Shareholder Sues Trucking Company For Embezzlement
January 2, 2000
Ray Hall, a 10% shareholder of Dallas-based J&H Truck Service, Inc., has filed suit against its management and related entities, including its chairman, Tedford Harrod Sr., alleging, among other things, that the defendants misused corporate funds and embezzled monies from the business to fund their personal lifestyle and to buy influence.
The suit alleges that a substantial portion of the funds were used to make improper payments to student athletes, trainers and staff in the University of Arkansas' football program. The complaint, filed in district court in Dallas County, attached a number of exhibits that included copies of canceled checks, affidavits of former J&H employees and other relevant documentation.
"Our client seeks a full accounting of corporate funds as a shareholder of the company," said Bill Brewer, an attorney with Bickel & Brewer, a national law firm based in Dallas, New York and Chicago, who is representing Hall. "We are also asking the court for injunctive relief to prevent further misappropriation of the company's funds and assets."
According to the suit, Hall purchased 10% of J&H for $30,000 in anticipation of dividend distributions during his retirement. Court papers state the company generated approximately $17 million in annual revenue and net profits of more than $800,000 a year, yet there were no dividends paid.
J&H Chairman Tedford Harrod Sr. denied any misuse of corporate funds, and said his son's divorce is a big factor in the lawsuit. "It does seem like it is a sour-grape direction," Harrod told the Associated Press. Karey Harrod, a former J&H employee and Harrod's daughter-in-loaw, is suing her husband, Ted Harrod Jr.., for divorce. In an affidavit accompanying the lawsuit, she stated that for the past eight years, as vice president of J&H, she witnessed her father-in-law creating elaborate schemes to embezzle money. She said she saw Arkansas athletes go to Harrod's home, where he handed out checks.