Chapter 7 - Solutions for a Financial Crisis » Chapter 7 Bankruptcy

After an FBI investigation and rumors of running a Ponzi scheme, investors asked a judge to push an Ohio investment firm into Chapter 7 bankruptcy in an effort to save their money.

Fair Financial and Fair Finance closed their doors last November after an FBI raid seized their computers. The company has remained closed, but investors and customers aren’t standing by idly hoping to get their money back.

Lawyers representing close to 100 investors who purchased $6 million in certificates from the company have asked a judge to place the Fair Finance in Chapter 7 bankruptcy, according to a report by the AP.

An involuntary Chapter 7 would put the company under the control of a court trustee. The lawyers claim the current business owners, who purchased the company in 2002, can’t be trusted to run it in a responsible manner.

According to the lawsuit, Fair Finance’s owners have been loaned about $176 million. In addition, they sold certificates and investments to Ohio residents across the state. Those certificates are coming due soon, and the lawsuit claims that Ohioans could stand to lose millions of dollars.

Some have accused the company, which also has a headquarters in Indiana, of running a Ponzi scheme. The FBI, meanwhile, returned the confiscated computers to Fair Finance, although the company has not officially reopened. That didn’t stop them from sending out 1099 tax forms outlining investment earnings to some of their customers.

But the question of whether those investors will ever get a return remains to be seen.