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As a subscriber you can listen to articles at work, in the car, or while you work out. Subscribe NowFirst Merchants Bank is seeking nearly $1 million from Tim Durham and his companies through a recently filed loan-default lawsuit.
The suit says First Merchants in 2008 provided a $1 million line of credit and a $225,000 loan to Sturgis, Mich.-based Classic Manufacturing Inc., a trailer-maker that Durham’s buyout firm, Indianapolis-based Obsidian Enterprises Inc., bought in 2004.
Classic is in default on the loans, which have an outstanding balance of $826,000, according to the suit filed Dec. 10 in Allen County. The complaint seeks to foreclose on the company’s inventory and other collateral. It also seeks to collect on guarantees provided by Durham, Obsidian and Bristol, Ind.-based United Expressline Inc., another trailer-maker owned by Obsidian.
Attorneys for Durham could not be reached for comment. An attorney for Muncie-based First Merchants declined to comment.
The legal tangle provides further evidence that Durham’s financial challenges extend beyond Fair Finance Co., the Akron, Ohio, firm that federal prosecutors have alleged operated as a Ponzi scheme.
That firm, co-owned by Durham and Jim Cochran, hasn’t reopened since FBI agents swooped in Nov. 24 and seized documents and computer equipment.
Securities records show that Durham, Cochran and related parties have borrowed more than $168 million from the firm since buying it in 2002. An IBJ investigative story in October questioned whether Fair has the financial wherewithal to repay Ohio investors who purchased about $200 million in investment certificates.
Other firms where Durham is a major investor also are struggling. Those include Dallas-based CLST Holdings Inc. and Los Angeles-based National Lampoon Inc. He also is facing a lawsuit over a partly completed restaurant he planned to open in Charlotte, N.C.
Durham oversaw Obsidian and the rest of his business empire from the top floor of the 48-story Chase Tower, the state’s tallest building. But the firms moved out of the space this month, and it is available for lease.
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