An unsealed court filing lays bare how Bill Schwyhart allegedly hid as much as $4.4 million and a $1.5 million mansion from creditors for the past five years.
The alleged scheme by the once prominent northwest Arkansas real estate developer is built around an October 2013 financial settlement kept secret by a confidentiality agreement until now.
Made public by a Feb. 7 court order, the 50-page document also accuses Schwyhart and his wife, Carolyn, of at least 16 instances of lying under oath in their personal bankruptcy case in Dallas.
Bankruptcy fraud became a central issue not long after the Schwyharts filed their Chapter 7 petition in July. The fraud allegations soon drew the interest of the U.S. trustee for the Department of Justice, which filed a motion to have the complaint made public.
The complaint was filed by Rogers lawyer Brian Ferguson on behalf of his CHP LLC.
CHP gained access to Schwyhart’s confidential settlement by court order after filing a lien claim on a grand residence in the gated Pinnacle Country Club development. The Schwyharts lived in the 9,484-SF home but on paper don’t own it.
CHP was prohibited from publicly disclosing any details of the settlement, which led to its attempt to file the complaint under seal.
The complaint objects to the couple’s discharge from bankruptcy and seeks to lay claim to assets surreptitiously owned by the Schwyharts through a web of limited liability companies. CHP holds two judgments against Bill Schwyhart related to delinquent loans backed by his personal guaranty.
A line of creditors holding millions of dollars in judgments against Schwyhart and his business ventures formed after the 2008 real estate meltdown laid waste to his highly leveraged holdings.
Before that cataclysm, Schwyhart claimed a personal net worth of $75 million.