Arkansas Razorbacks Football Coach John L. Smith's $40 Million Mistake

by Mark Friedman  on Monday, Nov. 5, 2012 12:00 am  

Still, a LLC member could negotiate with the lender over how much exposure of a loan he is willing to have and place that in the loan documents, she said.

She said Smith’s lesson should be “know what you’re signing, and if you need to consult with counsel, do that before you sign it.”

Arkansas Business reviewed hundreds of pages of court documents filed in a half-dozen lawsuits in Jefferson Circuit Court in Kentucky. The documents still left unanswered questions surrounding the deals and the strained relationship between some of the partners. Smith declined to comment through Zack Higbee, University of Arkansas at Fayetteville director of football media relations.

Smith Comes to Louisville

After football coaching stints at the University of Idaho and Utah State, Smith signed a five-year contract to be the head coach of the University of Louisville in 1998. He would be paid $375,000 per year, the Washington Post reported.

In his five seasons at Louisville, Smith racked up a 41-21 record. His best season was in 2001, when he went 11-2 and won the Liberty Bowl.

It was while at Louisville that Smith most likely met real estate developer R. Stephen Canfield, according to a Kentucky real estate agent, who asked not to be named because of his relationship with Canfield.

Canfield was a well-known developer in Louisville and a U of L booster. In 1985, Canfield had started Canfield Development Co., which specializes in the development of upscale single-family homes and neighborhoods throughout the Louisville area, according to the company’s website.

“The homeowners will recognize the greatest rate of return on their investments in our neighborhoods and they will enjoy the greatest sense of community due to the attention we give to … site selection and location,” the website said.

“Louisville is a college sports town,” the real estate agent said. “And these college coaches tend to become local celebrities.”

Canfield declined to be interviewed. “I would love to tell the story, but I cannot,” he said. “None of these partners are going to talk to you. They can’t because of the lawsuits.”

Smith’s bankruptcy filing indicates that he first tiptoed into real estate development with Canfield in 2002 by becoming an investor in Terra Landis LLC.



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