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

More Fair suits target Durham family members

February 14, 2012

The latest round of lawsuits filed by Fair Finance Co.’s bankruptcy trustee includes more people with family ties to Indianapolis financier Tim Durham, including his ex-wife, Joan SerVaas.

Since early 2010, trustee Brian Bash has been trying to recover funds for investors of Ohio-based Fair Finance, which was led by Durham until his financial empire collapsed in late 2009. Investors lost more than $200 million when the company failed.

Besides SerVaas, the newest suits target B.J. Durham, SerVaas’ biological son who was adopted by Durham, and the financier's sister, Courtney Durham.

They are among a long list of Durham’s friends and business associates, as well as companies and charities, that records say received loans or transfers from the indicted executive or his business in recent years. Bash contends the payments were fraudulent transfers that must be repaid because they were made when Durham and his companies were insolvent.

The suit against Joan SerVaas alleges that she accepted money transfers from Tim Durham totaling at least $226,000. B.J. Durham is accused of accepting $59,107 in transfers from Tim Durham, according to the suit.

Another complaint alleges that Courtney Durham accepted $64,700 in money transfers from her brother.

The suits against the three, filed this month, follow a lawsuit against Michael Durham, Durham’s stepson from his marriage to SerVaas. Bash accuses Michael Durham of accepting $49,712 in transfers from Tim Durham.

And late last month, Bash sued Durham’s mother, Mitza Durham of Seymour, accusing her of receiving 58 checks or wire transfers totaling $831,000 from Durham from February 2006 through November 2009.

So far in February, Bash has filed more than 40 lawsuits against notable defendants such as rapper Ludacris, former Playboy playmate Jamie Ferrell and former O.J. Simpson confidant Kato Kaelin.

Other defendants include former IndyCar team Playa del Racing Inc., Benjamin Harrison Presidential Site Inc. and Henri Najem, who owns the Bella Vita restaurants downtown and on Geist Reservoir. His brother Anthony Najem, who co-founded Fishers-based construction firm Meyer Najem Corp., also is a defendant.

The amounts the latest defendants are accused of receiving from Durham are relatively small compared with the $1.2 billion Bash is seeking from Fair’s lenders—Rhode Island-based Textron Financial Corp. and New York-based Fortress Credit Corp.

That suit, filed Feb. 7, charges the companies turned a blind eye to Durham’s fraudulent activities because they were making millions of dollars on their lending relationship and held first liens on the only Fair assets with real value.

It accuses the two companies, which have billions in assets, of aiding and abetting theft, fraud and insiders’ breaches of fiduciary duty.

The suits are part of Bash’s continuing quest to recover some of the more than $200 million that Fair owes more than 5,000 Ohio investors who purchased unsecured notes from the company.

Bash alleges Durham looted Fair after buying it in 2002, stripping the business of the financial wherewithal to repay the investors.

Durham and two business partners, James Cochran and Ricky D. Snow, were arrested in March after being indicted on 12 felony counts, including conspiracy to commit wire and securities fraud. They deny wrongdoing.
 

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