Kent Vestal, a former business partner of Democratic lieutenant governor candidate John Burkhalter, said Thursday that lawsuits filed by a company owned by Burkhalter accusing two former employees and another person of taking money from the company are “baseless lawsuits” filed in retaliation after the two former employees testified against Burkhalter last year in a separate lawsuit.
A spokesman for Burkhalter said the lawsuits filed nearly two weeks ago have merit.
Vestal, a Republican, accused Burkhalter of employing “bullying tactics against innocent employees.”
“It is a sad day when a candidate for public office deliberately decides to ruin the lives of ordinary people — who have for years worked hard for him — to silence them so the truth will not be heard, in order to further his political campaign,” Vestal said.
Burkhalter spokesman Mariah Hatta disputed Vestal’s claims.
“Clear evidence exists” to back up the allegations in the lawsuit, she said in a statement.
As a businessman, Burkhalter has treated employees properly, she suggested.
“John Burkhalter has created hundreds of jobs … [and] he stands behind his family, workers, companies and state,” Hatta said.
Burkhalter, a Little Rock businessman, faces Republican nominee U.S. Rep. Tim Griffin of Little Rock and Libertarian Christopher Olson of Viola in the Nov. 4 general election. Vestal said he’s voting for Griffin.
Burkhalter ended his partnership with Vestal in Burkhalter-Vestal LLC in September when Vestal transferred his ownership interest in the company for undisclosed compensation, said Hatta.
Both men owned 50 percent of the company founded in 2005 to construct Lexington Park Apartments in North Little Rock. It started construction on the 288-unit complex in 2006, with most of the work completed by late 2008, according to court filings. Construction cost more than $18 million.
In October 2011, Burkhalter filed a lawsuit against Vestal, stating the company had become “deadlocked” because of disagreements between the business partners.
Vestal responded to the lawsuit with his own claims and filed an amended counterclaim in May 2012.
After a trial in January 2013, the jury found in favor of Burkhalter on all but one of his counts and ordered Vestal to pay $242,928.
The jury also found that Vestal was due $100,000 in restitution from the company for work he performed and $2,000 for invasion of privacy in connection with the claim that Burkhalter broke into his office. Burkhalter-Vestal LLC was also awarded $76,000 against Burkhalter for repairs the company had to make to the complex after Burkhalter’s company finished construction.
The circuit judge, Collins Kilgore, also ordered that Vestal be removed as manager and that an independent property management company and certified public accountant take over the day-to-day operations.
On Oct. 13, Burkhalter-Vestal LLC filed a lawsuit in Pulaski County Circuit Court against Jennifer Woods, who was former property manager for the Lexington Park Apartments from April 2009-March 17, 2014. The company has developed and operated the apartments.
The lawsuit alleges that soon after Woods’ termination, it was discovered from a current employee of a third-party management company that Woods “orchestrated an overbilling kick-back scheme” using her management position at the apartments, the lawsuit alleges.
Woods on Friday denied the allegations in the lawsuit, saying “they are completely ridiculous.”
On Oct. 13, Burkhalter LLC filed a separate lawsuit in Pulaski County against Tiffany Hyder, who is a former assistant manager for the Lexington Park Apartments; Hyder’s husband, Seth Hyder, who performed collection services on behalf of Burkhalter-Vestal LLC while working for the Vestal Law Firm and then for Hyder & Lynch; Seth D. Hyder, P.A.; and Hyder & Lynch PLLC.
At the time of Tiffany Hyder’s termination, the accounting records for Burkhalter-Vestal showed that more than $400,000 of past due rents owed to Burkhalter-Vestal were unaccounted for, the lawsuit states. Burkhalter’s lawsuit alleges that Seth Hyder improperly made deposits payable to Burkhalter-Vestal directly into his firm’s checking account.
Among other things, both lawsuits seek judgments against the defendants for converting corporate assets of the company and punitive damages.
Tiffany Hyder declined to discuss the suit; Seth Hyder could not be reached for comment by telephone.
Burkhalter-Vestal LLC filed these lawsuits after Tiffany Hyder and Woods testified last year in a separate lawsuit that Burkhalter was a bully when he demanded Woods’ password to the company’s operating system with the company’s financial data at the apartments.
Woods testified that guns in Vestal’s office “were being messed with” by a man who accompanied Burkhalter and two others; the guns were pointed at her and another woman, she said. Woods said she was pregnant at the time.
But Hatta said that “the simple fact is that these bizarre allegations are untrue and were fabricated by disgruntled by former employees.
“The judge rejected the allegations,” she said.