There might be only $10 million to $15 million in hard assets that can be tapped to repay thousands of Fair Finance Co. investors who are owed more than $200 million, the court-appointed bankruptcy trustee says.
Those assets include valuable cars and artwork in the possession of Fair Finance co-owner Timothy Durham that will be put up for auction, the trustee, Cleveland lawyer Brian Bash, said Tuesday in U.S. Bankruptcy Court in Akron. Bash spoke during a regular monthly status update on the case involving the Akron-based company.
The cars and artwork were described by attorneys as ''low-hanging fruit'' that can be quickly liquidated. The search for other assets continues, they said.
Creditors will receive a percentage of whatever assets the trustee finds that can be distributed, said Kelly Burgan, counsel to Bash.
''Everybody gets the same percentage and proportional share,'' she said.
On a related matter, the judge overseeing the Fair Finance Chapter 7 bankruptcy urged creditors to file claims as soon as possible.
The more than 5,300 creditors, including thousands from the Greater Akron area who bought investment certificates from Fair Finance, should receive a mailing this week from the trustee.
''That's not junk mail,'' said Marilyn Shea-Stonum, chief judge for U.S. Bankruptcy Court Northern District of Ohio Eastern Division.
People who do not file the claim risk not getting a share of whatever the distribution will be, she said. Deadline is 5 p.m. Oct. 8, but Shea-Stonum urged people to file as soon as possible.
The mailings went out Friday and bear the name of the claims agent, Kurtzman Carson Consultants LLC and using a California return address.
Forms can also be downloaded from the trustee's Fair Finance Web site, http://www.kccllc.net/fairfinance.
Bash said he and his team continue to work to find assets owed to Fair Finance that can be returned to creditors. He said he is pretty sure where Fair Finance's money has gone.
''It is simply not a pretty picture at this point in time,'' Bash said.
Creditors will have the chance at an Aug. 2 meeting in Akron to get an in-depth look at a chart prepared by forensic accountants showing where Fair Finance money went and how much it is owed by others, he said.
The so-called ''341'' meeting is set for 1 p.m. Aug. 2 at the Akron City Centre Hotel; it is a continuation of a meeting first held in mid-May that attracted an overflow crowd of 850 people. Bash said he booked more space for the August meeting at the hotel after unsuccessful attempts to find a much larger hall.
Meeting attendees will have to pay for parking, he said.
Court records allege money from Fair Finance flowed to its Ohio corporate parent, Fair Holdings, then to Fair Holdings' Indiana corporate parent, DC Investments, and from there to other businesses owned and operated by or otherwise affiliated with Durham and his business partner, James Cochran.
The two Indiana businessmen purchased Fair Finance, founded in 1934 by the Fair family, in early 2002.
The FBI raided the company's Akron headquarters and a related business in Indianapolis shortly before last Thanksgiving. Court records show investigators suspected Fair Finance was being operated as a Ponzi scheme.
Investors who purchased the more than $200 million in uninsured investment certificates from Fair Finance forced the company into bankruptcy earlier this year as a means to recover their money.
The wide variety of cars will be auctioned off at different locations to maximize value, Burgan said. It makes sense to place Durham's antique cars at an auction that attracts people who want only antiques, with the sports cars and other vehicles at auctions that appeal to those types of buyers, she said.
The Fair Finance estate will receive 27 to 30 Durham cars to auction off even though at one point Durham might have had as many as 70 vehicles, Bash said. The FBI in recent weeks raided Durham properties and seized vehicles, he said.
Durham might have sold as many as 10 vehicles that raised about $900,000 used to pay legal fees, Bash said.
Bash said he is still working on getting an accounting of all of Durham's vehicles.
The artwork might be auctioned ''live'' and online, depending on what their newly hired auctioneer recommends, Burgan said. The art auction will be heavily marketed, she said.
The artwork has a replacement insurance value of about $2 million, which might not represent a current fair market valuation, she said.
Shea-Stonum said the cars and artwork amount to ''sideshows'' and that what really matters is finding out where all the Fair Finance money went. Forensic accounting is crucial to the process, she said.
Bash has to gather as much information as possible and figure out if money is really gone or if it is ''tucked away someplace'' she said.
Everyone wishes the bankruptcy process could get done instantaneously, Shea-Stonum said, but ''it's laborious.''
Jim Mackinnon can be reached at 330-996-3544 or firstname.lastname@example.org.