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Durham art auction offers hope for Ohio investors

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The eclectic art collection of disgraced financier Tim Durham will hit the auction block Saturday in a sale that could help restore a small portion of the money lost by investors in Ohio's Fair Finance Co.

The collection of more than 100 works, including originals and prints from Renoir, Picasso and Peter Max, once appraised for $2 million for insurance purposes.

But it is unlikely the art will fetch near that amount at auction. Even a runaway success would make only a small dent in the $200 million Ohio families who invested in Fair Finance still are owed.

The offerings include dozens of Peter Max paintings—of an Indy Car, the Soldiers' and Sailors' Monument, and portraits of Bono, the Rolling Stones and Mick Jagger. Another draw is a series of Max portraits of Durham, the flashy Indianapolis investor who used much of the proceeds from Fair Finance investment certificates to lend millions to other companies he controls.

Also up for bid: Renoir and Picasso etchings, Norman Rockwell lithographs, and a James Bond movie poster autographed by 007 actors Sean Connery, Roger Moore, Daniel Craig, Timothy Dalton, Pierce Brosnan and George Lazenby.

The fact the artwork was owned by Durham could make it more valuable to collectors, said Kelly Burgan, an attorney representing Fair Finance bankruptcy trustee Brian Bash.

“We think the notoriety of this case will help value,” she said. “People have been wondering what will happen to the art since the inception of the case. We have had numerous people contact us with interest in the Peter Max and Renoir and Picasso prints and etchings.”

The trustee has advertised the auction nationally. Organizers expect bidders will pay at least the minimum on all of the works. If some don’t sell at the auction, managed by Cleveland Auction Co., the trustee will pursue an alternative method of sale, Burgan said.

Sharon Theobald, a senior fine art appraiser based in West Lafayette, wonders why the trustee didn’t choose New York City for the auction or select a company such as Sotheby’s or Christie’s that has a larger client base and a reputation in the art world for realizing the highest values.

She noted that the collection, with its mix of original works and prints, might not meet the standards of such an auction house.

The market for Peter Max paintings has been weak in recent years, with original works selling for between $1,200 and $3,600 at auction, well below the record $12,500 paid for a Max in 1990, Theobald said. Part of the reason is Max didn’t limit his output, leaving a glut of paintings and lax demand.

Durham's attorneys have acknowledged he owes tens of millions of dollars to Fair, but the trustee has struggled to collect on those debts because many of Durham's holdings, including his Geist home, serve as collaterial on loans to banks that have first priority for repayment.

Fair investors have pinned hopes on the auction of 18 Durham automobiles and the auction of his art collection. Most of the cars and works of art are free of liens.

An invitation-only preview of the auction offerings on Tuesday evening drew a few dozen people, the Akron Beacon Journal reported.

Public previews are scheduled from noon to 8 p.m. Wednesday through Friday. The auction is set for 10 a.m. Saturday at 2230 Euclid Ave. in Cleveland. Potential buyers may also submit bids online through ArtFact.com.

Durham has denied doing anything wrong. His attorneys say in court filings that Fair Finance provided prospective purchasers of Fair's investment certificates offering circulars that disclosed insider loans and other risks.

However, investigators are trying to build a case that Durham duped investors. In a court filing late last year, the U.S. Attorney’s Office in Indianapolis alleged Durham was operating a Ponzi scheme, using money from the sale of new investment certificates to pay off prior purchasers.

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  • CYA
    YOU TOOK MY COMMENT DOWN
  • Comment
    Do not underestimate a smartly run and well coordinated multijurisdictional investigation, which takes time. Tim set up an elaborate scheme of multiple companies and hundreds of accounts that he funneled money into for the purpose of then later spending it to be King of the Dorks, which was the lifestyle he created to have people and friends which he did not have before the money. Unfortunately the money was not his to spend on his personal lifestyle, it was investment monies that were supposed to be used for factoring receivables of art, cars, etc--not to purchase paintings of himself to hang on his walls or to fly 20 of his friends to the Super Bowl or to pay the IRS liens of his speaker buddy who ran around the country telling everyone they were in the top 100 fastest growing companies in the US.

