The Rhino Times is retracting and correcting the portion of the article with the headline “Get Your May 8 Primary Endorsements Here” beginning on page 6 of the Thursday, May 3 edition and continuing on page 48 under the subhead “Republican Primary NC House – District 59.”
The new article corrects inadvertent errors in the May 3 article that were made due to voluminous documents covering the numerous lawsuits over a number of years regarding the Southeastern Eye Center and related business entities. We apologize for the errors and regret any difficulties they may have caused.
NC House – District 59
District 59 state Rep. Jon Hardister is running for his fourth term in the House and he deserves to go back to Raleigh to continue the work he’s been doing. Hardister is currently majority whip, which is the number three leadership position in the House. Guilford County has traditionally punched well below its weight in the state legislature. It’s high time that Guilford County, which is the third largest county in the state, had more clout in the House.
I haven’t agreed with all of Hardister’s votes, but if that is the requirement for sending someone back to Raleigh, no one would ever be reelected.
What is strange is that Hardister is being challenged in the Republican primary by Mark McDaniel, who served two terms in the state Senate from 1991 to 1995. McDaniel has been out of the political picture for a couple of decades but he certainly hasn’t been out of the news.
McDaniel was the business manager of the Southeastern Eye Center and, along with its principal Dr. C. Richard Epes, was involved in various other related companies and businesses. Southeastern Eye Center and related businesses started having serious financial difficulty in 2005 resulting in bankruptcy for some of the companies and a multitude of lawsuits with various creditors. The legal cases were very complex and some matters are still pending.
Ultimately, North Carolina Special Superior Court Judge Louis Bledsoe ordered that a receiver be appointed to administer the assets of 12 companies related to Southeastern Eye Center of which McDaniel, Dr. Epes and Dr. Epes’ wife held ownership interests. This means that a court appointed trustee would handle all of the financial dealings involved in selling assets and paying creditors.
The reason Judge Bledsoe ordered the assets of the companies put into receivership was based on certain transfers of funds and other conduct by McDaniel and Dr. Epes to benefit themselves and their spouses at the expense of creditors of the businesses. According to an opinion by Bledsoe, he found “substantial evidence that the Epeses’ and Mr. McDaniel’s conduct in connection with the operation of CCSEA [Central Carolina Surgical Eye Associates] and SCLC [Southeastern Cataract Laser Center] had been in furtherance of their efforts to defraud, avoid, and hinder creditors.” Bledsoe also notes that the 19 different lawsuits that had been filed in the case had been consolidated by the courts to be handled in his court.
A related lawsuit, one that McDaniel brought up in an interview, was one where McDaniel and Dr. Epes sued District 62 state Rep. John Blust and the law firm where Blust is employed, Ivey, McClellan, Gatton & Siegmund, who were appointed trustees for part of the case. The lawsuit was thrown out of court because someone in bankruptcy can’t sue the trustee without permission from the bankruptcy court. McDaniel, Dr. Epes and their attorney not only lost the case but they were ordered to pay over $320,000 in attorney’s fees and expenses for the trustee. That’s a pretty major loss.
The numerous lawsuits and legal issues also hit the news because the Andrew Wyeth paintings of Bessie Epes were sold to pay the debts of the company. Bessie Epes had millions of dollars worth of Wyeth paintings, which were her personal property, that the receiver took and sold.
This was by no stretch of the imagination a normal bankruptcy.
It would be a huge mistake to send someone who was involved in this kind of financial impropriety to Raleigh.
Plus, the issue that McDaniel has chosen as the key to his campaign is the Republican tax reform. It is the same issue that Republicans all over the state are using as a reason why they should be reelected – because of the economic gains the state has made since the tax reform was implemented. Even Forbes magazine thought it was strange and wrote an article about how the tax reforms by the Republicans in North Carolina were being used as a model for other states on how to accomplish successful tax reform and that the tax burden on North Carolinians had been reduced by $4 billion by the Republican plan.
McDaniel has found one part of that tax reform bill, which cut personal and corporate income tax and raised the standard deduction, that he doesn’t like, and that is the expansion of the sales tax to cover some services.
It is a stated goal of the Republicans to depend more on sales taxes and less on income taxes. McDaniel also says that he has been told by another candidate for the legislature that the plan is to expand sales tax to medical services. However, state legislators from Guilford County agree that isn’t being discussed.