Bean Lumber Bankruptcy Blamed On Scam

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

“We have spent the past few months restructuring our company from a debt standpoint as well as an operational one,” Tim Bean, president of Curt Bean Lumber, told the Arkansas Democrat-Gazette in 2008. “We feel that despite the tough market conditions, we have a plan that can not only sustain us for the present but help us grow and become more diverse for the future.”

But starting in 2008, the Bean companies were hit with a flurry of collection and foreclosure lawsuits seeking millions for defaulted loans.

The Meeting

In March 2010, C. Bean Transport filed for Chapter 11 bankruptcy protection, listing $23.26 million in assets and $19.6 million in debts. And Bean Lumber was in danger of bankruptcy as well.

A Bean Lumber customer thought he could help. Ben Gallinger, president of Gallin Group International in Portland, Ore., is a lumber broker and knew Bean Lumber was having financial problems in 2010 and needed cash fast, according to Bean Lumber’s lawsuit.

Gallinger put Grady Bean in touch with a “hard money guy” he knew in Dallas, named John Kimmey, who brokered deals for large amounts of money, the lawsuit said. (Neither Gallinger nor Kimmey could be reached for comment.)

Bean met Kimmey in May 2010 and he “seemed like a legitimate broker,” according to the lawsuit.

Kimmey told Bean about Kirsch, who was the president and owner of Malteck International of Geneva, which had an office in the Dallas suburb of Irving operating under the name Malteco Business Consulting Group.

Kirsch “typically only entered into contracts for large investments” — $300 million to $500 million — but, according to the lawsuit, he told Grady Bean that he was willing to enter into a few smaller investments as a favor to Kimmey.

Bean then received the news he was looking for: Malteco agreed to invest $10 million in Bean Lumber to refinance assets and retire specified liens.

The deal, however, came with a catch. “Before Malteco began paying Bean Lumber any of the promised $10 million Bean Lumber had to pay a ‘depository fee’ of $125,000,” according to the lawsuit.

Bean was told that the $125,000 would be used for insurance.

 

 

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