Creditors after FLC football coach
Smith allegedly has $40.7M in debt; suspected of trying to hide $2M
April L. Brown/Associated Press file photo
Fort Lewis College’s new football coach arrived this year with hopes of turning around the college’s lackluster team, which went 0-10 last season, but he also apparently brings $40.7 million in debt.
The Associated Press reported Friday that creditors are trying to block John L. Smith from liquidating the debt, saying he moved several properties and more than $2 million from his holdings before filing for Chapter 7 bankruptcy.
FLC hired Smith in January, and he started this month.
When reached Friday evening, Smith said he can’t comment about pending litigation, but he doesn’t expect his debt problems to distract from his mission as head coach.
“We were involved in different deals,” he said. “I don’t know what to say about it. It’s all in litigation at this point.”
He hopes the FLC community and Durango as a whole accept his difficulties.
“I would hope they would be understanding and say, ‘Yeah, he got involved in a number of different ventures which went south,’” Smith said. “I think that’s about all you can say.”
Before arriving at FLC, Smith was the interim football head coach at Arkansas, a premier Division I team. He has more than 40 years of coaching experience, including 19 years as a head coach at the Division I level.
He was not retained as head coach in Arkansas after the 2012 season.
FLC President Dene Kay Thomas and Athletic Director Gary Hunter said they were able to lure him to FLC to lead the Division II Skyhawks.
It was a rare move for a football coach of Smith’s stature.
Thomas said Friday evening she was aware of Smith’s financial situation before recruiting him.
“He was very open with me about his situation before we hired him,” she said. “It has no bearing on his ability to coach football.”
Federal bankruptcy court filings by Smith’s creditors say he cashed $1 million in certificates of deposit in 2008, and he is “unable to explain the current location of the funds.” The documents also allege that in 2008 and 2009, Smith transferred $1.16 million to his wife, son and daughter-in-law. Most of that sum, $975,000, went to the Diana Smith Trust, which is named for Smith’s wife.
Smith has said Kentucky real estate investments that went sour led to his financial troubles. He disclosed to the AP last summer that he expected to file for bankruptcy protection and hoped his financial woes wouldn’t be a distraction during the season as he took over for the fired Bobby Petrino.
In 2008, Smith shifted ownership of real estate – two properties in Idaho and one in Michigan – to the trust in his wife’s name. The filings allege that Smith transferred his interest in a company, JLS Enterprises II LLC, to his wife’s trust in 2008, and between then and 2012, Smith signed documents as a “member” of JLH, which held property in Kentucky.
On Sept. 4, 2012, that entity was folded into Fourth and One LLC, of which Diana Smith was the sole member.
Smith filed for bankruptcy two days later.
Smith’s lawyer, Jill Jacoway of Fayetteville, Ark., didn’t return phone and email messages seeking comment.
As of Friday, Jacoway had not filed a response to the creditors’ complaint. A lawyer for the creditors, Thomas Robertson Jr., said he didn’t want to discuss the case outside of court.
Arkansas hired Smith away from his alma mater, Weber State, last April when it urgently needed an interim coach. The school had fired Petrino after he hired his mistress to work in the football program.
Arkansas entered last season ranked in the top 10 but lost to Louisiana-Monroe in its second game and limped to a 4-8 finish.
Smith had a 10-month contract for $850,000 structured so that much of it would be paid on a deferred basis. Athletic director Jeff Long said during the season there was no intent by the university to keep that money from being seized in the bankruptcy proceeding.
But the creditors’ filing alleges that Smith “intended to place such funds beyond the reach of the creditors.”
Jacoway said after a hearing last fall that U.S. Bankruptcy Judge Ben Barry will decide what happens to the money Smith earned at Arkansas.
“And if one side or the other doesn’t like what Judge Barry says, then we appeal, and we appeal, and we appeal,” she said.
The creditors include Terra Springs LLC, John D. Rhodes Revocable Trust, the Rhodes Family Limited Partnership, John D. Rhodes, Gerard J. Hart, Spring Farm Glen LLC, Spring Farm Pointe LLC, Terra Acquisitions LLC and Branch Banking and Trust Co.
Barry has assigned a trustee to handle any of Smith’s assets.
In a previous interview with The Durango Herald, FLC’s Hunter said he expected Smith’s annual contract to be a bit more than the $67,000 that previous head football coach Cesar Rivas-Sandoval made.
Smith said he is enjoying Durango and his first week at FLC.
“We’re working hard on the recruiting trail,” he said. “We’re excited to be here, we love Fort Lewis and love the snow and love the mountains. We’ve just got to get the football team back and try to get ready for spring ball.”
AP Sports Writer Kurt Voigt contributed to this report.
STEVE LEWIS/Durango Herald file photo