Physician Who Reopened Bradley Lumber Mill Accused of Defrauding Lender

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

Missing Lumber

Webster limited Bradley Lumber’s line of credit in 2007, sending the company into financial turmoil because it didn’t have the money to buy logs to be used in its mill, Chambers said.

“We ran out of hardwood logs and we could no longer build crane mats because we had no logs,” he said. “Without money to buy logs, a sawmill is just as good to you as a racecar with no gas and no tires.”

Webster had a different take on the events. It said in court filings that Bradley Lumber was allowed to borrow more than $4.6 million between September 2007 and April 2008.

“These cash advances by Webster continued until Bradley became admittedly overadvanced under the borrowing formula and breached the contract with Webster,” according to Judge Dawson’s Nov. 29 order. “Clearly, the breach of contract was caused by Bradley, not Webster.”

After April 2008, Webster said it discovered that about 5 million board feet of pine lumber was unaccounted for. That inventory was part of the security Bradley Lumber used to obtain the loans from Webster.

In May 2008, Webster said Bradley Lumber was in default on its loans.

Shuffield, the CPA, said she determined that most of the pine wood had been sold.

“The over-inflation of Bradley Lumber’s lumber inventory and receivable to Webster was not simply the byproduct of irregular or sloppy record-keeping,” she wrote. “Bradley Lumber deliberately misled Webster into believing that there was sufficient inventory and receivables to collateralize the loan.

“It is my opinion that Webster was the victim of fraud,” she wrote.

Chambers said last week that “obviously, I’m not as good a businessman as some folks.”

But Chambers said he never diverted lumber or sold lumber and kept the money.

 

 

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