IBJNews

Fair Finance trustee sues Durham relatives

Back to TopCommentsE-mailPrintBookmark and Share

Fair Finance Co.’s bankruptcy trustee has sued Tim Durham's sister and her husband, charging they defaulted on a loan from the company and now owe $1.2 million.

The case, filed Friday against Jeffrey and Dana Osler, is the latest in what is expected to be a string of loan-collection lawsuits brought by the trustee against friends and business associates of Durham, the embattled Indianapolis businessman who served as Fair's CEO.

Trustee Brian Bash said in the complaint that Fair was “utterly looted through insider loans,” leaving it unable to repay more than 5,000 Ohio residents who purchased unsecured investment certificates. The company owes the investors more than $200 million.

The insider lending spree began shortly after Durham and fellow Indianapolis businessman Jim Cochran purchased the Akron, Ohio-based finance company in 2002. The pair and businesses they controlled were the largest borrowers, pulling out tens of millions of dollars they never repaid.

Another big borrower was Carmel businessman Dan Laikin. The trustee sued Laikin last April, saying he used his position as a Fair director to borrow more than $19 million he failed to repay.

Friday’s suit suggests Bash doesn’t intend to let the comparatively smaller borrowers off the hook, even though the amounts at issue barely put a dent in Fair’s massive debts.

Jeffrey Osler was the general manager of Hilton Head National Golf Club before becoming an executive vice president and board member of Obsidian Enterprises Inc., Durham’s Indianapolis-based buyout company, in the early 1990s. Osler also served as an officer and director of a number of other Durham companies and maintained their financial records, according to Bash’s suit.

The suit says Osler took out his first loan in 2002, a line of credit for up to $200,000. Over the next three years, he regularly amended the loan, increasing the credit line and extending the maturity dates.

The final modifications extended the maturity date to 2008 and increased the credit line to $500,000. Even so, as of the end of 2010, the principal had swelled to $911,067. Bash also is seeking $297,000 in unpaid interest and $5,519 in late fees.

Osler’s wife also is a defendant in the suit because in 2005 she guaranteed the debt, the trustee’s complaint says.

Neither could be located for comment Monday morning. The couple is estranged. Dana filed for legal separation from Jeffrey last June in Marion County. She converted the case into a divorce proceeding in late 2010.

Kelly Burgan, an attorney for trustee Bash, said his legal team may file a handful of suits against other loan recipients in coming weeks. She declined to say who might be targeted.

Records filed with securities regulators list outstanding loans to other Obsidian insiders, including Scott McKain, a professional speaker who served as the company’s vice chairman. According to the records, another borrower with unpaid loans was local restaurateur Henri Najem, who owns Bella Vita restaurants on Geist Reservior and at Circle Centre mall. Some people on the loan lists—including McKain—have denied they received loans and say the records are wrong.

The trustee’s investigation into the collapse of Fair Finance is separate from an ongoing criminal probe overseen by the U.S. Attorney’s Office in Indianapolis.

Durham acknowledges owing large sums to Fair, but has denied criminal conduct. 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.
 

ADVERTISEMENT

  • Fair family is honest?
    Ohio Victim: If Donald Fair was so damned honest, why did he clam up about wrong doing when he was on the payroll for Durham? If he was so honest, why did the trustee sue him for his part in the deception? Fair is culpable too! Don't let him off because what he did wrong was less obvious! He should have ended up in jail too. He tried to pin it all on Durham. Durham was guilty. Fair made it possible for Durham to go longer without being caught. Why isn't Donald Fair in jail as an accomplice? Because he paid a fine instead.
  • OHIO VICTIM
    My hubby & I are Ohio victims. Our retirement funds were used and lost by these people for their own personal greed. We have a 90 year old friend who trusted these people. The Fair family was an honest law-abiding local family who just sold out to retire. If I had done what these people have, I'd be in jail by now. SHAME ON THEM ALL!
    • Scott McKain
      Poor Scott. All those lies int he books about how famous he is and how profitable and fast growing Obsidian and Pyramid were. And all those speakers like the guy in Ohio who dropped him because the IRS started chasing those tax payments he didn't make. I hope the trustee starts chasing him for all that money he got--he so deserves this.

      Hey Scott-pay what you owe. Repent. Your lies are what investors relied on and I hope everyone of them sues you personally. Blog all you want about being a victim of a cyberstalker, the only victims here are those thousands of people in Ohio whose life savings were stolen by YOUR company Obsidian when they were funneled over.

      • When's The Buck Stop?
        Seems like everyone's getting sued except the gut who was signing the checks.
      • Scotty is a hottie!
        Did you see his photo in Country Music Magazine where he was in the wedding party for the drummer of Diamond Rio? I also listened to the NEW Diamond Rio audiobook where he is the narrator. Diamond Rio ROCKS! :-)
      • Scottie to Hottie
        has done nothing wrong. Having Diamond Rio play at his wedding at TD's is not a crime. We don't all have the same taste in music.

        PS I hope this post does not get deleted some how.
        • Durham & Carpenter Mfg.
          When are they going to investigate Tim Durham and his X Father-In-Law, Beurt SerVaas, on pulling over $20 million from Carpenter Manufacturing in Mitchell, IN. They bankrupt the company and left hundreds out of jobs.

        Post a comment to this story

        COMMENTS POLICY
        We reserve the right to remove any post that we feel is obscene, profane, vulgar, racist, sexually explicit, abusive, or hateful.
         
        You are legally responsible for what you post and your anonymity is not guaranteed.
         
        Posts that insult, defame, threaten, harass or abuse other readers or people mentioned in IBJ editorial content are also subject to removal. Please respect the privacy of individuals and refrain from posting personal information.
         
        No solicitations, spamming or advertisements are allowed. Readers may post links to other informational websites that are relevant to the topic at hand, but please do not link to objectionable material.
         
        We may remove messages that are unrelated to the topic, encourage illegal activity, use all capital letters or are unreadable.
         

        Messages that are flagged by readers as objectionable will be reviewed and may or may not be removed. Please do not flag a post simply because you disagree with it.

        Sponsored by
        ADVERTISEMENT

        facebook - twitter on Facebook & Twitter

        Follow on TwitterFollow IBJ on Facebook:
        Follow on TwitterFollow IBJ's Tweets on these topics:
         
        Subscribe to IBJ
        1. How can any company that has the cash and other assets be allowed to simply foreclose and not pay the debt? Simon, pay the debt and sell the property yourself. Don't just stiff the bank with the loan and require them to find a buyer.

        2. If you only knew....

        3. The proposal is structured in such a way that a private company (who has competitors in the marketplace) has struck a deal to get "financing" through utility ratepayers via IPL. Competitors to BlueIndy are at disadvantage now. The story isn't "how green can we be" but how creative "financing" through captive ratepayers benefits a company whose proposal should sink or float in the competitive marketplace without customer funding. If it was a great idea there would be financing available. IBJ needs to be doing a story on the utility ratemaking piece of this (which is pretty complicated) but instead it suggests that folks are whining about paying for being green.

        4. The facts contained in your post make your position so much more credible than those based on sheer emotion. Thanks for enlightening us.

        5. Please consider a couple of economic realities: First, retail is more consolidated now than it was when malls like this were built. There used to be many department stores. Now, in essence, there is one--Macy's. Right off, you've eliminated the need for multiple anchor stores in malls. And in-line retailers have consolidated or folded or have stopped building new stores because so much of their business is now online. The Limited, for example, Next, malls are closing all over the country, even some of the former gems are now derelict.Times change. And finally, as the income level of any particular area declines, so do the retail offerings. Sad, but true.

        ADVERTISEMENT