About 850 people showed up for the first creditors meeting in the bankruptcy case of Fair Finance on Monday, creating the need for two separate programs to address the crowds.
The size of the group of mostly older investors surprised attorney Brian Bash, the court-appointed trustee in the bankruptcy case. Bash had reserved the ballroom at the Akron City Centre Hotel, which seats 250 people.
Bash said the case may not be resolved for a few years, which drew sighs from the crowd.
Bash said he has recovered about $270,000 from Fair's cash and checking accounts.
''Yeah, that's a mere pittance'' of the $200 million in assets, he said.
Ultimately, there's only about $67,000 in accounts receivable because there are other loans and accounts involved, he said.
Bash told the audiences he does not have access to information for the parent and affiliate companies of Fair Finance and related company Fair Holdings and said it is apparent that a large number of loans or investments from certificate holders were used to give out loans without collecting back from those other companies.
Bash said he has sued to try to include all other companies, including Fair Holdings and an Indianapolis-based company called DC Investments (DCI).
Court records have shown that more than 5,300 people and organizations, including churches, bought investment certificates totaling about $200 million from the small investment and loan company founded decades ago in Akron. The Fair family sold the company to Tim Durham and Jim Cochran, two Indiana-based businessmen, in 2002. Most of the certificate holders are in the Greater Akron area.
During his presentation, Bash showed the crowd a slide of what he believed were Durham's personal loans, not including loans Durham gave from his companies. Those loans totaled about 15 different companies.
''Timothy Durham has been a very busy person,'' Bash said. ''He's got money out there and virtually all the money he used was derived from Fair Finance. That's where your certificate money has gone, we believe.''
Bash said he has recently found real estate in California, some formerly owned by the singer Cher, that was purchased by DC Investments, but no deed was ever filed, though one was recently found through DCI.
While it's customary for a debtor in bankruptcy to present assets and liabilities, no one from the company prepared statements. So Bash's forensic accountant, Howard Klein, did so based on documents he has been reviewing that are being held by the FBI.
Bash reminded investors that information about the case is online at http://www.fairfinancetrustee.com.
''Most cases like this, there's no hidden cash, as much as you want to believe there is,'' Klein told the crowd. ''I do not believe there is hidden cash.'' Klein added that records he's seen indicate Durham was having cash-flow problems in 2009 and wrote ''need cash'' in memos.
Bash said his responsibility was to recover money for investors through the bankruptcy proceedings and he didn't have a role in the criminal investigation.
''I feel for you. I feel for all of you,'' Bash said. ''I can't begin to tell you how much I can recover for you.''
Lines of people snaked through the hotel's lobby waiting to get into the ballroom 30 minutes before the meeting. Hotel workers opened partitions to the adjoining room to let more people in.
Bash said he had been told he could expect as few as 25 people and as many as 250. He told hotel staff he wouldn't turn anyone away and would hold another meeting after speaking to the first group of about 600.
While Bash apologized to the crowd in the first meeting, another 250 waited in the hallways and took hotel chairs and sat outside under overhangs and out of the rain.
The meeting was considered ''quasi-judicial,'' as part of bankruptcy court proceedings.
At the beginning, Bash asked whether there were any representatives of Fair Finance in the crowd, which was met with giggles and cackles. Bash said all officers of Fair Finance declined to attend and testify.
After the first meeting, Tom Bird of Millersburg said Bash didn't say anything he wasn't expecting and he didn't have any more hopes of recovering more than $200,000 he and his brother invested for their company.
''He's doing his job,'' Bird said of Bash, ''but it's unfortunate that all the investors are going to be sitting holding their breath for three to six years and will probably get very little.''
He and his brother plan on writing off the loss for their business, which he declined to name.
Robert Wright of Stow, an investor with what he called a ''significant amount'' with Fair, moved to form a creditors' committee to work with Bash.
Bash adjourned the meeting until 1 p.m. Aug. 2. (no location was set) and said interested people could contact Wright.
After the meeting, Wright said he's a ''regular guy'' who wants to make sure what happened to Fair Finance investors doesn't happen to others. He said investors who are interested in ''rolling up their sleeves and doing hard committee work'' could e-mail him at wrightrobertj@yahoo.com.
So far, Bash's investigation into Fair Finance Co. has found assets of $20.9 million and liabilities of more than $220.3 million, according to bankruptcy court documents filed last week.
In a court status report last week, Bash said he was eyeing fancy cars and artwork he believes are worth millions and were purchased mostly by Durham with investors' money.
On Monday, Bash said he believed those items will be worth money, but like property, they are going to need buyers and the markets to sell those items are difficult now.
The FBI in late November raided Fair Finance and a related business in Indiana, with court records showing investigators suspected the business was being operated as a Ponzi scheme. Earlier this year, Fair Finance went into bankruptcy as investors sought to recover assets. The investment certificates, which promised to pay high interest rates, were not government insured.
No one has been charged in the investigation.
Betty Lin-Fisher can be reached at
330-996-3724 or blinfisher@
thebeaconjournal.com.
