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Filing shows Durham's personal finances in shambles

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Indicted financier Tim Durham continues to have ownership stakes in more than a half-dozen businesses, and he has friends and associates who owe him millions of dollars. The problem is few of his business holdings are worth much. And even if everyone who owed Durham money paid him—which seems unlikely—his assets still would be a fraction of his debts.

That’s the picture that emerges from the 20-page financial statement Durham’s attorney filed in federal court late Friday. The filing doesn’t attempt to place a value on his assets but estimates he owes creditors $77 million.

Durham owes the largest amount, $29 million, to Obsidian Enterprises Inc., his now-defunct Indianapolis-based leveraged buyout firm. The money reflects his personal guarantee on loans Obsidian took out from Akron, Ohio-based Fair Finance Co.—the business prosecutors allege he ran as a Ponzi scheme.

The filing lists his largest single asset as his 100-percent ownership interest in Custom Cryogenic Grinding, an Indianapolis-based recycler of rubber and plastic, whose fair market value is listed as $2.9 million.

Other assets used to be worth more but have plunged in value. For example, Durham owns 11.8 million shares of Los Angeles-based National Lampoon Inc., where he serves as CEO. However, as of April, those shares were worth just 2 cents apiece, or $236,000, according to the filing.

Attorneys overseeing Fair Finance Co.'s bankruptcy liquidation had believed for months that Durham lacked the personal wealth to put a dent in the money owed to 5,200 Ohio residents who purchased more than $200 million in unsecured notes from Fair. The notes slid into default after the company shut down in November 2009 following an FBI raid.

The filing, however, makes public for the first time the utterly bleak state of Durham’s finances. As recently as 2008, he boasted to the business news channel CNBC that he had a net worth of $75 million—a figure investigators say belied reality.

Durham already has turned over to Fair's bankruptcy trustee many of his easiest-to-liquidate assets, including his collection of artwork and exotic cars.

A 23-page grand jury indictment returned this spring alleges Durham and business partner James F. Cochran worked with former Fair Finance Chief Financial Officer Rick D. Snow to devise and execute a scheme to defraud Fair’s investors. Authorities say that after Durham bought Fair in 2002, he doled out related-party loans with abandon, stripping the company of its ability to repay investors. He made many of the loans to himself, to his businesses and to associates who later defaulted.

Durham, Cochran and Snow have denied wrongdoing.

More of IBJ's coverage of Durham and Fair Finance can be found here.


 

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  • r u kidding
    Must be nice to tell the court you are broke, drive around in a BMW, have your groceries delivered and stay in diamond point and now downtown in a condo. sounds like being broke. i would like to be broke as well. wow are you kidding.
  • What parents?
    his dad, Chuck, was smart and took off! He left his dental practice and family. He has been MIA since this went down. I would say he's the smartest one of the bunch
  • Where is money coming from?
    Has anybody else wonder how is Tim surviving? It takes money to hang out in a condo in downtown Indy, it takes money to purchase new computer equipment and I am sure that if the prosecutors look into it, they will find money hidden outside of the country.
  • It happens to the good ones too
    Fastest-Growing Indianapolis-Area Public Companies
    Publication: Indianapolis Business Journal
    Publication Date: 16-SEP-02

    Obsidian debuts in top spot on fastest-growing list

    The recession's impact was readily apparent when IBJ researchers compiled this year's list of fastest-growing Indianapolis-area public companies. Only 21 companies met criteria to qualify for the list, which usually features 25 companies.
  • "Loans?"
    Would the reporters respectfully please stop calling Durham's looting "loans." He did not borrow, he stole, and when he got caught flew back from LA, holed up at Chase Tower and wrote all those loan documents which is why the dates don't match. We hope the BK trustee gets him for bankruptcy fraud TOO and that all convictions run consecutively and not conservatively. We hope Washington comes in to assist in the trial of these criminals so they can never again in their lives do this to anyone. We will have no Christmas this year or next year because all our discretionary money was stolen by Tim so he could pretend to be something he never was.

