Fair Finance trustee Brian Bash indicates it is unlikely he will be able to collect about $43 million in judgments against lower-profile Tim Durham-related businesses and associates.
That news follows a federal court ruling earlier this month that dismissed a Bash lawsuit seeking as much as $950 million from Textron Financial, a Rhode Island business that loaned millions of dollars to Fair Finance when it was bought by Indiana businessman Durham and partner James Cochran in 2002. A related $72 million claim against Fortress Credit Corp. has been allowed to proceed, although the court said the trustee cannot pursue treble damages against Fortress.
Howard Klein, a forensic accountant hired by Bash, says many of the lower profile default judgments that the trustee has won as part of the $215 million Fair Finance bankruptcy fraud case are “not collectible,” according to a filing Monday in U.S. Bankruptcy Court in downtown Akron.
The figures were part of the regular status report that is scheduled to be discussed in open court 9:30 a.m. today.
Since the last status report in October, Bash said he has recovered $637,157.49 in settlements. The Fair Finance estate money market fund holds nearly $5.7 million, according to the latest figures in the report.
But lawyers and professionals in the Fair Finance case have filed paperwork seeking nearly $9 million in fees and expenses. The fee applications likely will be discussed in court today.
About 5,300 Ohio residents and organizations were defrauded out of more than $215 million after purchasing uninsured investment certificates from Fair Finance starting in 2002. That’s when Durham bought the long-time family-owned Akron business from Don Fair, whose father founded the company in the 1930s. Federal investigators and Bash said Durham turned what had been a successful business into a Ponzi scheme.
The trustee has not made a distribution to the fraud victims since Fair Finance was forced into bankruptcy in 2010.
Durham, Cochran and Rick Snow, Fair’s former chief financial officer, are scheduled to be sentenced Nov. 30 in U.S. District Court in Indianapolis. The three were convicted last summer on various financial fraud charges. Next week marks the third anniversary of when the FBI raided Fair Finance’s offices; the consumer loan and accounts receivables company never reopened.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.