Bankruptcy and Fraud and Investing and Banking & Finance and Tim Durham and Law

Bankruptcy trustee sues Durham art bidders

November 18, 2010
durham

A Florida art dealer who successfully bid more than $260,000 on artwork last month that formerly belonged to Fair Finance Co. co-owner Timothy Durham says he canceled the sale.

And now he and another big bidder from Philadelphia are being sued by Fair Finance bankruptcy trustee Brian Bash for nonpayment on numerous pieces of work by contemporary artist Peter Max as well as Picasso and Norman Rockwell.

The two bidders combined represent about $300,000 of the more than $400,000 raised at the auction, held Oct. 16 at Trinity Cathedral in Cleveland. Proceeds from the auction are intended to partially repay Fair Finance's thousands of creditors, many of whom are elderly Ohio residents who bought more than $200 million of the Akron firm's apparently worthless investment certificates.

Both bidders on Tuesday said they were unaware of the breach-of-contract lawsuits, which were filed Monday in U.S. Bankruptcy Court in Akron.

Proceeds from the auction will go into the estate of Fair Finance for eventual distribution to thousands of creditors. Still, it's a drop in the bucket compared with the more than $200 million that an estimated 5,300 Ohio residents had invested in the company, which is under investigation.

In a court filing late last year, the U.S. Attorney’s Office in Indianapolis alleged Durham was operating a Ponzi scheme, using money from the sale of new investment certificates to pay off prior purchasers, but no chages have been filed.

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