    What he is is a thief. Lock him up here in the Akron county jail with no bail and let's see what comes out of his mouth then.
  • Questiom
    Does anyone know if Scott McKain has been questioned about the chapter on Obsidian he put in his book "all business is show business" where he allegedly claims Durham was making money hand over fist and their investors were sophisticated and accredited? Same question with the reason his house went into foreclosure a week after the FBI raided Durham, does anyone know anything about that. Thanks.
  • PARENT'S MUST BE PROUD
    This guy is too much.He surely made his parent's proud of him I am sure????I can't wait to see these guy's in akron.Rumor has it what come's to akron may not leave akron.We need some more horse's ass's in the amish field's to plow the field's.

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  1. Cramer agrees...says don't buy it and sell it if you own it! Their "pay to play" cost is this issue. As long as they charge customers, they never will attain the critical mass needed to be a successful on company...Jim Cramer quote.

  2. My responses to some of the comments would include the following: 1. Our offer which included the forgiveness of debt (this is an immediate forgiveness and is not "spread over many years")represents debt that due to a reduction of interest rates in the economy arguably represents consideration together with the cash component of our offer that exceeds the $2.1 million apparently offered by another party. 2. The previous $2.1 million cash offer that was turned down by the CRC would have netted the CRC substantially less than $2.1 million. As a result even in hindsight the CRC was wise in turning down that offer. 3. With regard to "concerned Carmelite's" discussion of the previous financing Pedcor gave up $16.5 million in City debt in addition to the conveyance of the garage (appraised at $13 million)in exchange for the $22.5 million cash and debt obligations. The local media never discussed the $16.5 million in debt that we gave up which would show that we gave $29.5 million in value for the $23.5 million. 4.Pedcor would have been much happier if Brian was still operating his Deli and only made this offer as we believe that we can redevelop the building into something that will be better for the City and City Center where both Pedcor the citizens of Carmel have a large investment. Bruce Cordingley, President, Pedcor

  3. I've been looking for news on Corner Bakery, too, but there doesn't seem to be any info out there. I prefer them over Panera and Paradise so can't wait to see where they'll be!

  4. WGN actually is two channels: 1. WGN Chicago, seen only in Chicago (and parts of Canada) - this station is one of the flagship CW affiliates. 2. WGN America - a nationwide cable channel that doesn't carry any CW programming, and doesn't have local affiliates. (In addition, as WGN is owned by Tribune, just like WTTV, WTTK, and WXIN, I can't imagine they would do anything to help WISH.) In Indianapolis, CW programming is already seen on WTTV 4 and WTTK 29, and when CBS takes over those stations' main channels, the CW will move to a sub channel, such as 4.2 or 4.3 and 29.2 or 29.3. TBS is only a cable channel these days and does not affiliate with local stations. WISH could move the MyNetwork affiliation from WNDY 23 to WISH 8, but I am beginning to think they may prefer to put together their own lineup of syndicated programming instead. While much of it would be "reruns" from broadcast or cable, that's pretty much what the MyNetwork does these days anyway. So since WISH has the choice, they may want to customize their lineup by choosing programs that they feel will garner better ratings in this market.

  5. The Pedcor debt is from the CRC paying ~$23M for the Pedcor's parking garage at City Center that is apprased at $13M. Why did we pay over the top money for a private businesses parking? What did we get out of it? Pedcor got free parking for their apartment and business tenants. Pedcor now gets another building for free that taxpayers have ~$3M tied up in. This is NOT a win win for taxpayers. It is just a win for Pedcor who contributes heavily to the Friends of Jim Brainard. The campaign reports are on the Hamilton County website. http://www2.hamiltoncounty.in.gov/publicdocs/Campaign%20Finance%20Images/defaultfiles.asp?ARG1=Campaign Finance Images&ARG2=/Brainard, Jim

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