by Chris Bahn
Posted 10/15/2012 04:02 pm
Updated 1 year ago
Arkansas Athletic Director Jeff Long said Monday that allowing Razorbacks football Coach John L. Smith to defer portions of his salary was done with the coach's retirement in mind and not as an attempt protect assets from creditors.
Smith, who faced creditors Friday in a hearing tied to his $40 million Chapter 7 bankruptcy, has a 10-month contract with the university that defers payment of 71 percent of his $850,000 salary until after the season. The deferral raised legal questions about whether Smith's salary is accessible to creditors.
Long, speaking to reporters after a noon appearance at the Little Rock Touchdown Club, said the university did not have the bankruptcy in mind when it agreed to delay payments to Smith.
"There was absolutely zero efforts by the University of Arkansas, Razorback athletics, the Razorback Foundation to assist coach Smith with hiding assets from bankruptcy court," Long said. "I've learned through this process that's not something we could do, even if we wanted to do. Certainly we were not doing that. Certainly you have to recall we were dealing with a 63-year old coach that was getting a 10-month contract. That coach was interested in his retirement."
Long said that deferring payouts is not inconsistent with other coaching contracts. He said former football coach Bobby Petrino also had portions of his salary deferred.
Coaches can choose to put off salary payments for tax purposes. It's also beneficial in some situations for the university to delay payouts. During negotiations, the sides work to structure deals that are beneficial to both parties, Long said.
On Friday, Jill Jacoway of Fayetteville, Smith's bankruptcy attorney, said creditors will consider going after the money.
"And then what we do is we come in front of Judge [Ben T.] Barry and we fight. And Judge Barry makes up his mind," she said. "And if one side or the other doesn't like what Judge Barry says, then we appeal and we appeal and we appeal."
Long has said he was aware Smith was in financial trouble, a subject that came up in an April interview for the job and again in July. But Long said Monday he did not know the extent of Smith's liabilities.
ArkansasSports360.com has more on Long's comments about Smith's finances here.