The Rise and Fall of Ed Harvey's Business Empire

by Mark Friedman  on Monday, Aug. 2, 2010 12:00 am  

Until 2008, Edward M. Harvey was known as an entrepreneur whose diverse and complex business portfolio had made him a millionaire many times over.

But the 78-year-old Little Rock man, who once owned Gibraltar National Insurance Co. - itself the center of controversy lately - and one of the largest trucking companies in Arkansas, Continental Express Inc. of Little Rock, wasn't able to ride out the Great Recession. Judgments started piling up against Harvey and his companies.

"Virtually everything that he was involved in collapsed," Marvin Jones, a financial adviser to Harvey, said in a deposition taken in April as part of a collection lawsuit against Harvey.

Arkansas Business has used interviews, public documents and court records to chronicle Harvey's business rise in the timber industry in the 1970s to the point last month when two banks filed separate federal lawsuits alleging that he transferred assets to his wife, Bonnie, to avoid paying $2.5 million worth of judgments.

Jones said Ed Harvey's net worth was about $100,000 in April while Bonnie Harvey's net worth had risen by between $20 million and $30 million.

"The transfers from Mr. Harvey to Mrs. Harvey were made with actual intent to hinder, delay or defraud Metropolitan [National Bank] in its efforts to collect the debts owed by Mr. Harvey," the Little Rock bank said in a lawsuit filed in U.S. District Court on July 6. Harvey "made the transfers with the intent to defeat Metropolitan in its efforts to collect the balance owed on those notes."

Metropolitan had received a $1.7 million judgment against Harvey on May 18 in Pulaski County Circuit Court for loans to Continental that Harvey had personally guaranteed. But Metropolitan's attempt to collect was met with Harvey's position that "he is judgment-proof because he does not have any assets," the bank complained in federal court.

Nine days after Metropolitan filed its federal lawsuit, First Security Bank of Searcy filed a nearly identical one against the Harveys to collect a $756,000 judgment against Harvey and his Eaves Manufacturing of Beebe.

First Security was awarded its judgment on Dec. 15 in White County Circuit Court. But it, too, turned to the U.S. District Court after being unable to collect.

David Donovan, a Little Rock attorney representing the Harveys, told Arkansas Business recently that the couple did nothing wrong in transferring the assets.

"They haven't done anything to try and hinder, delay or defraud anybody," he said. "They're trying to work through the legal issues right now, and I'm sure they will."

The assets were transferred to "get their estates planned ... and leave Mr. Harvey with sufficient assets for all of his obligations," Donovan said.

 

 

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