Business of Law
Baum Foreclosure Firm to Close After Fannie and Freddie Pull Files, Plans Mass Layoffs
Posted Nov 21, 2011 12:40 PM CST
By Martha Neil
Bad judgment about Halloween costumes worn last year by some employees of the Steven J. Baum law firm has come back to haunt New York's largest mortgage foreclosure practice.
After recent news reports that Fannie Mae and Freddie Mac (as well as some major loan servicers) have pulled their business in the aftermath of the costume controversy, the Baum firm has now announced that it is closing, Bloomberg reports.
Mass layoffs are expected. A notice filed by the firm with the New York State Department of Labor says jobs will be cut within 30 days, WIVB reports.
In addition to the problematic costumes, which were criticized as poking fun at individuals losing their homes, the firm last month agreed to pay $2 million to resolve a probe of its foreclosure practices.
Based in Amherst, N.Y., the firm has a total of about 90 employees there and in another office on Long Island.
"Disrupting the livelihoods of so many dedicated and hardworking people is extremely painful, but the loss of so much business left us no choice but to file these notices,” founding partner Steven J. Baum said in a written statement.
Large employers are required to give advance notice of pending layoffs under the federal WARN Act, as summarized by the U.S. Department of Labor.
It's not clear that the federal law applies to the law firm. However, under New York state's WARN law, an employer with 50 or more employees is required to provide advance notice of layoffs, according to a Paul Hastings newsletter article sent to clients in 2008.
ABAJournal.com: "NY Foreclosure Law Firm Settles with Feds for $2M; Deal Creates ‘Howls of Protest’"
ABAJournal.com: "Halloween Party Costumes Come Back to Haunt Foreclosure Law Firm"
ABAJournal.com: "Law Firm that Apologized for Costumes Is Barred from Freddie and Fannie Foreclosure Work"