    This article should have been entitled, "offers little hope" because the fact of the matter is none of the stuff at auction this week has any real value. Peter Max ruined his collector market by selling to any and all, a brand new Peter Max painting can be found on EBAY for $4500. And, it's my opinion that the collection was insured for $2M to simply prop up the balance sheet of Fair Finance, OR Tim overpaid for paintings and got a check for the difference back when he then spent--which is what he was allegedly doing when he was buying buses back in the Pyramid days before his company caused an accident that killed gospel singer legend Dottie Rambo. Like everything except Brighpoint and Cellstar that Durham touched, Rambo's tragic death illustrates the incompetence of everything Durham has done in his life.

    Tim Durham will be going to prison for a very long time. Give some credit and faith to the hard working folks in the FBI, SEC and State of Ohio Enforcement who are patiently, and methodically building an airtight case from which Houdini could not escape.

    Kudos to a real hero, Mr. Greg Andrews, for his ability to put this case together in the first place, many years during which he took crap from everyone while Durham publicly threatened to sue him, and his continued reporting of this travesty to ensure none of us ever forget.
  • TD wants to be like Buffett
    Remember in the CNBC piece about TD where he wanted to just like Warren. CELL is the stock symbol of TD's rare investment profit. TD also most likely bought his art, cars, and real estate at the top of the market. Buffett buys everything at the bottom.
  • Unbelieveable
    A Peter Max painting of Tim Durham?!? That's a "draw" to this auction? Who on earth would ever buy that? Let me know how much that one fetches...
    This story gets more incredible every time a new detail comes out.
  • Ut oh, it's Joe
    Vegas bet question: Will Hogsett go after these crooks or do they have their little file on him back from the days he had those girls on his desk....you remember......ut oh, Joe....can we please clean up Indy and get someone honest at the helm of both the local and federal prosecutors office
  • re
    Yes, his think tank, what is it called? Oh yeah, it's called "think about where my next paycheck is coming from."

    McKain is laughable in how he gives advice based on his experience as co-Ceo of one of the "100 fastest growing companies in America." But, thankfully he is well-documented in doing so, so I hope the feds include him in their charges because had he not flown around the world and lied to legitimize this Ponzi, it is very possible investors would never have believed Tim was someone they should have lent their hard-earned money to.
  • But Scott Mckain
    is a wonder person and world renown author. Tim D even hosted Scott's wedding. I believe Diamond Rio even played at his wedding.
  • King of the Dorks
    Remember in the book, "Where the Wild Things Are," where Max is crowned King of the Wild Things?

    Durham annointed himself King--only the only paid hangers-on he could find himself were a bunch of outcasts and dorks. Kato is the ultimate mooch--Kato, Carl, Scott, Gary--all of these losers who took money and gifts and trips from Durham--which incidentally, is where the money was blown--they are all losers who I hope are charged along with the principles of this heinous crime that has resulted in the loss of the life savings of honest, trusting elderly Ohians.

    Tim appears to continue living large and lavishly in Ohio--regaling in the attention he so believes he deserves, and blowing money that is not his to spend. None of his businesses generated any profit and certainly nothing he has done could possibly have ever even attempted to repay over $20Million, let alone $200Million.

    We pray the State of Ohio charges him first, and adds affinity crimes to the list, and Tim is given the pleasure of living in a state prison PRIOR to the start of his federal sentences.
    • Disappearing messages
      I've been following this mess and have noticed that messages disappeared occasionally. Assumed it was a CYA move by IBJ.
    • Comments removed?

      I've never had a comment removed.

      Did you say something which would be too controversial and it would be taken down "for cause" ?

      I've stepped on some toes, but I've always been able to produce a cite (or nearly so).
    • Not Buffet
      Could you explain the use of CELL and ZERO as all-caps? I'm lost. The same would go for the word "alot".

      Thanks!


      He'd never approach Buffet in class. He's (Durham)is greedy, simply greedy; and he had no hesitation to show everyone what he was able to accomplish. Most people would likely be sick after viewing Durham World. Buffet's worth is in stock, not "things". He has few physical things to show off a lifestyle. (He's the largest stock holder in Coke.) Buffet's also careful about what he buys - and why. And it's not worth zero.

