The 40-year old firm was believed to be handling some 60,000 mortgage foreclosure cases from numerous offices across the US when it shut down suddenly last month. Some of the 700 staff - who were told that there was insufficient money to pay them at the end of the week - subsequently brought a class action complaint.
Staff allegations
The complaint has now been amended to include ex CEO of the firm, Bob Hosch, as an individual defendant. Under the claim, brought under the Worker Adjustment and Retraining Notification Act, the staff allege that Mr Hosch and the firm created over $7m in 'receivables through false invoices that were never delivered to clients'.
Over-expansion in Atlanta
Mr Hosch blamed the firm's problems on over-expansion. Particularly difficult was the purchase of default assets of a firm in Atlanta in February in the expectation of getting a new revenue stream. However, the firm appears to have underestimated the costs involved in making the Atlanta acquisition work. Source: Daily Business Review
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