Bankruptcy and Legal Issues and Fraud and Banking & Finance and Investing and Lawsuits and Criminal Charges and Tim Durham and Law

Latest Fair Finance suits target Durham associates

December 27, 2011

Fair Finance Co.’s bankruptcy trustee has unleashed a new wave of lawsuits against financier Tim Durham’s friends and business associates—this time going after firms affiliated with Indianapolis restaurateur Henri Najem, the rapper Ludracis, former Indianapolis Colts quarterback Blair Kiel and others.

Trustee Brian Bash filed 10 lawsuits in U.S. Bankruptcy Court for the Northern District of Ohio on Friday. All seek repayment of loans or transfers Bash alleges Durham companies made in recent years when the indicted businessman’s financial empire was insolvent.

The lawsuits, which collectively seek more than $1.3 million, are among dozens Bash plans to file in the coming weeks, said David Proano, a Cleveland attorney representing the trustee.

Targets of Friday’s suits include Obsidian Conference and Catering Center, a catering business Najem and Durham owned that borrowed $30,000. Durham and Najem each personally guaranteed the loan, which is in default, but haven’t repaid it, court papers allege.

Najem, a former partner with Durham in several restaurant ventures, is best known for his Bella Vita restaurant at Geist Reservoir. Najem did not return a call seeking comment Tuesday morning.

Another suit filed Friday was against My Ghetto Holdings LLC, parent of myghetto.com, a social media website launched by Ludacris, a Durham friend. The site no longer operates, and My Ghetto Holdings has failed to repay its $170,000 loan, according to Friday’s suit.

The trustee also is seeking to recover $72,200 in principal and another $20,383 in interest from Blair Kiel Partners Inc., a firm launched by the former Notre Dame star and NFL player. Friday’s lawsuit says the company failed to repay a 2005 loan when it matured two years later. Efforts to reach Kiel for comment were unsuccessful.

Bash for nearly two years has been trying to recover money for Ohio investors who purchased unsecured investment certificates from Fair boasting interest rates as high as 9 percent. The Akron-based company stopped paying after it shut down in November 2009 following an FBI raid. About 5,300 investors are owed more than $200 million.

A grand jury in March indicted Durham and two business associates on charges of wire fraud, securities fraud and conspiracy to commit wire and securities fraud. Prosecutors allege that after buying Fair in 2002, Durham raided its coffers to fund a lavish lifestyle as well as a host of money-losing businesses.

Durham and his co-defendants, Jim Cochran and Rick Snow, have denied wrongdoing.

Among the targets of Friday’s suits were three firms bearing Durham’s name—Durham Whitesell & Associates, Durham Capital Corp. and Guyer Durham LLC. Four others were registered as having been based on the 48th floor of Chase Tower, where Durham had his offices until late 2009.

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