The Fair Finance Co. bankruptcy has cost nearly $439,000 since February.
More than 61 percent of the disbursements — $267,492 — have gone to Kurtzman Carson Consultants LLC, a California-based specialty firm that provides administrative and other services in such cases as corporate bankruptcies.
So far, no money has gone to the bankruptcy trustee, Brian Bash, or his staff at the Cleveland law firm Baker Hostetler, according to monthly disbursement forms filed online at the Fair Finance trustee site, http://www.fairfinancetrustee.com.
The latest monthly financial and status update reports were filed Monday afternoon with U.S. Bankruptcy Court in downtown Akron. Disbursements through Dec. 13 totaled $438,890.76.
Bash is scheduled to give a monthly status report 9:30 a.m. today in the bankruptcy court. The report is typically given as part of a telephone conference call in open court with few people attending in person. As of Monday afternoon, the severe weather had not postponed the hearing.
Fair Finance had little in the way of available cash when it was forced into bankruptcy by creditors in early February. Fair Finance had sold more than $200 million in now apparently worthless and uninsured investment certificates to 5,300 investors in Ohio.
According to a report from the trustee given in August, the Akron accounts receivables and consumer loan company had just $565,060 in its checking account as of Nov. 24, 2009, the day when the FBI raided its offices and a related business in Indianapolis. When Bash became trustee in February, there was just $218,716 available.
The trustee has been chasing down money owed to Fair Finance ever since.
Additional funds came in from the sale earlier this year of two valuable cars owned by the Fair Finance co-owner, Indianapolis businessman and National Lampoon Inc. CEO Timothy Durham. Durham's remaining car collection is expected to be auctioned off in January in Arizona. An auction of Durham's personal art collection in October in Cleveland resulted in more than $400,000 in winning bids, but the two largest bidders, who com
bined to bid more than $300,000 on numerous items, have since been sued by Bash for non-payment.
Besides the money to Kurtzman Carson that was used for such things as processing creditor claims and the trustee's Fair Finance Web site, Vestige Digital Investigations was paid $30,346 to review Fair Finance's computer records.
The disbursement filings show such things as $3,831 to the Akron City Centre hotel, which was used earlier this year by the trustee as a meeting site for Fair Finance creditors. The trustee paid rent and utilities on Fair Finance properties as well as storage fees. Trinity Cathedral in Cleveland, the site of the Durham art auction, was paid $2,100. The Akron Beacon Journal received $1,314 for advertising.
The status report filed Monday with the court showed the trustee and staff:
• Continue to review information on numerous Fair Finance Co. transactions and dealings. The trustee ''continued to investigate and develop strategy and approach regarding the organizational structure and assets of over [70] entities which are or were owned or controlled by common owners of the Debtor and others owing obligations to the estate.''
• Continued to negotiate the return of political contributions.
• Continue working with RM Auctions and the bank holding the lien on a valuable Duesenberg car that has been pledged to the trustee.
• Began preparing complaints to recover additional obligations owed to the estate.
• Reviewed information regarding Fair Finance transactions in 2008 with Fortress Credit Co. ''and information provided to the trustee by the Department of Justice.''
The trustee wrote that he expects in upcoming weeks to focus on 12 matters, including pursuing mortgages, liens and more on behalf of the Fair Finance estate, and continuing ''to negotiate for the consensual turnover of assets from entities owing obligations to the estate,'' including agreements in principal with Durham and Diamond Investments.
While court records filed last year showed federal investigators suspected that Fair Finance was being operated as a Ponzi scheme, no one has been charged or arrested. Durham and business partner James Cochran bought Fair Finance in January 2002 from the Fair family in Akron that founded the business in 1934.
Jim Mackinnon can be reached at 330-996-3544 or jmackinnon@thebeaconjournal.com.
