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

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

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

Beth Hall

First-year Arkansas head football coach John L. Smith has seen challenges off the field as well as on.

Mark Friedman

John L. Smith’s investment group created the Poplar Woods subdivision in 2007. Only a handful of homes have been built at the site.

Mark Friedman

Residents and guests are reminded to “Have a Nice Day” as they leave the Poplar Woods division. Homes start at $650,000, but only a handful of lots have been sold.

Mark Friedman

Poplar Woods failed to attract many buyers.

Mark Friedman

Lots are still for sale at Poplar Woods.

Mark Friedman

The abandoned offices of Canfield Development Co. in Louisville, Ky., as they appeared Oct. 15. The offices also were used as the headquarters for several of the limited liability companies that John L. Smith and others invested in with Canfield Development’s owner, R. Stephen Canfield.

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“I’m always looking for high-quality in good locations,” he told the business journal in 2007.

Great Recession

The next year, of course, the Great Recession reached full force. But that didn’t stop Canfield, who was pushing forward with plans to bring 450 home lots to the Louisville market.

In June 2008, he told the Louisville Business Journal that he decided to continue the projects because of the success of his other developments.

“I’ve got a lot to sell,” Canfield said. “But we’ve been really busy. … I’m cautiously optimistic.”

And he noted that there was interest in his developments.

“Good houses in good developments in good locations always sell,” Canfield said in the 2008 article. “The market is good — not great like 2005 — but it is good.”

But the housing market wasn’t good.

In 2008, home sales in Jefferson County plummeted 23 percent to 11,369. The financial strains of Canfield’s LLCs were beginning to show.

“Although the LLCs Operating Agreements make no ex-press mention of capital contributions beyond initial contributions, Canfield, as manager of the LLCs, made numerous and substantial capital calls upon the LLCs’ members in the past several years,” Smith said in his Aug. 13, 2011, affidavit.

Smith said he paid Canfield’s LLCs $15,000 in December 2008.

Dr. Juneja said in court filings that he contributed more than he should have to keep the LLCs going. He didn’t return a call seeking comment.