Physician Who Reopened Bradley Lumber Mill Accused of Defrauding Lender

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

In 2004, the mill had about $1 million in profit, he said. “So they got a substantial bonus that year,” he said.

That generosity, he said, would hurt the company years later when it needed the money.

Financial Trouble

In 2005, the first sign of financial trouble emerged for Bradley Lumber.

“The market went down and we already had several million dollars’ worth of trees bought in the woods,” Chambers said.

He said the trees had to be cut even at a loss. “You still have to recover as much as you can,” Chambers said. “All of a sudden instead of it being worth $3 million, they were worth $1.5 million.”

Bradley turned to Webster Business Credit Corp. for a loan in 2006. In Webster’s court filings, it said Chambers filed a financial statement that showed he had $46.3 million in assets and a total net worth of $22.4 million. He also had a related company, Bradley Timberland, which had 16,000 acres of timberland valued at $27 million as of June 2006.

Webster granted Chambers a $6 million line of credit for Bradley Lumber, only later becoming convinced that his financial statement was inflated.

“Dr. Chambers and others deliberately overstated Bradley Lumber’s inventory and receivable to Webster … in order to induce Webster into making loans that it otherwise would not have made,” Cheryl Shuffield, a CPA with Frost PLLC of Little Rock who examined Bradley Lumber’s records as part of a court order, said in her statement on July 9, 2009.

Still, Chamber said, Bradley Lumber’s business was improving back in 2006. The mill had a new product, a wooden crane mat that is used to provide stable working surfaces for heavy equipment.

“We were actually making 100 of those a day, and we were making good money,” Chambers told Arkansas Business.

Around 2007, Bradley Lumber had trimmed its expenses and its revenue was close to $15 million, on a path to having a profit that year, Chambers said.

 

 

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