In order to strengthen for 1996–97, Smith signed striker Nigel Jemson and spent £100,000 on Leyton Orient defender Darren Purse. In order to finance these deals he sold Chris Allen to Nottingham Forest for £450,000. Oxford knocked Premier League team Sheffield Wednesday out of the League Cup en route to a fourth round exit. Oxford were fifth in the table in December 1996, but chairman Robin Herd resigned amidst financial problems at the club, and work on the new stadium came to a halt as the club debt reached £13 million. Smith raised funds by selling Elliott to Leicester for £1.7 million, and signed veteran defender Chris Whyte on a free transfer as a short-term replacement. Oxford finished the season in 17th place, but the club's financial situation became ever bleaker. Numerous players were sold, though Smith was allowed to spend £170,000 on defender Phil Whelan. Smith left the Manor Ground midway through 1997–98 with Oxford 16th in the league, and his assistant Crosby managed to maintain the club's mid-table position at the end of the season.