Fair Finance Co. trustee Brian Bash estimates that the estate of the bankrupt Akron business has recovered about $2 million out of more than $200 million owed to Ohio creditors.
There's not enough money yet to make an interim distribution to the more than 5,300 Ohio residents and organizations that had loaned money to the business over the years, Bash said Tuesday morning during a monthly hearing in U.S. Bankruptcy Court in Akron.
''We're starting to build up a fund,'' Bash said as part of a brief overview of the ongoing bankruptcy process and investigation in a teleconference in open court.
But he said the process is slow.
''Everything is contested in this case,'' Bash said. ''It's a very complex case. Millions of documents. . . . I think we've picked all of the low-hanging fruit.''
In addition to the approximately $2 million recovered so far, Bash said he has entered into what are called escrow agreements involving the sale of former National Lampoon Inc. executive Daniel Laikin's home in California.
Laikin, a friend of Fair Finance co-owner Timothy Durham and a former Fair Finance director, is in prison after being found guilty in 2010 of federal charges of manipulating the stock price of comedy movie maker National Lampoon. Bash says Laikin owes $23 million to Fair Finance.
Bash said there are proceeds of about $1.6 million from the Laikin home that might become available.
Bash said that he is mindful about pursuing an interim distribution of assets to creditors. Many of Fair Finance's creditors are elderly Ohio residents who purchased the company's uninsured investment certificates that paid a high rate of interest.
Tuesday's hearing lasted less than 20 minutes. Bankruptcy Chief Judge Marilyn Shea-Stonum was away on vacation and not in the courtroom — instead, she participated via telephone.
Bash said he filed a lawsuit Monday in California against National Lampoon Inc., whose chief executive is Durham, the now-indicted co-owner of Fair Finance. A copy of the lawsuit was not available Tuesday.
Bash said he is seeking to put the comedy movie maker in receivership and hopes to get as much as $9 million to $10 million from National Lampoon that he says is owed to Fair Finance.
The trustee said he expects to file additional lawsuits in upcoming weeks seeking to bring additional assets into the estate.
The nine-page June status report, which includes a history and overview of the case, is available on the trustee's Fair Finance web site, http://www.fairfinancetrustee.com.
The trustee and judge agreed to keep holding monthly status updates; upcoming dates have not yet been set.
The FBI raided Fair Finance's offices in November 2009, essentially shutting down the longtime Akron business. The company was forced into bankruptcy in February 2010.
Indiana businessmen Durham and James Cochran, co-owners of Fair Finance, and Rick Snow, the company's chief financial officer, were indicted and arrested on criminal charges earlier this year. Federal authorities allege the three defrauded thousands of Ohio residents and organizations out of more than $200 million.
Federal authorities allege the co-owners defrauded investors and ran Fair Finance essentially as a Ponzi scheme while using Fair Finance funds for their personal use, including buying mansions, expensive cars, artwork and more.
Durham and Cochran bought Fair Finance in 2002 and hired former Akron-area accountant Snow to be CFO of their related businesses.
Durham succeeded Laikin as chief executive of National Lampoon Inc.
The criminal trial is scheduled for 2012 in Indianapolis.
Jim Mackinnon can be reached at 330-996-3544 or firstname.lastname@example.org.