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Trustee settles for $3.5M with former Fair Finance owner

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The former owner of Fair Finance Co. has agreed to pay $3.5 million to settle a lawsuit brought against him by a bankruptcy trustee working to recover millions of dollars for investors of the company.

A bankruptcy judge in Ohio approved the settlement Thursday.

Trustee Brian Bash sued Donald Fair in February. The lawsuit sought more than $150 million from Fair, who sold his Akron, Ohio-based company to Tim Durham and fellow Indianapolis businessman Jim Cochran in 2002.

Durham, Cochran and Fair Chief Financial Officer Rick Snow were given stiff federal prison sentences last week after they were convicted on multiple fraud charges for running Fair Finance like a Ponzi sceme. Durham was sentenced to 50 years, Cochran to 25 years, and Snow to 10 years.

According to the trustee's lawsuit, their fraud was made possible only because Donald Fair agreed to stay with the company for five years after the sale as chairman emeritus, with millions of dollars in payments not due until the contract expired in 2007, the suit said.

Donald Fair’s continued role gave false confidence to the Ohio residents who purchased unsecured notes from Fair and still are owed $250 million, the trustee says.

Meanwhile, Donald Fair will pay the $3.5 million settlement before the end of the year, according to the terms of the deal.

The fact the amount will be paid in a lump sum and within the next month were big drivers to settle, the trustee said in court documents. Also, litigating remaining claims against Donald Fair would be time-consuming and costly, with no guarantee the trustee would prevail on the claims, the trustee said.

The 86-year-old Fair’s health was a factor as well.

“The subsequent operation of the company as a fraud by Durham and Cochran, and the circumstances surrounding its collapse, have taken a personal toll on Donald R. Fair,” the trustee said in court documents. “Accordingly, the trustee has considered the potential implications of difficult litigation with Mr. Fair, who is advanced in age and living in California.”

Also on Thursday, the bankruptcy judge approved a $75,000 settlement from rapper Ludicris and Ludacris Foundation Inc., a not-for-profit focused on improving the lives of disadvantaged young people. Together, they had received more than $106,000 from Durham, according to the trustee.
 

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  • Wow...they get a refund of stolen money from a rapper and not gov. Mitch???
    It is hard to believe the rapper can return stolen funds, but not our governor. Wait, I guess it is not hard to believe. Poor Purdue.

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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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