Of course, bankruptcy court ain’t exactly like the coin toss.
Filed under Arkansas Is Kind Of A Big Deal, It's Just Bidness
He owed $40 million freaking bucks? John L. Smith had $40 million bucks worth of bad debts? Man it is going to take me a few minutes to get my head around that. No wonder the brain trust in Fayetteville thought he was the perfect fit.
A bankrupt program hires a bankrupt coach to stand in for a bankrupt coach….seems fitting somehow.
Somebody loaned him $40 million bucks…think about that.
Please leave the room, BD…even your most benign post makes me think about what we ain’t and will never be. Not your fault, but there it are.
Even during the Shula and mostly even during the Bill Curry times you people expected to win every damn game…were shocked, surprised when you lost.
Over here in the world of second-tier football having that kind of expectations, and the wins to back them up kinda make me feel small and insignificant….kinda second-tier.
You misspelled “tear”.
It’s not really that unusual. He, probably along with others, guaranteed an expensive real estate development project. The project fell through, so the bank (1) sues to foreclose the property, which is probably worth a good bit less than $40mm right now, and (2) simultaneously sues each of the guarantors for the full $40mm.
The bank tries to get as much as it can wring out of the guarantors while the foreclosure is in process, and then the guarantors can sue the actual borrower (a single purpose company) to get paid back from any amount in excess of the debt that comes out of the foreclosure sale.
The guarantors pre-emptively declare bankruptcy to slow the process down. The hope is that the foreclosure will finalize before the bankruptcy, and then that $40mm number will be much smaller.
It’s not like someone actually loaned John L. Smith $40mm.
By the way, Senator, I really appreciate this post, on this morning especially.
Maybe his bankruptcy lawyers could help him with game plans, too.
Decent bankruptcy trustee ought to be able to get that money.
Sounds like some aggressive banks let John L. sign a pile of personal guarantees without any scrutiny.
As I said above, it’s probably just one really big personal guaranty. And there are probably other, less famous, guarantors you don’t hear about. And the bank didn’t underwrite the loan based on JLS’s ability to repay $40mm. It made the loan because it thought the value of the RE development, once completed, would be a lot more than $40mm.
But, yes, the trustee should be able to get that money, and I suspect JLS has known this all along.
That promises to be an awesome 341 meeting. Too bad it won’t be televised.
That money’s going in the creditors’ pot like somebody already posted above, but JLS looks worse the more that comes out. And by extension so does Arkansas. What a nightmare of a season…..just when i was thinking how bad ours had become!
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