Legal Issues and Bankruptcy and Investment Losses and Fraud and Banking & Finance and Investing and Tim Durham and Law

Tim Durham's exotic cars hit auction block

January 21, 2011

The bulk of Tim Durham’s collection of exotic cars will go up for auction Friday afternoon, with a 1929 Duesenberg driven by Elvis Presley in the 1966 movie "Spinout" sure to draw the most interest.

The Duesenberg Model J Dual Cowl Phaeton could fetch $1 million to $1.3 million, according to an estimate from the auctioneer, RM Auctions of Ontario, Canada. It is one of nearly two dozen former Durham vehicles being sold at the auction at the Arizona Biltmore Resort & Spa in Phoenix.

The bankruptcy trustee for Fair Finance Co. scheduled the auction to raise money for creditors of the defunct company, including more than 5,000 Ohio residents who hold more than $200 million in unsecured investment certificates.

The Akron, Ohio, company collapsed in late 2009. The trustee charges in court papers that its owners, Durham and fellow Indianapolis businessman Jim Cochran, “utterly looted” the business, pulling out tens of millions of dollars in insider loans that were not repaid.

But it’s unlikely the auction will put much of a dent in Fair’s massive debts. The bank holds a lien on the Duesenberg, for instance, worth $1 million or more, ensuring it will receive the bulk of the auction price.

Other cars in the auction have much lower estimated selling prices. The collection includes:

- A 1929 Auburn 8-90 Speedster, $120,000 to $160,000.

- A 2002 Lamborghini Murcielago, $110,000 to $130,000.

- A 2006 Bentley Continental Flying Spur, $60,000 to $80,000.

- A 2003 Astin Martin Vanquish, $50,000 to $75,000.

- A 1964 Rolls-Royce Silver Cloud III, $20,000 to $40,000.

Durham, who is the target of civil and criminal investigations, has denied breaking any laws but has acknowledged he owes Fair millions of dollars. He voluntarily turned over the cars to bankruptcy trustee Brian Bash last summer.

Attorneys for Durham say offering circulars that Fair provided to prospective purchasers disclosed the insider loans and other risks.

However, investigators are trying to build a case that Durham duped investors. In a court filing in late 2009, 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.

The Durham cars are being sold as part of an auction that includes more than 180 vehicles. Details on all the cars are available at rmauctions.com.

 

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