Bean Lumber Bankruptcy Blamed On Scam

by Mark Friedman  on Monday, Jan. 27, 2014 12:00 am  

Even at first, it sounded more like a pigeon-drop scam than a business deal.

Almost four years ago, Willy Andreas “Andy” Kirsch, the director of Malteco Business Consulting Group Inc. of Irving, Texas, offered to invest $10 million in Bean Lumber Co. of Glenwood in exchange for 25 percent ownership of the company. All Bean Lumber had to do was pay $125,000 to Malteco before it received the $10 million.

Desperate for cash, Bean Lumber took the deal in May 2010.

Bean Lumber, though, never saw any of the $10 million despite receiving repeated promises that the money was on its way, according to a lawsuit Bean Lumber filed last month in U.S. District Court in Little Rock.

Without Malteco’s funds, Bean Lumber shut its doors at the end of 2010 and filed for Chapter 11 bankruptcy in 2011, listing $15.8 million in debts and $36.8 million in assets.

Grady Bean, Bean Lumber’s CEO and one of its owners, declined to comment on the case. His attorney, Charles Boyd of Little Rock, didn’t return calls for comment.

As of last Wednesday, the defendants hadn’t filed a response to the lawsuit.

Kirsch couldn’t be reached for comment, and an attorney who represented him in connection with the transaction, Billy Parlin of Ocean Springs, Miss., didn’t return a call for comment. No representative of Malteco could be reached for comment.

Emails filed as exhibits in the case, however, give a peek inside the frantic company in the months leading up to the collapse of Bean Lumber.

Financial Troubles

Founded in 1983, Bean Lumber operated a sawmill that produced and sold lumber. Curt Bean of Amity owned 75 percent of Bean Lumber as well as the related entity, Curt Bean Lumber, which was once one of the largest independently owned Southern pine manufacturers in the country. In addition, Bean owned a 75 percent interest in C. Bean Transport Inc. of Fort Smith, a trucking company.

The Great Recession hit all three companies hard. Between June 2006 and March 2008, sawmills in Arkansas — those processing both hardwood and Southern yellow pine — shed about 3,000 jobs. In August 2007, Curt Bean Lumber closed its Glenwood plant but then reopened it in May 2008.

 

 

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