      I worked in Omaha in the Summer of '97. Weekends were interesting searches, looking for "signs" of Buffet, managing to run into people (or their offspring of those people) who were early investors were filthy rich. They were also very friendly & open about their lives & lifestyles.

      Have you seen where he eats his food every Saturday? It's a nice place, very simple & plain, and to him, it fits his outlook. I think "the usual" is steak & cherry coke. (Cherry coke seems incredibly popular in Omaha.)

      Care to know what Buffet did when he first started out? He took investments from friends, their families, etc. No more than a few thousand each - what they could afford. Can you guess how many of them are filthy rich? (lots 'n lots)

      If you want a Buffet wanna-be, look at Biglari - he sees Mr. Buffet as an idol. (Except Buffet didn't rename the company he bought. Guess what type of business Berkshire Hathaway was? Textiles. IIRC, it was purchased for $29'000'000. Now? A holding company with a substantial focus upon insurance. Buffet would never rename a company "Buffet" or "Buffet Holdings", even though he could.

      I think Buffet has never received more than $100'000 as a salary and has not received stock. BH doesn't pay dividends! I think "Billy the Kid", as he was known in the tech world many years ago, has received $600'000 as a salary, and he doesn't receive stock. (Gates = "William Henry Gates III")

      When Microsoft went public in the mid-to-late 80s, he owned 44% of the company. If Microsoft has paid dividends, it's only within the previous few years (no more than 5-10, likely the former). It allowed them to amass $20B in cash. Then they could offer cash rather than stock when they bought/buy a company.

      10-20 years ago, he (Gates) had a finance manager selling something like 40'000 shares/day and investing the profit into plenty of other companies, save two: other tech companies - to avoid the possibility of competition against Microsoft and may be under consideration for purchase (the closest thing would be the business equivalent of "conflict of interest"; and genetic engineering that's Bill's sandbox to play in. Gates is getting richer over time, but owning less & less of Microsoft. He's getting rich enough he's been donating money to his foundation to do things such as inoculate Africans against malaria.[1]

      What Buffet has, he earned. It would be too easy to gobble his company up and try to keep it for himself. He's serious about it, but laid back and he still treats it like a hobby. He's already doing what Gates & Gates (Bill & Melinda) have done: contribute it to the Gates' Foundation. It's not as if he's going to need it once he dies. There have been news stories about Buffet's relatives. I think he's got a niece who might want a lot of his money, but -claims- otherwise. (I think she's a med student)

      Buffet does a lot of research before he makes overtures to a company. There's an article in print right now - my list of current magazines is substantial, so I'm guessing rather than digging. There have been several business magazines which have cover stories about Buffet. One of them (Fortune? August?) has a story about "Buffet's Secret Weapon". It's a clean-up man, heading to companies which need to be cleaned up, moving from company to company, ready on a moment's notice.

      Back to Biglari: review old editions of the IBJ - and keep abreast of current ones.

      Here's a sample: http://tinyurl.com/2dlapao

      Biglari had to find a company to use for holdings, so instead of "repairing" and selling Steak & Shake, he's renamed the holding company to his name.

      Look at the price of the stock. ($300) He's trying to emulate Buffet's technique of keeping serious investors. Biglari's already working on an insurance company. Biglari started out by buying as much stock as he could. He wants to establish something he is beholden to no one else until he's got enough stock to ensure someone can't kick him out of his own business. That $300 was the result of a reverse split of the stock to lock people out. I'll be surprised if he pays dividends for a long, long time.

      What I'd like to know is if Biglari studied Benjamin Graham, who was Buffet's model|mentor. I'd suggest buying the book. It's a good read.

      Cheers!


      [1] Not everyone can get malaria. Those (usually African Americans) who have sickle cell anemia cannot get malaria.
      • comments deleted
        why are comments taken off here???
        • Tim's art collection
          is just like his stock investments, worth ZERO. Except for his investment in CELL - Brightpoint.

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