Contract negotiations between John L. Smith and the University of Arkansas were consistent with the handling of other coaching contracts, an athletic department spokesman said Monday.
USA Today reported earlier Monday that Smith had deferred payment of 71 percent of his $850,000 salary. He arranged to have $300,000 paid on Dec. 31 and $300,000 paid on Feb. 23. All but the $250,000 he is getting from the UA is coming from the Razorback Foundation.
Smith's 10-month employment contract with the UA, signed in July, has fallen under scrutiny in light of his $40.7 million Chapter 7 bankruptcy, filed Sept. 6. The deferral raises legal questions about whether Smith's salary is accessible to creditors.
UA athletic department spokesman Kevin Trainor said it is not out of the ordinary for coaches to negotiate deferred payment as part of their contract.
"It's consistent to say we work with coaches and representatives on fulfillment of compensation," Trainor said. "In some instances [coaches] feel it's in their best interest to have that allocated in a certain way."
Smith, who has his first meeting of creditors scheduled for Friday in U.S. Bankruptcy Court in the Western District in Fayetteville, signed his employment contract on July 10. He finalized his personal services contract with the Razorback Foundation on Aug. 30, a week before filing for bankruptcy on Sept. 6.
Arkansas officials and Smith signed a letter of agreement in April that originally stipulated half the coach's salary could be deferred. The parties agreed to defer an additional $150,000 during formal contract negotiations.
Tweaking a contract after a letter of agreement is signed is not unsual, Trainor said. While some terms changed, the total compensation paid as part of the 10-month deal remained the same.
"I think the university has been forthright in how much he is going to get paid," Trainor said. "From the get-go the compensation was $850,000. It was laid out that way in the letter of agreement that it could change."
Asked about the salary deferral during his usual Monday news conference, Smith said he would only "comment on football."
Smith reports $1.3 million in assets.
Smith's bankruptcy stems from real estate investments that foundered after the 2008 financial crisis. Smith, who joined a real estate investment partnership in 2006, now finds himself entangled in liabilities that have also caused at least one of his partners, bank executive James Mason of Kentucky, into a bankruptcy of his own.
Arkansas Athletic Director Jeff Long, who declined comment Monday, said in July he knew of Smith's financial troubles when he considered Smith to be head coach. Long said Smith was upfront about the possibility of bankruptcy, but it's unclear if the UA was aware of the breadth of Smith's liabilities.
"As Jeff has said before, he was aware that John L. had some financial difficulties and was working through those as he had done for a number of months and for a number of years before," Trainor said. "This was not a new thing for John L. Smith. This was a situation he'd been working on for a while."
The university considers Smith's bankruptcy a "personal, financial issue," Trainor said.