Schwyhart Trial Marks First in Pandemic Timeline

Schwyhart Trial Marks First in Pandemic Timeline
The Earle Cabell Federal Building in Dallas, one of the courtroom locations for the Northern District of Texas. (Google Maps)

Did you know the recent fraud trial of Bill and Carolyn Schwyhart represented a first for the U.S. Bankruptcy Court for the Northern District of Texas?

The three-day event was the first in-person trial in the Dallas court since COVID-19 disrupted the American legal system.

That was the pronouncement at the end of closing arguments on June 24 by Bankruptcy Judge Harlin Hale, who presided over the proceeding.

Hale will be ruling on whether a list of false statements made by the Schwyharts in connection with their nearly two-year-old bankruptcy case rises to the level of false oaths.

Hanging in the balance is whether the couple will have their debts discharged or whether creditors will be free to continue pursuing claims against them.

The judge said he would deliver a ruling in July that he fully expected to be appealed by one party or the other. The other party in this case is CHP LLC, led by Brian Ferguson of Rogers.

Ferguson is trying to collect on more than $800,000 in judgments against Bill Schwyhart, once a big-shot northwest Arkansas developer who left millions of dollars of debt and judgments in the wake of his post-2008 meltdown.

He believes Schwyhart is hiding assets, fruits from a once secret 2013 settlement that produced $3 million and a $2 million mansion in the gated Pinnacle Country Club neighborhood of Rogers.

Despite the COVID-19-inspired courtroom protocol that included protective masks, face shields, sanitized evidence binders and more, a viral kerfuffle erupted on June 24.

“I’m not comfortable with my client handling the binder handled by Mr. Ferguson,” said Melissa Hayward.

The stated basis of her objection?

Ferguson is from the COVID hot spot of northwest Arkansas. His delivery of the binder posed a health threat to Bill Schwyhart, who was on the witness stand.

At the end of the day, Judge Hale asked the participants to notify the court if anyone developed COVID symptoms.