Arkansas Head Coach John L. Smith Facing Bankruptcy

Arkansas Head Coach John L. Smith

Arkansas head coach John L. Smith has some financial issues.  The downturn in the real estate market has Smith considering bankruptcy.

Smith told the Associated Press he is in the process of declaring bankruptcy, perhaps during the 2012 season.

Smith invested in real estate with other partners in Kentucky while head coach at Louisville from 1998 to 2002.  Those investments involved the development of a sub-division and evolved from there.

As the real estate market began to slow Smith and his investors were in a bind and become unable to meet their financial obligations.

Smith told the AP his investment was in the “multi-millions.”

``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,''' Smith told the AP. ``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.''

John Mason, a former partner with Smith, declared bankruptcy in December 2011 in Kentucky.  According to the AP Mason listed liabilities totaling between $10 million and $50 million.
Smith is talking now because he doesn’t want this to be a distraction during the season.

When an investment goes good initially it can become very seductive.  Investing is much like gambling, you have to know when to cash out when the market peaks. 

Smith has a paying job now and if Arkansas wins 10-11 games he may earn himself a much larger paycheck and a steady coaching gig. 

That might recoup some of his financial losses.