After mass layoffs, foreclosure law firm faces eviction
Posted Jun 17, 2014 12:18 PM CDT
By Debra Cassens Weiss
A foreclosure law firm is facing eviction from its offices in Woburn, Massachusetts, after laying off the majority of its lawyers, paralegals and other staffers.
The firm, Connolly, Geaney, Ablitt & Willard, was housed in a Woburn office building owned by an affiliated entity. The building was foreclosed on and sold at auction in March. The new owners say eviction proceedings seek to oust the law firm from the building for nonpayment of rent. Massachusetts Lawyers Weekly has the investigative report.
Connolly, Geaney, Ablitt & Willard also has offices in Florida and Puerto Rico. It was created through a merger of Ablitt Scofield and Connolly & Geaney, though the date of the merger is unclear.
The first hint of trouble for law firm employees came on Feb. 28, when they did not receive paychecks, the story says. That same day employees received an email saying that the firm’s chief financial officer, Robert Feige, was no longer with the firm. Employees later received handwritten checks, a change from the previous checks generated by a payroll service.
Internal law firm emails indicated that Connolly Geaney’s daily operations were funded by a factoring firm, which supplies cash to companies in exchange for account receivables sold at a discount, the story says. The factoring firm cut the cash supply in February and began an audit of Connolly Geaney.
In May, employees were notified that Blue Cross Blue Shield of Massachusetts was canceling their health insurance for nonpayment of premiums. One paralegal told Massachusetts Lawyers Weekly that the firm had had deducted premiums from his check even though it wasn’t paying premiums.
An internal email referred to “a rash of bounced checks that occurred due to Durham’s temporary shutdown of funding and to an unapproved business practice implemented by the former CFO.” The email was sent by Steven Ablitt, who told Massachusetts Lawyers Weekly there was no truth to the rumors that the firm is closing. In later interviews, he distanced himself from the firm and said he was merely a consultant.
Partner Kevin Geaney told Massachusetts Lawyers Weekly that the firm “is presently growing and is clearly moving in a positive direction for the future.” He attributed check problems to a switch in banks and blamed the failure to pay insurance premiums on Feige.
Meanwhile, a whistleblower suit is pending against the firm's predecessor, Ablitt Scofield, the story says. A former managing partner of the firm’s Florida office alleges she was fired for complaining about unpaid bonuses or “and/or for her refusal to change documents that were previously sworn.” Connolly Geaney says the claims are without merit.