other than he had engaged in a risky financial deal.''
For more on Smith and the Razorbacks, head over to the SB Nation blog Arkansas Expats.