Tuesday, May 12, 2015
Fortress Credit Corp. Agrees To Pay $35 Million To Settle Fair Finance Claims
Fortress Credit Corp. was one of the companies that loaned money to convicted Ponzi schemer Tim Durham to acquire the Ohio-based factoring company, Fair Finance, back in 2002. After years of litigation by the bankruptcy trustee for Fair Finance, Fortress has agreed to a settlement payment of $35 million according to a new filing with the bankruptcy court yesterday. This is the by far the largest recovery by the bankruptcy trustee to date. Expenses related to the administration of the bankruptcy estate have largely consumed the paltry sums collected from other adverse parties. Multi-million dollar judgments against Durham and his partner, James Cochran, are unlikely to recover a dime for the investors. This is the first hope the several thousand Ohio residents have had of recovering at least a fraction of what they invested and lost in Fair Finance. Their losses exceeded $220 million. The trustee has pending litigation against Durham's other lender, Textron Financial Corp., which is still pending. The bankruptcy trustee has argued that the two lenders knew or should have known Durham was using the proceeds of the monies they loaned to him to acquire Fair Finance to operate a Ponzi scheme.