Coach Accused of Bankruptcy Fraud by Creditors

Creditors filed complaints with the U.S. Bankruptcy Court this week alleging that John Smith, former coach for the Arkansas Razorbacks football team, committed two acts of fraud when he filed for Chapter 7 bankruptcy protection. Smith had invested in several real estate projects in Kentucky along with five other investors in 2006. With the difficulties in the housing market, Smith found himself unable to keep up with payments to a number of creditors. He included approximately $40 million in liabilities connected to the investment when he filed for bankruptcy in September last year. The fraud allegations stem from what is being described as "unusual" stipulations in his contract with the Razorbacks for the 2012 season. The contract was arranged so that Smith would receive the majority of his coach's salary in two lump sums after the football season was over. He was to receive two payments of $300,000 each at the end of December 2012 and at the end of February 2013. Any income received by a bankruptcy petitioner after filing for Chapter 7 bankruptcy does not need to be reported on the forms according to law. Creditors say that Smith purposely had his contract written this way so he would be eligible for Chapter 7 protection. Smith and the Arkansas athletic director explained that this arrangement in his contract was for the purposes of Smith's retirement and was not done in an effort to cheat creditors or the bankruptcy system. Creditors also accuse Smith of transferring assets to his wife's trust and to his daughter in an effort to conceal funds which should have been available to pay his obligations. Work with a bankruptcy lawyer as soon as you are considering filing for bankruptcy protection to ensure your best interests are protected.

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Filing for bankruptcy can be a complicated issue no matter how simple or complex the state of your financial situation. It is important that you begin consulting with a highly knowledgeable bankruptcy attorney right away if you find yourself overwhelmed with debts and with no foreseeable way to get on top of them. Contact us at the Price Law Group to discuss your specific situation. We have successfully represented clients in cases involving Chapter 7, Chapter 11 and Chapter 13 bankruptcies as well as in matters involving creditor abuse and collection defense. We carefully go over all options with our client and look for the best solution for their circumstances. See what we may be able to do to help you with a fresh financial start!