The years-long Fair Finance Co. bankruptcy case has resulted in default judgments totaling nearly $200 million.
But so far none of that money has been recovered and returned to the thousands of Ohio residents bilked out of more than $200 million in investments in the now-defunct Akron financing business and related financial scandal.
As of mid-June, a money market account set up to hold recovered funds in the bankruptcy had slightly over $6 million in it, according to a regular monthly report filed Monday by the bankruptcy trustee.
The June report is scheduled to be reviewed at 9:30 a.m. today in U.S. Bankruptcy Court in downtown Akron.
Trustee Brian Bash reports that since the last status hearing in May, the Fair Finance estate has brought in an additional $67,907.40. Total amount in the estate: $6,025,163.41 as of Friday.
Default judgments total $193,671,716.28, according to the trustee’s 49-page monthly report.
The judgments include more than $144 million granted May 28 against Fair Finance’s Indianapolis-based owners, Tim Durham and James Cochran. The two men, along with the company’s top financial officer, are in federal prison after being convicted last year on numerous counts of defrauding Fair Finance investors. Durham’s default judgment totals nearly $134.9 million and Cochran’s judgment is for nearly $9.8 million.
Fair Finance was forced into bankruptcy in February 2010 after FBI raids the previous November shuttered its offices; the longtime accounts receivables and consumer finance company, established in 1934, never reopened. Prosecutors said that Durham and Cochran, who bought the business in 2002, diverted millions of dollars from Fair Finance for their own personal use and to prop up other ailing companies they owned and controlled. About 5,300 Ohio residents had purchased uninsured investment certificates totaling more than $200 million from Fair Finance; the short-term loans were to be used to provide capital to the business.
The trustee’s June report said he has done an asset search of Durham and found property and is using information from the examination “to evaluate other recovery options.” Bash said he is negotiating with “certain individuals” interested in buying some assets that belong either to Durham or to the Fair Finance estate, according to the report.
Bash’s report said he is evaluating recovery options and deciding how to proceed with collection actions against Durham and Cochran.
Bash said he is focusing his collection efforts on the eight largest default judgments totaling more than $184.1 million.
Other trustee lawsuits include seeking $25 million from Dan Laikin, a friend of Durham’s, a former Fair Finance director and former head of National Lampoon. Laikin is in prison on unrelated charges involving manipulating National Lampoon stock prices. Bash is also suing National Lampoon for about $9 million.
Jim Mackinnon can be reached at 330-996-3544 or firstname.lastname@example.org.