Posted 8/12/2013 12:00 am
Updated 7 months ago
Former Arkansas Razorbacks football Coach John L. Smith has reached a settlement with his creditors who accused him of attempting to defraud them in his $40.7 million bankruptcy case.
Now all Smith needs is for U.S. Bankruptcy Judge Ben Barry to approve it.
One of the key points of the settlement is that Smith will be allowed to discharge the $12 million he owes to the creditors who sued to block the debts from being discharged. One creditor, RLBB Acquisition LLC of Louisville, Ky., filed a lawsuit on Feb. 11 in U.S. Bankruptcy Court to prevent its debt of $4.5 million from being discharged.
As part of the settlement, Smith will pay $100,000 to RLBB from money that’s not tied to his bankruptcy case.
The settlement also will end the lawsuit filed against Smith by John D. Rhodes III, also of Louisville, and other business partners. Rhodes filed the lawsuit the same day that RLBB sought to stop Smith from discharging $8 million of debt he owed them.
If Barry approves the settlement, Smith will be allowed to discharge the $8 million debt.
Smith and his creditors agree that the settlement is “fair and equitable” and “in the best interest of the estate,” according to the joint settlement motion, which was approved by several attorneys, including Smith’s lawyer, Jill Jacoway of Fayetteville, and the trustee, John Terry Lee of Siloam Springs.
Smith filed for bankruptcy protection in September and listed $1.3 million in assets.
Smith, who was on an interim, 10-month contract with the UA football program last season, will coach this fall at Division 2 Fort Lewis College, a liberal arts college in Colorado.