Mike Matheny could lose millions after judge’s ruling in foreclosure case

Shortly after being named manager of the St. Louis Cardinals in November of 2011, the St. Louis Post-Dispatch reported on Mike Matheny’s financial and legal troubles that ended up costing his family their dream house and forced them to move in with his in-laws.

Now comes words that Matheny, who took his legal battle with Business Bank of St. Louis to the Supreme Court of Missouri, has lost his foreclosure case, and could end up losing millions more as a result.

From the St. Louis Post-Dispatch:

Judge Tom DePriest ruled Jan. 11 in favor of Business Bank of St. Louis and against Matheny and his wife, Kristin.

The ruling could cost Matheny millions.

Matheny had sought to develop a stretch of land along Highway 40 in the Chesterfield Valley. Matheny and a partner, former St. Louis indoor soccer player Brett Phillips, borrowed more than $11.8 million from the Business Bank of St. Louis.

However, plans for the commercial property went south as the real estate bubble crashed. Matheny, citing the "need to protect our family's interest," eventually stopped making payments on the loan.

In June 2010, the bank sued him for the money. The land, which includes the former U.S. Turf headquarters and 11 adjoining acres, was foreclosed on by the bank.

At the time of foreclosure, it’s reported that Matheny and Phillips owed the bank in excess of $10 million in interest and expenses, but as the original Post-Dispatch report notes, that total was more than cut in half by the selling of assets, including Matheny’s home to a private investment company.

In July 2010, the bank scheduled a public auction for the two Chesterfield Valley properties. The bank then bought the two commercial properties for a combined $4.5 million, an amount that was credited to the loan debt.

Prior to a scheduled foreclosure, Matheny's Wildwood home was bought by a private investment company for $1.9 million. Per the Mathenys' guarantee agreement, $1 million from the sale went to the bank.

Although the sale of assets cut the amount due on the loans, the total is still more than the $4.2 million personally guaranteed by Matheny and his wife.

No further financial details were released after Friday‘s ruling. The Post-Dispatch says there will be hearing on March 13 where Judge DePriest will listen to any objections from the Matheny camp, and we'll know then how much of that $4.2 million he still owes.

Obviously this a difficult situation for anybody to have to go through, but sadly it’s not uncommon given the state of the economy and housing markets in recent years. The good news is Matheny seems to be entrenched as the Cardinals skipper, which should help his family to land on their feet regardless of the outcome. But hopefully a few lessons will be learned — by them and by all of us — when it comes to taking financial risks that effect our families.

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