Matheny still dealing with financial setback
Monday, November 21, 2011
ST. LOUIS (AP) — Mike Matheny is taking on one of baseball’s most high-profile jobs even as he continues to recover from a big financial setback.
The St. Louis Post-Dispatch (http://bit.ly/uopQop) reports that Matheny and his wife may still be responsible for more than $4 million from a business deal gone bad. The St. Louis Cardinals say they were aware of the situation when they hired Matheny as their new manager last week.
The former catcher has a number of business and property ventures. One was an attempt to develop two plots in the St. Louis suburb of Chesterfield. He borrowed heavily on the project amid poor timing: When demand for real estate dried up, Matheny found himself unable to satisfy the debt.
By May of last year, Matheny told the lender he would no longer be able to make payments, the Post-Dispatch reports. The married father of five wrote in a letter than he had been making payments “at great expense to myself and my family.”
“I certainly hope you can understand that we need to protect our family’s interest,” he wrote.
A month later, the bank filed suit.
The debt cost Matheny his 17-room estate in the well-to-do suburb of Wildwood, an estate that included an indoor batting cage, home theater, pool with a water slide, even a tree house wired for electricity and a golf area with a floating island green in the middle of a private lake.
Matheny declined comment, citing ongoing litigation.
Matheny was something of a surprise choice to replace Tony La Russa, the Cardinals’ manager who retired days after winning the World Series. Team spokesman Ron Watermon said Matheny didn’t try to hide his financial troubles.
“He was very upfront and candid about it from the start of our process,” Watermon said. “We view this as a personal issue that has absolutely no bearing on his ability to serve as our manager.”
Matheny’s financial plight is caught up in a dispute heading to the Missouri Supreme Court. The case challenges the ability of banks to collect further debts even after foreclosing on a home.
Matheny formed MPD Investments with two former St. Louis indoor soccer players, Daryl Doran and Brett Phillips, in 2005. Two years later, the partnership took out loans from Business Bank of St. Louis that totaled more than $11.8 million.
One $5.6 million note was to refinance a separate loan the partnership had for the former headquarters of U.S. Turf in Chesterfield. A $6.1 million note was to buy 11 vacant acres adjoining the building. Matheny and his wife, Kristin, personally guaranteed $4.2 million of the debt, giving the bank a claim worth up to $1 million on their home.
The real estate partnership went well at first. The trio bought a block at the WingHaven development in St. Charles County. Court documents indicate they sold it for $2.4 million more than the purchase price.
Doran left the partnership to start a gym. When the remaining partners attempted to build on their proceeds, the real estate market bottomed out and they could find only one tenant for the U.S. Turf building, leading to the crisis for Matheny.
Information from: St. Louis Post-Dispatch, http://www.stltoday.com