Most of the $1.8 million that Fair Finance trustee Brian Bash has recovered so far could go to attorneys and accountants working on the massive fraud case involving Indianapolis financier Tim Durham.
Bash’s Cleveland law firm, Baker Hostetler, accounts for the largest part of about $1.7 million in professional fees, which were recently submitted for approval by U.S. bankruptcy court in northern Ohio. The fees cover 2010 expenses.
Bash has said he expects to recover $78.5 million more of the estimated $230 million that investors lost to Fair Finance’s alleged Ponzi scheme, the Akron Beacon Journal reported.
Indianapolis businessman Tim Durham bought Ohio-based Fair Finance in 2002 and used it to orchestrate the largest Ponzi scheme in state history, Bash alleges. Durham also faces criminal charges in Indianapolis, where he is under home detention.
Bash has gone after real estate, paintings and Durham's classic car collection. He's also filed multiple lawsuits and plans to file more, his counsel Kelly Burgan said in a recent petition for payment.
Bankruptcy judges have final say over payments to lawyers and other professionals working on such cases.
Baker Hostetler spent 4,516 hours on the case in 2010 and racked up $1.3 million in fees, according to the recent petition for payment. The filings do not include Bash’s hours.
The firm's hourly rates ranged from $680 for the top-paid partner to $120 for a law clerk. The average was $299 per hour.
Burgan logged nearly 1,344 hours at $400 per hour.
“Baker Hostetler takes seriously the losses suffered by the debtor’s investors in excess of $200 million,” Burgan wrote in the petition.
The firm’s efforts resulted in quick initial recoveries, plus the pending lawsuits, she noted.
Forensic accounting firm Howard L. Klein Co. in Beachwood, Ohio, submitted a bill for $298,156 for 1,327 hours of work, or an average rate of $224 per hour.
Attorneys Michael Moran and David Mucklow, special counsel to Bash, and Baker & Daniels, Bash’s attorneys in Indianapolis, also submitted bills.
More of IBJ's coverage of Tim Durham and Fair Finance can be found here.