The trustee overseeing the Fair Finance Co. bankruptcy is suing company co-owner Timothy Durham's brother-in-law for $1.2 million, saying the Indiana man is one of a number of company insiders who borrowed heavily from the Akron business but never repaid the debt.
Trustee Brian Bash, who will provide his monthly status update at 9:30 this morning in U.S. Bankruptcy Court in Akron, is suing Jeffrey W. Osler and his wife, Dana D. Osler, both of 9032 Diamond Point Drive, Indianapolis. Bash's suit says ''Jeffrey Osler was one of the insiders who received money'' from Fair Finance and related businesses, including Fair's Ohio corporate parent, Fair Holdings.
Jeffrey Osler in 2006 became the owner of gymnastics and cheerleading school Geist Sports Academy in Indianapolis, which is listed as borrowing as much as $1.8 million from Fair Finance. Dana Osler is on the academy's website as its director of operations. An Indiana story in early 2006 said the couple intended to upgrade and expand the 23,000-square-foot facility.
Indianapolis media also reported in 2010 that Geist Sports Academy had run into financial problems and at one point owed tens of thousands of dollars in property taxes.
Jeffrey Osler is also executive vice president, treasurer and a board member of Durham-owned Obsidian Enterprises in Indianapolis; his Obsidian biography
says he also worked for other Durham-related businesses.
Bash's suit says that when Durham and business partner James Cochran bought Fair Finance in 2002, it was ''a strong, viable, reputable company.'' But by 2009, Fair Finance ''was utterly looted through insider loans,'' the lawsuit alleges.
The suit identifies Osler as Durham's brother-in-law and a director and officer of Durham's companies who ''prepared and kept the books and financial records'' of Fair Finance's Ohio corporate parent Fair Holdings and other Durham-related businesses.
Fair Finance creditors forced the longtime Akron company into bankruptcy last February after FBI raids at Fair on Nov. 24, 2009, effectively shut down the small consumer loan and accounts receivables firm. The FBI also raided Obsidian Enterprises the same day in Indianapolis.
Some 5,300 Ohio residents and organizations could see losses of more than $200 million in investment certificates they purchased from the company in what federal investigators said could be a Ponzi scheme involving Durham, Cochran and their related businesses.
Loan details
Jeffrey Osler originally borrowed $200,000 in 2002 through a promissory note with Fair Finance's Indiana corporate parent, DC Investments, according to the suit filed Friday afternoon in bankruptcy court. The note was amended over the years to the point where Osler and his wife owe $911,067.90 in principal, $297,120.92 in interest and $5,519.59 in late payment fees, for a total of $1,213,708.41 as of Dec. 31.
The suit said that in 2005, Dana Osler ''unconditionally, directly and absolutely guaranteed'' the payment of her husband's obligations.
Bash's suit says the trustee is now entitled to damages ''in an amount to be proven at trial,'' plus fees and costs. Bash said he demanded payment from the Oslers on Oct. 5 but they refused.
Art auction
In other action, Bash has a tentative agreement with a Philadelphia art dealer who purchased more than $47,000 worth of artwork at an auction last fall but missed a payment deadline.
Bash will be seeking court approval for an agreement with Philadelphia art dealer Nathan Isen at Brewster I & Co. in which Isen agrees to pay the trustee $47,940 for artwork won at the Oct. 16 auction in Cleveland of Durham's art collection. Durham turned over his collection of largely contemporary art pieces to the trustee for auction, with proceeds to go into the Fair Finance estate.
The auction called for all winners to pay within five days of the auction; Isen balked, saying that as a dealer, he was entitled to 30 days to make full payment. Upon payment, Isen and Brewster will receive the art now being held in Cleveland.
Bash is still suing an Orlando, Fla., art dealer who made successful high bids totaling more than $260,000 over the telephone at the Cleveland auction. Richard Hart, owner of Baterbys Art Auction Gallery, says the sale was canceled and he is not obligated to pay. Bash says in his status report that he is exploring settlements with Hart.
Isen and Hart were the two highest bidders at the auction, with a combined total of more than $300,000; the auction raised more than $400,000.
Later this week, a number of specialty, sports and antique vehicles owned by Durham, an avid car collector, are to be sold off in Phoenix as part of a prominent annual two-day auction. It is scheduled for Thursday and Friday and will be conducted by RM Auctions. The auction says it typically attracts buyers from around the world.
Among the Durham vehicles to be auctioned on Friday is a 1929 Duesenberg Model J with an estimated value of $1 million to $1.3 million. The vehicle title has been in dispute.
Also in the auction are a Rolls-Royce, Ferrari, Lamborghini, Aston Martin, Lotus, 1929 Auburn Speedster and a Hummer H2.
Information about the auction, including pictures of the vehicles, can be found at http://www.rmauctions.com.
Bash also said he continues to negotiate with ''political donees regarding return of contributions.'' The report does not name the politicians.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
