Tim Durham’s ex-wife and one of her sons together have agreed to pay $110,000 to settle a lawsuit brought against them by the Fair Finance Co. bankruptcy trustee.
Since early 2010, Trustee Brian Bash has been trying to recover funds for investors of Akron, Ohio-based Fair Finance, which was led by Durham until his financial empire collapsed in late 2009.
In a Thursday Ohio court filing, attorneys for the trustee said Joan SerVaas has agreed to pay $100,000 and Bernard Durham $10,000 to settle the suit. Bernard Durham is the son of SerVaas and Bernard Marie, her first husband.He changed his surname to Durham after his mother married Tim Durham. (An earlier version of this story included incorrect information on the family connection).
Bash had claimed that SerVaas and Bernard Durham had received nearly $300,000 from Durham and his affiliated companies that Durham ultimately withdrew from Fair Finance. Bash claimed SerVaas received $126,000 from Durham and another $100,000 from DC Investments LLC. The trustee also claimed Bernard Durham received $40,607 from Durham and $15,700 from DC Investments, in addition to another $2,800 from Diamond Investments LLC, according to court documents.
Attorneys for the trustee said in the court filing that the trustee agreed to the settlement due to Bernard Durham’s “limited ability to pay the claims” and SerVaas’ assertions that the money transfers benefited Durham because the funds helped care for his children.
SerVaas and Bernard Durham “established to the trustee’s satisfaction that they received the transfers in good faith and without knowledge of Timothy Durham’s fraud,” the lawyers wrote in the filing.
Durham and many friends and business associates drew millions of dollars from Fair Finance, leaving the company unable to repay more than 5,000 Ohio investors who bought more than $200 million in unsecured notes from the company.
Federal prosecutors charged that Durham ran Fair as a massive Ponzi scheme. A jury in June 2012 found Durham guilty on 12 felony counts—a verdict he’s appealing. A judge sentenced him in August of that year to 50 years in prison.
Business partner Jim Cochran received a 25-year sentence, and former CFO Rick Snow was sentenced to 10 years.