IBJNews

Legal fees nearing $9M in Fair Finance bankruptcy

Back to TopCommentsE-mailPrintBookmark and Share

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.

ADVERTISEMENT

  • 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 $825 an hour, huh? That seems completely unethical. The majority of Americans don't bring that much home in a whole week. What a shameful example of lawyering. I truly hope the bankruptcy judge slaps them down for this.
  • Wow
    This case just seems to attract more con men all the time...
  • Bash
    BttB90....you are right but short on the real description of these vultures. Since I am a civil guy, I won't use words like gutless, unethical and oh yeah..%#%*W*$*

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. I am not by any means judging whether this is a good or bad project. It's pretty simple, the developers are not showing a hardship or need for this economic incentive. It is a vacant field, the easiest for development, and the developer already has the money to invest $26 million for construction. If they can afford that, they can afford to pay property taxes just like the rest of the residents do. As well, an average of $15/hour is an absolute joke in terms of economic development. Get in high paying jobs and maybe there's a different story. But that's the problem with this ask, it is speculative and users are just not known.

  2. Shouldn't this be a museum

  3. I don't have a problem with higher taxes, since it is obvious that our city is not adequately funded. And Ballard doesn't want to admit it, but he has increased taxes indirectly by 1) selling assets and spending the money, 2) letting now private entities increase user fees which were previously capped, 3) by spending reserves, and 4) by heavy dependence on TIFs. At the end, these are all indirect tax increases since someone will eventually have to pay for them. It's mathematics. You put property tax caps ("tax cut"), but you don't cut expenditures (justifiably so), so you increase taxes indirectly.

  4. Marijuana is the safest natural drug grown. Addiction is never physical. Marijuana health benefits are far more reaching then synthesized drugs. Abbott, Lilly, and the thousands of others create poisons and label them as medication. There is no current manufactured drug on the market that does not pose immediate and long term threat to the human anatomy. Certainly the potency of marijuana has increased by hybrids and growing techniques. However, Alcohol has been proven to destroy more families, relationships, cause more deaths and injuries in addition to the damage done to the body. Many confrontations such as domestic violence and other crimes can be attributed to alcohol. The criminal activities and injustices that surround marijuana exists because it is illegal in much of the world. If legalized throughout the world you would see a dramatic decrease in such activities and a savings to many countries for legal prosecutions, incarceration etc in regards to marijuana. It indeed can create wealth for the government by collecting taxes, creating jobs, etc.... I personally do not partake. I do hope it is legalized throughout the world.

  5. Build the resevoir. If built this will provide jobs and a reason to visit Anderson. The city needs to do something to differentiate itself from other cities in the area. Kudos to people with vision that are backing this project.

ADVERTISEMENT