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Legal fees nearing $9M in Fair Finance bankruptcy

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The trustee in the Fair Finance bankruptcy case and his law firm have run up legal bills approaching $9 million, nearly double the recoveries they've achieved to date for investors victimized by convicted fraudster Tim Durham.

Cleveland-based Baker & Hostetler is seeking $7.7 million for work and expenses from Jan. 1, 2011, through Aug. 31, 2012, and the firm says it is owed another $1.04 million specifically for the work of trustee Brian Bash, a Baker & Hostetler partner, the Akron Beacon Journal reported.

Bash since early 2010 has been trying to recover funds for investors of Ohio-based Fair Finance, which was led by Indianapolis financier Durham until his business empire collapsed in late 2009.

Bash so far has recovered just $5 million, despite default judgments of $44 million. He has filed dozens of civil lawsuits seeking about $1 billion in total. More than 5,000 creditors, mostly elderly Ohio investors, are owed more than $200 million.

Since recoveries fall short of Baker & Hostetler's tab, the law firm said it is requesting an “interim payment of an amount the court deems appropriate in its discretion” with other amounts to be paid later, the Beacon Journal reported. The firm is billing at rates ranging from $150 per hour to $825 per hour.

Bankruptcy Judge Marilyn Shea-Stonum will consider the request next month in U.S. Bankruptcy Court in Akron.

Shea-Stonum has urged Bash to look into making an interim distribution of recovered funds to Fair investors. Earlier this year she rejected a proposal from Bash that his firm be compensated based on a percentage of recovery. Based on the proposal, the firm could have collected more than $32 million if it recovers $200 million.

The judge called the proposal "troubling."

A federal jury in Indianapolis in June returned a guilty verdict on all 12 federal felony fraud counts for Durham, on eight of 12 counts for Fair co-owner James Cochran, and five of 12 counts for Rick Snow, the company’s chief financial officer. The trio are set to be sentenced Nov. 30.

The government had accused the men of running Fair Finance as a Ponzi scheme that stole more than $200 million from 5,000 Ohio investors who purchased investment certificates from the consumer-loan company.

Bash has more than 120 lawsuits still pending that seek to recover investor funds.

Durham and Cochran bought Fair Finance from Donald Fair in 2002.

More IBJ coverage about Durham and Fair Finance can be found here.

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  • Justice?
    Much of the law & legal system has been created to make $$ for lawyers and give a cushy job to pols who have become judges.
  • Laughing All the Way to the Bank
    You know, the only people who come out ahead in a bankruptcy are the attorney's and every one of them are laughing on their way to the bank!
  • Glad to see this article has the keyword "fraud"
    A rate of $825 an hour, huh? That seems completely unethical. The majority of Americans don't bring that much home in a whole week. What a shameful example of lawyering. I truly hope the bankruptcy judge slaps them down for this.
  • Wow
    This case just seems to attract more con men all the time...
  • Bash
    BttB90....you are right but short on the real description of these vultures. Since I am a civil guy, I won't use words like gutless, unethical and oh yeah..%#%*W*$*

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  1. So much for Eric Holder's conversation about race. If white people have got something to say, they get sued over it. Bottom line: white people have un-freer speech than others as a consequence of the misnamed "Civil rights laws."

  2. I agree, having seen three shows, that I was less than wowed. Disappointing!!

  3. Start drilling, start fracking, and start using our own energy. Other states have enriched their citizens and nearly elminated unemployment by using these resources that are on private land. If you are against the 'low prices' of discount stores, the best way to allow shoppers more choice is to empower them with better earnings. NOT through manipulated gov mandated min wage hikes, but better jobs and higher competitive pay. This would be direct result of using our own energy resources, yet Obama knows that Americans who arent dependent of gov welfare are much less likely to vote Dem, so he looks for ways to ensure America's decline and keep its citizens dependent of gov.

  4. Say It Loud, I'm Black and Ashamed: It's too bad that with certain "black" entertainment events, it seems violence and thuggery follows and the collateral damage that it leaves behinds continues to be a strain on the city in terms of people getting hurt, killed or becoming victims of crimes and/or stretching city resources. I remember shopping in the Meadows area years ago until violence and crime ended make most of the business pack you and leave as did with Lafayette Square and Washington Square. Over the past 10 to 12 years, I remember going to the Indiana Black Expo Soul Picnic in Washington Park. Violence, gang fights and homicides ended that. My great grandmother still bears the scares on her leg from when she was trampled by a group of thugs running from gun fire from a rival gang. With hundreds of police offices downtown still multiple shootings, people getting shot downtown during Black Expo. A number of people getting shots or murdered at black clubs around the city like Club Six on the west side, The Industry downtown, Jamal Tinsley's shot out in front of the Conrad, multiple fights and shootings at the skating rinks, shootings at Circle Center Mall and shooting and robberies and car jackings at Lafayette Mall. Shootings and gang violence and the State Fair. I can go on and on and on. Now Broad Ripple. (Shaking head side to side) Say It Loud, I'm Black and I'm Ashamed.

  5. Ballard Administration. Too funny. This is the least fiscally responsive administration I have ever seen. One thing this article failed to mention, is that the Hoosier State line delivers rail cars to the Amtrak Beech Grove maintenance facility for refurbishment. That's an economic development issue. And the jobs there are high-paying. That alone is worth the City's investment.

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