AUSTIN, TEX., JULY 31 -- John B. Connally Jr., a former treasury secretary and three-time Texas governor, filed personal and business bankruptcy papers today.
Connally made the filings in U.S. Bankruptcy Court in Austin, said Bob Williams, U.S. District Court deputy clerk in Austin.
Barnes-Connally Partnership, which Connally formed with former lieutenant governor Ben F. Barnes after Connally's unsuccessful try for the 1980 Republican presidential nomination, filed for liquidation under Chapter 7 of the bankruptcy laws. Connally himself filed under Chapter 11 for protection from creditors.
The business, primarily real estate development, was formed during the boom years in the early 1980s. It struggled after Texas' economic boom went bust.
From 1981 to 1986, Connally and Barnes borrowed heavily and built $200 million worth of office buildings, shopping centers, houses and apartments in Texas and New Mexico.
The collapse of oil and gas prices and a soft real estate market left Connally and Barnes struggling to pay a debt they estimated at $170 million.
Among the partnership's developments were the troubled Estates of Barton Creek in Austin, as well as projects at South Padre Island on the Texas Gulf coast and Houston. They also had a condominium development in New Mexico.
The partnership's bankruptcy filing listed about 300 creditors.
In a statement, Connally said his assets would be auctioned off to help pay creditors.
"I regret that acquisitions of a lifetime must now be lost, but I willingly sacrifice them in an attempt to repay those who had faith and confidence in me," Connally said.
Connally, 70, and his close friend and political partner, President Lyndon B. Johnson, were dominant forces in Texas politics for years until the early 1970s.
Connally, who was three times elected governor of Texas as a Democrat, joined the Nixon administration as secretary of the Treasury in 1971.
He presided over the imposition of wage and price controls and helped set in place the dismantling of the international monetary system that had prevailed since the end of World War II.
After Johnson's death in 1973, Connally switched from the Democratic to the Republican Party.
The following year he was indicted by a Watergate grand jury but was acquitted of charges that he accepted a $10,000 bribe from milk producers to persuade then-President Richard M. Nixon to raise price supports for dairy products.
Connally was secretary of the Navy under President John F. Kennedy and returned to Texas to be elected governor in 1963. He was injured in the Nov. 22, 1963, assassination of Kennedy.