“Durham fired auditors who became too squeamish and operated [Fair] as a Ponzi scheme, enabling him to loot every last penny,” according to the sharply worded 49-page lawsuit filed in U.S. Bankruptcy Court in Akron.
By the time Durham and fellow Indianapolis businessman Jim Cochran bought Fair in 2002, his Indianapolis-based buyout firm—Obsidian Enterprises Inc.—already was effectively bankrupt, the suit says.
Trustee Brian Bash alleges in the suit that Durham bought Fair to fund Obsidian’s failing businesses—a collection of transportation and manufacturing firms—and to provide cash for other personal investments.
When Durham’s and Cochran’s purchase of Fair closed, Durham remarked that “this will be like taking candy from a baby,” the suit says.
An attorney for Durham was not immediately available to comment on the lawsuit.
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