The Fair Finance Co. bankruptcy trustee has sued Carmel businessman Dan Laikin, saying he used his position as a Fair director
to borrow more than $19 million from the company that he now must pay back.
The suit, filed late Friday in northern Ohio, is the first major legal move by Fair Trustee Brian Bash to untangle the morass
of related-party loans that propelled the Akron, Ohio-based company into insolvency. By last year, the suit says, Fair “had
been utterly looted through insider loans.”
The case represents another setback for Laikin, the former CEO of Los Angeles-based National Lampoon Inc., who pleaded guilty
last fall to manipulating the stock price of that company and is awaiting sentencing.
Laikin, 48, is a longtime friend of Fair co-owner and CEO Tim Durham, an Indianapolis businessman who’s the target
of criminal securities fraud probe. Laikin served as director of Fair Finance, a consumer-loan company, from 2006 to 2009.
During that time, the suit says, Laikin “used his insider status to obtain loans ... on commercially unreasonable terms
and without formalities,” such as legally posting the assets he pledged as collateral. As a result, according to the
suit, Laikin was able to use those assets as collateral to other creditors.
An attorney for Laikin could not be reached Tuesday. Trustee Bash, a partner in the Cleveland law firm Baker & Hostetler,
was not available for comment.
Records filed with securities regulators show Durham used Fair like a personal bank after buying it in 2002, with money flowing
to support an ostentatious lifestyle, friends and business associates, as well as other companies he owned.
Related-party loans now top $168 million and represent the primary asset available to pay Ohio residents who purchased more
than $200 million in unsecured investment certificates from Fair. Fair in November halted payments on the certificates, which
were supposed to pay interest rates as high as 9.5 percent.
Records show Fair Finance lent to its parent, Fair Holdings, which in turn lent to DC Investments, a holding company jointly
owned by Durham and Indianapolis businessman Jim Cochran. DC Investments, known as DCI, then issued tens of millions of dollars
in loans, many of them to insiders.
“Fair Holdings and DCI essentially used [Fair Finance] as a cash cow to personally enrich the owners and other insiders
and affiliates,” the trustee’s lawsuit says. It notes that Fair Finance “generally did not collect regular
payments on loans to its parent companies, not even interest,” and took no steps to seize collateral on insider loans.
The Laikin loans technically came from DCI, though the three firms “are so entangled that they are one and the same
company,” the trustee says in court papers. He said he soon will be filing papers to fold Fair Holdings and DCI into
Fair Finance’s bankruptcy case.
Even though that hasn’t happened yet, Bash said in court papers that he decided to move forward with the Laikin suit
to assert Fair Finance’s security interest in a Los Angeles home that Laikin has listed for sale for $8.99 million.
Laikin, brother of Brightpoint Inc. CEO Bob Laikin, also posted stock held in one of Durham’s investment accounts as
collateral, according to the suit. The bulk of that collateral is Brightpoint Inc. stock worth $1.7 million.
Durham, 47, 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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These higher rates Co. e about only because physicians are now hospital employees. otherwise physicians couldn't charge these rates and share the windfall with the hospital. Community/rural hospitals probably not buying physicians practices and thus weren't getting the windfall anyway.
The incentive for poor people to get themselves off public assistance and "no longer be poor" is even with help...they're STILL POOR! Being poor, even with some assistance, isn't all that pleasant. (I speak from experience) It's a stubborn myth that poor people, who are on public assistance, are sitting in the lap of luxury. You should try living on just those "freebies" that you mentioned and see how meager they actually are. By the way, I didn't mean you had to buy/own a puppy...just pet one. :)
As near as I can tell the minority has ZERO constitutional obligation to offer a quorum to the majority. A requirement for quorum was inserted into the constitution so that tyrannical majorities could not simply shove through odious and objectionable legislation (which is exactly what they did.) By allowing a tyrannical majority to charge fines against the minority for exercising their constitutional prerogative to deny quorum the court as made a mockery of constitutional governance in the state of Indiana.
The voters elected the Reps to make a vote not walk out on the vote. They had to the right to exercise their opinion and vote "no" to the bill. Let me ask you this if you walked out of your job for 5 straight weeks would you get paid? Would you even have a job to go back to? If any elected official walks out on the people they should be arrested for stealing tax dollars from the public. They were elected to do a job and not leave when the job gets stuff.
I have been to several of their locations in Pennsylvania and always go in for 1 item and leave with a basket full of things. I'm very happy they decided on Indiana, now if only they would put the other store in eastside.