Fair Finance Co.’s bankruptcy trustee has reached a $371,000 settlement with Stephen Plopper, an Indianapolis attorney accused of defaulting on a 2003 loan from the Tim Durham-owned business.
Trustee Brian Bash sued Plopper and his wife, Linda, in February, saying the couple failed to pay off a $250,000 loan that matured in 2006. Accrued interest pushed the amount owed past $370,000, according to the lawsuit.
Rather than contest the suit, the Ploppers agreed to pay the full amount owed, a filing in U.S. Bankruptcy Court for the Northern District of Ohio shows. The deal represents a rare victory for Bash, who has struggled to recover money for the more than 5,200 Ohio investors who purchased unsecured investment certificates from Fair. The investors are owed more than $230 million.
Money collected so far will help cover the cost of Bash’s legal effort.
In a recent posting on the Fair Finance trustee’s website, Bash wrote: “I cannot be certain there will be any recovery, and I would be very surprised if the recovery approached twenty-five percent.”
Stephen Plopper served as secretary of Fair Holdings, parent of the Akron-based finance firm. He formerly operated his law practice out of the top floor of the Chase Tower in downtown Indianapolis, sharing space with Durham.
Plopper is among more than a dozen Durham associates who received loans from Fair after Durham and fellow Indianapolis businessman Jim Cochran bought the business in 2002.
In January, the trustee sued Durham's sister, Dana Osler, and her husband, Jeffrey Osler, charging they defaulted on a company loan and now owe $1.2 million. Jeffrey Osler served as executive vice president and a board member of Obsidian Enterprises Inc., Durham’s Indianapolis-based buyout company.
A federal grand jury this month indicted Durham, Cochran and Fair’s chief financial officer, Rick Snow, on 12 felony counts. The indictment alleges the trio worked together to devise and execute a scheme to defraud purchasers of Fair’s investment certificates.
Authorities say company executives doled out related-party loans with abandon, stripping Fair of its ability to repay investors.
Attorneys for the defendants have denied wrongdoing or have declined to comment.
More coverage of the Fair Finance fraud investigation can be found here.
This story originally ran in the March 31, 2011, IBJ Daily.