The judge overseeing the Fair Finance Co. bankruptcy said Tuesday she would wait until next year to make a ruling on a proposed $3.55 million settlement with the collapsed company’s former owner, Donald Fair.
U.S. Bankruptcy Judge Marilyn Shea-Stonum noted the proposed settlement fell far short of the $150 million asked for in the lawsuit brought against Donald Fair by the trustee for the Akron company.
More than 5,000 Ohio residents lost millions in the fraud scheme after the company closed in November 2009, and the judge said they should have more time to raise objections to the proposed settlement.
Also Tuesday, Timothy Durham, the convicted executive who bought the now-bankrupt company from Donald Fair, said he can’t afford to hire an attorney for his appeal.
Last month, Durham was sentenced in U.S. District Court in Indianapolis to 50 years in prison, after being convicted of swindling about $200 million from people who bought uninsured certificates of deposit.
Meanwhile, the proposed settlement with Donald Fair was discussed in Tuesday’s monthly Fair Finance status meeting. Under the proposal, filed with the court in Akron on Dec. 6, Donald Fair was to pay the $3.55 million by the end of this year. The timing of the payment was negotiated and has tax consequences for Fair, court records say.
But Shea-Stonum declined to rule on the settlement, saying that “to give only 12 days … for any of the 5,300 people who appear to be victims” to object to the proposed settlement “is a pretty significant curtailment” of their rights.
Shea-Stonum said at the hearing that she planned to rule on the matter Jan. 22, the date of the next monthly Fair hearing. Donald Fair’s attorney Patrick Keating, under questioning by the judge, said the settlement was not contingent on being paid by the Dec. 31 date.
Separately, Indiana businessman Durham, co-owner of Fair since buying it in 2002, said in court documents in federal court that his multimillion-dollar Indianapolis home is in foreclosure and all of his financial assets are tied up in the bankruptcy of companies he formerly controlled.
Fair Finance Trustee Brian Bash alleged in his $150 million civil lawsuit against Fair that his “actions and omissions were an unfortunate and substantial contributing factor to [Fair Finance co-owner Timothy] Durham’s multiyear fraudulent scheme and the millions of dollars of harm caused to the debtor [Fair Finance] and its creditors.”
Bash, in a statement on the trustee’s Fair Finance website, says he was optimistic of eventually making some payments to creditors. The more than $5 million recovered to date has gone to pay legal and related professional bills.
The Associated Press contributed to this report. Beacon Journal business writer Katie Byard can be reached at 330-996-3781 or kbyard@thebeaconjournal.com.