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.

After the sale to Celadon, Continental rounded up about $700,000 in receivables, Jones said in a January deposition for Metropolitan’s collection suit against the Harveys. Last week he told Arkansas Business that almost half of that money was used to replace money withheld from employee paychecks that had not been remitted to the proper accounts: $260,000 in 401(k) contributions and $70,000 in dental insurance premiums.

The rest went to the IRS, but “there were outstanding creditors that could not be paid,” Jones told Arkansas Business.

He said last week that some unsecured creditors got nothing even after the sale, and he said the Harveys lost money on the transaction. Bonnie Harvey, he said, paid $200,000 to make the company’s payroll.

“There was absolutely no fiduciary irresponsibility on anybody,” Jones said. “I have nothing negative to say. I think the management did the best they could with what they had to work with.”

 

Death and Taxes

After the sale of Continental Express, the tax bill still nagged at Bradbury. On June 25, 2009, six months after the sale, Bradbury sent an email asking for an update from Little Rock attorney Price Gardner, who represented the Harveys.

“Taxes should be knocked out next,” Gardner replied four days later. “We will be working with the IRS to get the balances this week.”

Gardner declined to comment last week, but the taxes clearly were not “knocked out.” Sixteen months later, at the end of October 2010, Bradbury received a certified letter from the IRS stating that he owed $1.88 million in outstanding taxes and a penalty of $1 million.

The taxes were due for the last two quarters of 2008 and the first quarter of 2009.

Jane Campbell, widow of Continental’s former EVP, received an identical bill on Nov. 1, the day she buried Pete, according to Bradbury’s Dec. 8 letter to the IRS.

Bonnie Harvey attended Campbell’s funeral, and Bradbury asked her about the tax bill. She said she “had no idea what I was talking about,” Bradbury told the IRS. And she reported that she had not received anything from the IRS.

 

 

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