National Foreclosure Law Firm Ceases Operations
May 26, 2015
The foreclosure law firm Butler & Hosch (BH) announced in an internal memo from its chief executive officer that the company has ceased operations after filing an Assignment for the Benefit of Creditors, similar to a Chapter 7 bankruptcy, in Florida State Court.
“Our industry has experienced seismic consolidations following the Great Recession,” Bob Hosch, BH’s chief executive office wrote in the May 14 memo. “BH saw great opportunity to acquire competitors and take advantage of economies of scale to build our platform. Unfortunately, BH grew too fast and could not merge processes from the acquired entities quickly enough to meet our economic forecasts which resulted in short term cash crunches and our ability to attract new capital in the interim.”
Control of the company's financial operations was handed to Michael Moecker, a third-party fiduciary.
Founded in Florida in 1972, BH decided to grow its footprint through acquisition. In 2013, the law firm acquired Cal-Western Reconveyance in Arizona, California, Idaho, Nevada, Oregon, Texas, Utah, Washington, as well as RTS Pacific in Alaska, Arizona, California, Idaho, Montana, Nevada, Oregon and Washington. In 2014, BH acquired Seattle-based Regional Trustee Services Corp. and in February purchased default assets from Atlanta-based law firm Morris Schneider Wittstadt. Following the acquisition spree, the company spread its footprint to 27 states and the District of Columbia.
“The challenge was to integrate the merger of equals while spurring growth in a declining market environment in our industry,” Hosch said in the memo. “BH failed to meet this challenge and I too share in that failure.”
Following the last purchase, BH was actively prosecuting up to 60,000 foreclosure files, employed nearly 700 attorneys, paralegals and back office staff, and had access to 90 percent of the foreclosure industry in the United States.
A lawsuit filed by two former BH employees accuses the law firm of failing to abide by the Worker Adjustment and Retraining Notification Act. The act requires most companies with 100 or more employees to warn of mass layoffs 60 days in advance. The lawsuit seeks class-action status on behalf of all the former employees.
According to the Orlando Sentinel, the law firm’s collapse has already caused delays in foreclosure sales in Florida.
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