Baker Hostetler Cleveland partner Kelly S. Burgan was quoted in the March 17, 2011, Indianapolis Business Journal article, “Fair Finance investors likely to recover little money.”
According to the article, Ohio investors in the bankrupt Fair Finance Co. will recoup a small amount of the $230 million lost in what officials are calling the largest corporate fraud case in Indiana history. Timothy S. Durnham, James F. Cochran and Rick D. Snow were indicted on Wednesday and face felony charges of 10 counts of wire fraud, one count of securities fraud and one count of conspiracy to commit wire fraud and securities fraud.
Baker Hostetler Cleveland partner Brian A. Bash, the bankruptcy trustee, has recovered only $1.4 million through the sales of Durham’s elaborate automobile and art collection. The trustee had hoped to recover on many homes and real estate mortgages that secured insider loans, but learned early on that Durham did not protect the company’s interests in those properties, which allowed other mortgages to be filed.
Bash has had some success with at least one target of the lawsuits. He is now pursuing others who received insider loans from Fair Finance—including Carmel businessman Dan Laikin who was among the largest recipients that “utterly looted” the business. Laikin owes more than $19 million and while Bash may win, collecting on the debt is another matter.
“It’s difficult, if not impossible, to predict what recoveries will be,” said Burgan, an attorney for Bash. “The money was squandered on things we can’t recover, like trips and gambling.”