Former Fair Finance Co. owner Don Fair gets to wait a while longer before he writes a big check.
The judge overseeing the bankruptcy proceedings for Fair Finance Co., the Akron company that bears Fair’s family name, said on Tuesday she needs to read transcripts of court testimony Fair gave last summer before ruling on a multimillion dollar agreement between Fair and trustee Brian Bash.
Bankruptcy Judge Marilyn Shea-Stonum indicated she wanted to better understand when Fair suspected something was amiss at Fair Finance under its new owners. Fair sold Fair Finance in 2002 to two Indiana businessmen who, along with a company employee, were convicted last year on various criminal charges of defrauding thousands of Ohio residents out of more than $200 million. Fair was the first government witness called to testify in the trial held in U.S. District Court in Indianapolis.
There has been no indication that Fair suspected anything was amiss at the time of the sale, which paid him about $17 million up front, both the trustee and Fair’s lawyer said. Fair was paid more than $5 million in installments afterward under the sales agreement. Fair stayed with the company after it was sold but said he left within months.
Bash sued Fair for $150 million, saying in part the former owner either knew, or should have known, there were problems at the long-established Akron consumer finance company. Fair’s father started the company in 1934.
Fair and Bash agreed, pending court approval, to settle the lawsuit for $3.55 million, with the money to go into the Fair Finance estate. The $3.55 million is a significant portion of the approximately $5.9 million Fair was paid in the four years prior to the bankruptcy filing, lawyers said.
Fair’s attorney, Patrick Keating, said his client wanted to get the lawsuit over with. Fair cooperated with Bash and provided thousands of documents, he said.
“Obviously, Mr. Fair would prefer not to pay anything,” Keating said. “He wants to get on with what’s left of his life.” Fair is in his 80s.
Shea-Stonum said she was not holding a mini trial involving Fair.
“My role is to determine if the trustee exercised appropriate business judgement” with the proposed settlement, she said. Reading the criminal trial transcript will help her with that, she said.
The “nagging question” in the whole case is why various parties who suspected there were problems at Fair Finance under its new owners did not go to Ohio regulators “and say there’s a problem,” the judge said.
Keating said his client would have faced substantial risk if he told anyone he suspected fraud at Fair Finance.
Bash said Fair was a credible witness in last summer’s criminal trial in Indianapolis.
Also Tuesday, Shea-Stonum noted that a lawyer listening in on the open court proceedings via teleconference was representing convicted Fair Finance co-owners Timothy Durham and James Cochran. Shea-Stonum noted that Durham has since declared he is destitute and had requested a public defender.
Shea-Stonum wondered out loud if the U.S. District Court judge in Indianapolis was aware that Durham had a “paid representative” listening to the bankruptcy proceeding.
Durham was given a 50-year prison sentence while Cochran was sentenced to 25 years. Former Fair Finance executive Rick Snow was given a 10-year prison term.
The next hearing is 10:30 a.m. March 19 in U.S. Bankruptcy Court in downtown Akron.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.