IRS Bills Former Continental Trucking Executives, Not Owners

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

The Internal Revenue Service has billed Ralph Bradbury, right, former president of Continental Express Inc., and the late Pete Campbell, former executive vice president, shown an a file photo from 2006.

In November 2008, Jones and Bonnie Harvey told Bradbury that they had found a buyer for Continental. The Celadon Group Inc. of Indianapolis would buy the trucking company’s assets for $24.1 million but wouldn’t assume any of the company’s debts.

The sale would close on Dec. 4, which would be Bradbury’s last day at the company.

But concerns over paying the $1.2 million in overdue payroll taxes for the third quarter were being raised by Dodd. “In my opinion any large sale of equipment without using part of the proceeds to pay the IRS liability will lead to the IRS pursuing the liability with all the force they have,” Dodd said in a Dec. 1, 2008, email. “At least a plan should be submitted in writing as to how the liability is to [be] paid with the remaining assets. … I would strongly suggest the [IRS] liability be paid with the first available funds.”

Bradbury forwarded the email to Jones and asked, “What are your thoughts about contacting them and explaining the plan so as not to appear covert with the sale?”

In a Dec. 2 email, Jones replied, “Once we have a signed agreement — I’ll contact them.”

Creditors

The IRS wasn’t the only creditor that didn’t get paid.

Last year Metropolitan National Bank of Little Rock received a $1.7 million judgment against the Harveys for defaulting on a loan tied to Continental. Metropolitan subsequently filed a federal lawsuit accusing the Harveys of transferring assets to avoid paying the judgment. The Harveys denied the allegation, and the case was settled in May.

Also in 2010, First Security Bank of Searcy filed a nearly identical lawsuit against the Harveys to collect a $756,000 judgment tied to Eaves Manufacturing. First Security also alleged that the Harveys had shifted assets to sidestep paying the judgment. That case settled last September.

 

No Money

Jones said last week that Continental didn’t have the money to pay the taxes.

 

 

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