Lawsuits in the years-long Fair Finance Co. bankruptcy case and $200 million financial scandal will continue well into 2014.
Brian Bash, a Cleveland-based lawyer and trustee for bankrupt Fair Finance, says he continues to aggressively chase down assets that belong in the estate of the Akron financial business.
“We are continuing to move forward on all cases and collect any assets that there may be,” Bash said during a monthly court hearing Tuesday morning in U.S. Bankruptcy Court in downtown Akron.
As of June 14, there was a little more than $6 million set aside in a money market fund set up to hold money received in settlements from numerous parties in the complicated Fair Finance proceedings.
A trial involving a $9 million lawsuit against comedy movie maker National Lampoon Inc. has been pushed back six months to early June 2014 because an attorney for National Lampoon developed medical issues. Convicted scam artist Tim Durham, the Indianapolis-based co-owner of Fair Finance Co., at one point ran National Lampoon, perhaps best known for Animal House and the Vacation comedy movies series.
Bash alleges in a lawsuit filed in California that Durham illegally funneled money from Fair Finance to National Lampoon. He also alleges that $1 million in National Lampoon funds paid for Durham’s criminal defense; National Lampoon is suing Durham’s defense attorney seeking to recover any unauthorized funds.
Tuesday’s regularly scheduled status hearing — a teleconference conducted in open court — lasted about 12 minutes. Besides U.S. Bankruptcy Judge Marilyn Shea-Stonum and staff, there was only one other person in the courtroom for the proceeding.
About 5,300 Ohio residents were bilked out of more than $200 million they had invested in Fair Finance. FBI raids in late November 2009 closed down Fair Finance for good; the business, founded in 1934, was forced into bankruptcy in February 2010. Durham and business partner James Cochran bought Fair Finance in early 2002. The two men, along with the company’s former chief financial officer, were convicted last year on numerous federal charges of defrauding Fair Finance investors. Durham is serving a 50-year prison term; Cochran received a 25-year sentence; and former CFO Rick Snow was sentenced to 10 years.
Shea-Stonum said that the latest monthly status report from Bash showed little change from the May report.
Bash has won default judgments of more than $193 million in the case but has yet to recover substantial assets for eventual distribution to the thousands of creditors.
The next regular Fair Finance status hearing is scheduled for 10:15 a.m. on July 23 in U.S. Bankruptcy Court, 2 South Main St., in downtown Akron.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com