Fair Finance Trustee Finds Someone With Deep Pocket To Help Recover Money For Defrauded Investors

The bankruptcy trustee for Fair Finance has to do date been going after nickels and dimes to chip away at the more than $200 million that Ponzi schemer Tim Durham stands accused of defrauding out of small investors in Ohio. The trustee may have hit pay dirt, however, with the latest lawsuit he filed against the companies that financed Durham's purchase of the family-owned factoring business a decade ago. Trustee Brian Bash's latest lawsuit against Textron Financial Corp. and Fortress Credit Corp. seeks more than $1 billion in damages. The Akron Beacon-Journal's Jim Mackinnon has the story:

Fair Finance trustee Brian Bash says two companies that financed Indianapolis businessman Tim Durham’s purchase and operation of the now-bankrupt Akron company owe the estate more than $1 billion in actual and treble damages.

To be more precise, Bash, a Cleveland attorney, is seeking nearly $1.2 billion, saying the companies helped Durham and others run Fair Finance as a Ponzi scheme, according to a 152-page lawsuit filed Tuesday afternoon in U.S. Bankruptcy Court in Akron.

The lawsuit says Bash has an email showing one financial executive worried in late 2003 that Durham was using Fair Finance as a “piggy bank.”

Bash is suing Textron Financial Corp. of Providence, R.I., and Fortress Credit Corp. in New York City. Textron Financial loaned Durham $22 million, with $16 million used to buy Fair Finance in 2002 from the Fair family, according to the court document.

It's highly unlikely Bash could ever expect to recover anything close to what he is seeking to recover from the two companies, but he might be successful in collecting more than the nickels and dimes he's been collecting from persons and businesses he claims benefited from Durham's Ponzi scheme. The e-mail Bash uncovered includes statements from a Textron executive of his awareness as far back as 2003 that Durham was using the company as a piggy bank to cover the losses of his other businesses. Textron was repaid all of the $22 million it initially loaned to Durham to purchase the company. “Neither Textron nor Fortress cared about the harm being caused to the debtor and the debtor’s creditors because they, as lenders, were being regularly paid, were fully secured by the debtor’s only valuable assets, and were turning substantial profits on their business relationships with the debtor and Durham,” the lawsuit claims

The trustee's latest lawsuits also includes claims against former O.J. Simpson house boy, Kato Kaelin, former Playboy Playmate Jami Farrell and rap artist Ludacris.