The former owner of Fair Finance Co. has agreed to pay $3.5 million to settle a lawsuit brought against him by a bankruptcy trustee working to recover millions of dollars for investors of the company.

A bankruptcy judge in Ohio approved the settlement Thursday.

Trustee Brian Bash sued Donald Fair in February. The lawsuit sought more than $150 million from Fair, who sold his Akron, Ohio-based company to Tim Durham and fellow Indianapolis businessman Jim Cochran in 2002.

Durham, Cochran and Fair Chief Financial Officer Rick Snow were given stiff federal prison sentences last week after they were convicted on multiple fraud charges for running Fair Finance like a Ponzi sceme. Durham was sentenced to 50 years, Cochran to 25 years, and Snow to 10 years.

According to the trustee's lawsuit, their fraud was made possible only because Donald Fair agreed to stay with the company for five years after the sale as chairman emeritus, with millions of dollars in payments not due until the contract expired in 2007, the suit said.

Donald Fair’s continued role gave false confidence to the Ohio residents who purchased unsecured notes from Fair and still are owed $250 million, the trustee says.

Meanwhile, Donald Fair will pay the $3.5 million settlement before the end of the year, according to the terms of the deal.

The fact the amount will be paid in a lump sum and within the next month were big drivers to settle, the trustee said in court documents. Also, litigating remaining claims against Donald Fair would be time-consuming and costly, with no guarantee the trustee would prevail on the claims, the trustee said.

The 86-year-old Fair’s health was a factor as well.

“The subsequent operation of the company as a fraud by Durham and Cochran, and the circumstances surrounding its collapse, have taken a personal toll on Donald R. Fair,” the trustee said in court documents. “Accordingly, the trustee has considered the potential implications of difficult litigation with Mr. Fair, who is advanced in age and living in California.”

Also on Thursday, the bankruptcy judge approved a $75,000 settlement from rapper Ludicris and Ludacris Foundation Inc., a not-for-profit focused on improving the lives of disadvantaged young people. Together, they had received more than $106,000 from Durham, according to the trustee.