A U.S. District Court judge in Cleveland has dismissed significant parts of a major lawsuit seeking to recover more than $1 billion in damages for thousands of Fair Finance Co. fraud victims. Fair FinanceTrustee Brian Bash's lawsuit seeking as much as $950 million from Textron Financial Corp. in actual and treble damages was thrown out by Judge Patricia Gaughan. Textron Financial had provided $22 million in financing to Fair's Indianapolis-based owners when they bought the now-bankrupt Akron business in early 2002. As part of the same decision on November 09, 2012, Gaughan allowed most of Bash's complaint against another significant Fair Finance lender, Fortress Credit Corp. But she ruled that the Fair Finance bankruptcy estate is not entitled to treble damages from Fortress. Bash had been seeking as much as $223 million in treble damages from Fortress, which provided millions of dollars in financing to Fair after Textron stopped loaning money to the business. The court's ruling could mean that Fair Finance's victims will not recover all of their losses in the nearly three-year-old case. No money recovered to date has been distributed to the investors. Bash filed the lawsuits against Textron and Fortress early of 2012. Bash filed numerous other lawsuits seeking money from others, including former Fair Finance owner Don Fair, whose father started the business in the 1930s. Both Bash and U.S. Bankruptcy Judge Marilyn Shea-Stonum had recommended to Gaughan that she deny Textron's and Fortress's motions to dismiss the lawsuit. Bash's lawsuit had argued in part that the financing provided by Textron and Fortress allowed Fair Finance co-owners Timothy Durham and James Cochran to perpetuate a Ponzi scheme that defrauded about 5,300 people, mostly in Northeast Ohio, out of about $215 million through a complicated web of insider loans. The investors, many of them elderly, had purchased high interest-rate paying but uninsured investment certificates from Fair Finance. Prior to the 2002 sale, the certificates provided capital to family-owned Fair's long-time business of providing consumer loans and buying other business's accounts receivables.

Textron Financial Corp. announced unaudited consolidated earnings results for the third quarter and nine months ended September 30, 2012. For the quarter, the company reported total revenues of $57 million against $28 million a year ago. Income before income taxes was $25 million against loss before income taxes of $25 million a year ago. Net income was $13 million against net loss of $19 million a year ago. For the nine months, the company reported total revenues of $162 million against $78 million a year ago. Income before income taxes was $60 million against loss before income taxes of $104 million a year ago. Net income was $40 million against net loss of $73 million a year ago. Net cash used in operating activities was $56 million against net cash provided by operating activities of $18 million a year ago.

Textron Financial Corp. reported unaudited consolidated earnings results for the second quarter and six months ended June 30, 2012. For the quarter, the company reported total revenues of $49 million against $28 million a year ago. Income before income taxes was $25 million against loss before income taxes of $36 million a year ago. Net income was $18 million against net loss of $23 million a year ago. For the six months, the company reported total revenues of $105 million against $50 million a year ago. Income before income taxes was $35 million against loss before income taxes of $79 million a year ago. Net income was $27 million against net loss of $54 million a year ago. Net cash used in operating activities of $103 million against net cash provided by operating activities of $24 million a year ago.