Who said, “People who work together will win, whether it be against complex football defenses, or the problems of modern society.” If you are an Arkansas football fan, you may have guessed famed football coach Vince Lombardi. If you did, chalk up six points for your side.
What, you may ask, is such a statement doing at the start of a blog for a bankruptcy attorney? There are two good reasons for this. First, the story we’re about to focus on has deep ties to Arkansas football. And second, the outcome that resulted seems to be a clear reflection of Lombardi’s words in action.
If you are like most in Arkansas, you probably are aware that former Razorbacks head coach John Smith has been in the process of seeking Chapter 7 bankruptcy protection. He filed the paperwork in the fall of last year with the aim of getting out from under more than $40 million in unanticipated debt –- much of which was incurred by investment in property before the real estate market went belly up.
Back in February, one group of creditors sued Smith to block his efforts to discharge about $18 million of debt. They claimed that he had attempted to defraud them out of what was owed them by transferring a large chunk of money into various trusts for members of his family before he filed for bankruptcy. It was a charge Smith denied.
Late last month, word came that a settlement has been reached in regard to the suit. Under terms of the deal, according to the appointed bankruptcy trustee, Smith and his family will return some $165,000 cash that had been transferred to various trusts. In addition, Smith is to hand over property that had been valued at $600,000.
The trustee says that he’s pleased that a settlement was reached and he hopes the court will agree to the terms. He says those who received the funds in the transfer appeared to be ready to present strong defenses for why they should be allowed to keep the money in the face of the bankruptcy. He says if there had been no settlement, he might not have recovered any of it.
Source: Arkansas Business, “Former Razorback Coach John L. Smith Settles Transfer Dispute in Bankruptcy Case,” May 27, 2013