The bankruptcy trustee for Fair Finance Co. has filed a lawsuit against Indianapolis attorney Stephen Plopper and his wife, saying they defaulted on a 2003 loan from the defunct Tim Durham-owned business and now owe $375,000.
The loan to Stephen and Linda Plopper matured in 2006, but the couple has failed to satisfy the debt, despite recent demands for payment, according to the suit filed Friday in U.S. Bankruptcy Court in Akron, Ohio.
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. The Ploppers' home at 1205 E. 126th St. in Carmel serves as collateral on the loan, according to the suit.
Plopper, who could not be reached for comment, 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.
Bankruptcy trustee Brian Bash alleges that insider loans taken out by Durham, Cochran, and their business associates “utterly looted” the business, leaving it unable to repay more than 5,000 Ohio residents who purchased unsecured investment certificates. The company owes the investors more than $200 million.
Last month, 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.
Fair hasn’t reopened since the FBI raided its offices in November 2009. The raid came about a month after an IBJ investigative story highlighted the insider loans and raised questions about whether the firm had the means to repay holders of investment certificates.
The U.S. Attorney’s Office is conducting a criminal investigation of the company’s collapse. Durham has acknowledged that he owes Fair millions but has denied breaking the law. He noted that the offering circulars provided to prospective investors detailed the insider loans and highlighted other risks.
This article originally ran in the Feb. 15 issue of IBJ Daily.