Fair Finance Co.’s bankruptcy trustee is getting inquiries from parties interested in buying National Lampoon Inc., the Los Angeles-based comedy business led by embattled Indianapolis businessman Tim Durham.
Trustee Brian Bash doesn’t control Lampoon, but he is pursuing tens of millions of dollars in claims against two of its largest shareholders—Durham and fellow Indianapolis businessman Dan Laikin.
Durham stepped in as CEO after prosecutors in December 2008 charged Laikin with conspiring with stock promoters to artificially inflate Lampoon’s stock price from $2 to $5 a share. Laikin, who also served on Fair’s board, pleaded guilty to conspiracy to commit securities fraud last year, and he now is serving a 45-month prison sentence.
Akron, Ohio-based Fair and related entities lent millions of dollars to Lampoon in recent years, according to filings with Ohio securities regulators. Other Fair borrowers pledged Lampoon shares as loan collateral, the records show.
“We definitely have received inquiries” about buying Lampoon, said Kelly Burgan, an attorney for the trustee. But she emphasized the firm is not owned by the trustee and it’s premature to speculate on its sale.
“We haven’t yet determined what and how we would dispose of what interests we have,” she said.
Lampoon's stock tanked following Laikin’s arrest, and hasn’t recovered. The shares trade on the Pink Sheets for 5 cents apiece, giving the company a market value of only $475,000.
The trustee alleges that Durham and fellow Indianapolis businessman Jim Cochran “utterly looted” Fair after buying it in 2002. Bash charges Fair doled out tens of millions of dollars in risky related-party loans, stripping the company of its ability to repay more than 5,000 Ohio residents who bought unsecured investment certificates. The company owes the investors more than $200 million.
Durham has denied doing anything wrong and says prospective investors received offering circulars detailing the risks.
The trustee alleges Durham operated Fair as a Ponzi scheme, using proceeds from the sale of new investment certificates to pay off prior investors.