John L. Smith always believed real estate development was the safest investment of all, saying "you may not make money, but you won't lose money."

The Arkansas coach has had to rethink that philosophy in recent years after several of his land deals went bust in Kentucky. Smith told The Associated Press that he is making plans to declare bankruptcy, perhaps during the upcoming season.

"There have been some sleepless nights trying to get this resolved," Smith said. "There comes a point in time where you say 'Enough is enough,' and I want it cleaned up and whatever we have to do, we have to do."

Smith, also a former coach at Michigan State and Louisville, was hired in April to replace Bobby Petrino, who was fired after revelations that he had hired his mistress to a position in the football department and given her $20,000 in gifts. Smith was an Arkansas assistant for three seasons under Petrino before leaving in December to become the coach at his alma mater, Weber State.

Following Petrino's firing, Smith approached Arkansas athletic director Jeff Long about the job as was later signed to a 10-month, $850,000 contract. Long said Smith was up front about his financial problems during the hiring process, and he was comfortable the issues wouldn't affect Smith's ability to coach the Razorbacks.

"Certainly, initially, I had concerns, but as he explained the situation to me, it clearly became a bad investment," Long said. "There's a large differentiation for me between what we had just gone through and someone who had made a bad financial decision and put himself in a financial difficulty. But at the same there, there was nothing inappropriate other than he had engaged in a risky financial deal."

Smith said his land investments began through acquaintances while he was the coach at Louisville from 1998-2002, starting with one subdivision development and evolving from there.

As the real estate market began to slow several years ago, Smith said, he and his partners faced a difficult time maintaining their investments.

"It just got big," Smith said, who described his stake as being in the "multi-millions."

"It was a situation where we all made a little and said, 'Well, that's good. Let's see if we can make a little more,'" he said. "At that point, the bank was willing to give away money. We got in over our head with land, and then the bubble burst and all this land value dropped and we couldn't sustain it."

Smith wasn't sure exactly how much money he owed to creditors, including some of his former partners, but he has started preparing to declare bankruptcy now. He wasn't 100 percent certain he'll have to declare, but said "that's where I am proceeding to get my plate cleaned up."

One of Smith's former partners, John Mason, filed for bankruptcy in December in Kentucky, listing Smith as one of his creditors. Mason's attorney, Julie Ann O'Bryan, didn't immediately respond to e-mails sent by The Associated Press on Tuesday, but in his bankruptcy filing he listed liabilities totaling between $10 million and $50 million.

Mason's filing listed $250,000 in debt to one of Smith's investment limited liability corporations, while also listing an unknown amount of debt to Smith personally. The filing also listed numerous banks as creditors, with Fifth Third Bank in North Carolina listed as the largest. Barbara Grimsley, a spokeswoman for Fifth Third Bank, said Tuesday it was the bank's policy not to comment on customer accounts.

Smith is represented by attorney Jim Dowden in Little Rock and has representation in Kentucky.

"I think everybody got into this real estate deal, hoping to make a bunch of money," Dowden said. "Just like there are prominent families in northwest Arkansas that did, but unfortunately the recession hit and here we are."

Smith said the primary reason he's talking now is so his personal financial problems don't become a distraction during the season. The Razorbacks are expected to begin the season ranked in the top 10, with Heisman Trophy candidates at quarterback (Tyler Wilson) and running back (Knile Davis).

"From a personal standpoint, I don't want the university being embarrassed, but I'm not embarrassed," Smith said. "It's something that's happened. I made some mistakes, and to be honest with you, I'm a football coach, not a businessman."

Long, who is continuing to research potential candidates for a long-term solution as head coach — including Smith — said he doesn't believe Smith's personal financial problems will influence his ability to coach.

"I think the people that want to make more out of it than there is here will do that, regardless," Long said. "But I think those will be the minority. This is clearly to me a man who has made a poor financial choice, and I think if we look across our society today, especially in these times, we will see many very good people leading their organizations who have made some poor financial decisions. That's the way I see it."