Posted 5/27/2013 12:00 am
Updated 9 months ago
Former Arkansas Razorbacks football coach John L. Smith reached a settlement with his bankruptcy trustee to return some of the money he gave away or received before he filed for Chapter 7.
Smith, his wife and children will return $165,000 in cash and $600,000 in property to settle the “fraudulent transfer” claims, according to Trustee John Lee of Siloam Springs.
Among other problems, Lee found that, between 2008 and 2012, Smith and his wife transferred $525,000 to Smith’s wife’s revocable trust. Also during that period Smith and his wife gave their children $120,000.
The Razorback Foundation and the University of Arkansas also paid Smith somewhere between $133,000 and $167,000 before he filed for bankruptcy.
That money could be recovered for the creditors, but those who received the money “have raised potentially valid defenses,” Lee said. And there was no guarantee he would get any money if he didn’t reach a settlement.
In addition to the money, the settlement includes 44 acres of undeveloped land in Jefferson County, Ky., valued at about $600,000. Lee said he will attempt to sell the property if the bankruptcy court approves the settlement.
If you recall, in February creditors sued Smith in bankruptcy court to prevent him from discharging nearly $18 million in debt. The creditors said Smith tried to “hinder, delay or defraud” them by transferring assets to family members before he filed his $40.7 million bankruptcy last year.
In court documents, Smith had denied all “allegations of inferences of bad faith or intent to defraud.”