The Broke and the Beautiful: Hot Edition

This week on The Broke and the Beautiful, the trustee for Scott Rothstein’s law firm makes a slam dunk with a Miami Heat settlement, and college football coach John L. Smith may enter bankruptcy. Also, Thomas Kinkade’s wills won’t be in the dark.

Things are cooling down a bit for the Miami Heat and affiliate Basketball Properties Ltd. as they settle litigation with the  trustee for Ponzi-scheme operator Scott Rothstein’s defunct law firm, the South Florida Business Journal reported. Herbert Stettin, the bankruptcy trustee for Rothstein Rosenfeldt Adler PA, sued the NBA team for $156,000 last October. The deal, which still has to be approved by a bankruptcy judge, shows that in exchange for dropping the lawsuit, the Heat and its affiliate would reduce to $625,000 their $3 million claim of losses from Rothstein’s $1.2 billion-plus Ponzi scheme. They’d also take on a lower priority on the creditor-payment scheme.

College football coach John L. Smith is planning to hike himself up to bankruptcy court, the Associated Press reported. Smith, whose Kentucky land deals didn’t go exactly as planned, may even declare bankruptcy during the next season. “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,” he told the AP.

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

The battle over Thomas Kinkade’s wills will stay in the public light—for now, anyway. That’s because a judge is holding the case over until Aug. 13, the San Jose Mercury News reported. Kinkade’s widow, Nanette Kinkade, disputes the two handwritten wills brought forth by her deceased husband’s girlfriend, Amy Pinto-Walsh. Pinto-Walsh says the wills give her Kinkade’s estate, $10 million and authority over $66 million in artwork. Nanette Kinkade, who was estranged from Kinkade at the time of his death but who is the estate’s administrator, had sought to have the matter considered by a private arbitration panel, but Judge Thomas Cain wouldn’t give it the OK.

Kinkade, who died in April of an accidental overdose of alcohol and prescription Valium, was arrested on drunken-driving charges shortly after the June 2010 bankruptcy filing of Pacific Metro LLC, the manufacturing arm of his art empire. Pacific Metro emerged from bankruptcy last year.

He isn’t there yet, but Japanese movie producer Takashige Ichise is embarking on a scary pursuit: liquidation. According to Variety, the producer of horror movies including the original “Grudge” and “Ring” franchises will liquidate Oz Co., his production company. Variety notes that the fate of Ozla Pictures, Ichise’s Los Angeles company, isn’t known, and all of Ichise’s websites are down.

Redwood Lanes hasn’t been spared from bankruptcy. According to the Business Review, the New York bowling alley, which hosted the first live telecast on ABC of a Professional Bowlers Tour half a century ago, filed its Chapter 7 bankruptcy petition this week with debts of $315,000. Court papers show that its $300,000 in assets include various bowling equipment, kitchen equipment and booze, including “miscellaneous opened bottles of liquor” worth $1. The bowling alley’s sales last year fell to $451,000 from $513,000 in 2010.

Write to Melanie Cohen at [email protected]. Follow her on Twitter at @MelanieLisa.