Physician Who Reopened Bradley Lumber Mill Accused of Defrauding Lender

by Mark Friedman  on Monday, Dec. 19, 2011 12:00 am  

Dr. F. David Chambers said he couldn’t sit by and watch his friends and patients lose their jobs when Potlatch Corp. closed its hardwood mill in Warren in 2002, leaving about 70 people out of work.

So Chambers bought the mill that year and quickly had Bradley Lumber Co. buzzing again.

That’s where the good news ends. The mill shut down again in 2008, when Webster Business Credit Corp. of New York declared Bradley Lumber’s $2.88 million worth of loans in default.

Webster paints Chambers not as a good-hearted doctor who tried to help the south Arkansas city of 6,000, but as a deadbeat who inflated financial statements to get the line of credit and then filed a “frivolous” counterclaim to delay paying.

Since 2008, Webster and Chambers have been fighting in U.S. District Court in El Dorado over the debt and who is responsible for the collapse of the mill.

So far, Webster is winning. U.S. District Court Judge Robert Dawson ruled that Chambers’ company would have to pay Webster the $2.88 million for the defaulted loans, which Chambers had personally guaranteed.

Nearly all of Chambers’ allegations of wrongdoing against Webster have been dismissed, but the case is set for trial in March.

But that’s not all. Chambers, through another one of his companies, Bradley Timberland Resources LLC, has another lawsuit pending against Webster involving the sale of Bradley’s timberlands.

On top of that, there’s still more bad news for Chambers. In 2010, Chambers was trying to sell the mill to Oasis Trading LLC of Warren in a lease-purchase agreement. The deal fizzled when the mill burned in September 2010, causing $4.1 million worth of damage.

The mill’s insurance carrier, Axis Surplus Insurance Co., said it didn’t know who should get the $3.88 million settlement money because of all the liens on the property, so it filed a lawsuit to let the court decide.

In addition to Webster being owed money, the Arkansas Development Finance Authority has a claim for $2.65 million and the Arkansas Economic Development Commission has a claim for $1.3 million. And Oasis Trading said it should receive $1.18 million for its improvements and inventory at the mill. That case is pending in U.S. District Court.

Chambers told Arkansas Business last week that he invested his life savings in the mill.

 

 

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