Saturday, December 04, 2010

David J. Stern Update

I blogged about the law firm of David J. Stern being caught falsifying foreclosure documents. Foreclosure judges are more concerned with speeding the process than reviewing the documents. This has allowed for homeowners to be illegally evicted from their homes.

After the story broke, Stern mysteriously fired his employees. Since Stern has one of the largest foreclosure law firms in Florida, the courts have been at a standstill. Former employees of Stern's are now suing. A total of 700 employess are suing.

The lawsuit claims Stern was suppose to give his employees 60 days notice. The WARN Act requires that Stern file that he gave his employees 60 days warning. Stern files termination paperwork, much like foreclosure documentation. The paperwork's dates are fudged.

Stern is the CEO of DJSP Enterprises.

As employees were being let go, DJSP Enterprises filed a WARN notice Nov. 9 saying that 435 people were being terminated between Nov. 4 and Nov. 12.

"They belatedly filed a document that purports to be compliant with the WARN notice [requirement]," said attorney Gary Farmer, who filed the lawsuit along with Dawn Rapoport and Chandra Parker Doucette. Farmer said the notice is "worthless" because employees were not given 60 days' notice ahead of time.

WARN notices are required for any for-profit or non-profit companies with 100 or more employees.

In related news: Stern resigned as CEO of DJSP Enterprises. DJSP is short for David J. Stern Enterprise. The company was a mortgage and real estate processing offshoot for Stern's law firm. Stern's law firm is now being investigated by the Florida Attorney General's office.

DJSP stock is at 47 cents. DJSP and Stern's law firm are folding. Expect Stern to file for bankruptcy to get out of paying claims from the lawsuit.

Update: DJSP defaulted on a $12 million line of credit set up by Bank of America. I am not sure if DJSP owes the entire $12 million or only money set up from the BOA credit account. Money and interest is only paid from money withdrawn from line of credit accounts. I am uncertain if DJSP took out $12 million or the line of credit account held that amount of money.

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