The Rise and Fall of Ed Harvey's Business Empire

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

At the same time, Gibraltar National Insurance "was on the verge of receivership," Amanda Rose, associate counsel for the Arkansas Insurance Department, told Arkansas Business earlier this summer.

In 2008, Gibraltar reported a loss of $2.7 million on $3 million in premium. The previous year, it had net income of $424,000 on $2.2 million in premium.

The Insurance Department discovered Harvey "had some questionable business transactions," Rose said in June. "He had reported several items, like his skybox in Fayetteville at the football stadium, as assets of the company, and, of course, those are not admitted. Once all that was discovered, the company was technically insolvent."

The company was sold in January 2009 to insurance agent Steve Standridge of Mount Ida, who last month surrendered his insurance license after the Insurance Department accused him of 72 counts of wrongdoing. Harvey ended up with $2 million for Gibraltar, which was officially declared insolvent when the AID took it into receivership in March.

Attorney Allan "Dick" Horne of Little Rock, who represented Harvey in the transaction, previously told Arkansas Business that Gibraltar was solvent at the time of the sale. "Ed Harvey, in case you don't know, has got all kinds of money," Horne said in late June.

Harvey's attorney Donovan said Harvey's Travis Lumber of Mansfield also was suffering financially in 2008 because of the downturn in the economy.

At the end of 2008, Harvey sold Continental Express to the Celadon Group Inc. of Indianapolis for $24.1 million. But Celadon only bought Continentals assets, not liabilities like the loan from Metropolitan National Bank. Continental generated $92 million in revenue in 2007, according to information from Celadon.

Travis Lumber was sold in 2009 for an undisclosed price.

"He was trying to sell off those businesses to meet financial obligations," Donovan said. "He was working hard to take care of the financial obligations he had."

Donovan said Harvey's companies were victims of the economy.

 

Asset Shift

 

 

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