Posted on Friday, November 19, 2010
Another 155 employees received pink slips Thursday from the Law Offices of David J. Stern and DJSP Enterprises, which processes home foreclosure cases for the Plantation-based law firm.
The layoffs came as Fannie Mae, which withdrew it business from the Stern firm after becoming one of its biggest clients, announced it had named eight law firms to handle foreclosure cases in Florida.
DJSP and the Stern law firm laid off 155 employees Thursday morning. A DJSP spokesman said the company has no intention of closing.
The layoffs and new law firm appointments came on the heels of an investigation by Florida Attorney General Bill McCollum into consumer and defense lawyer complaints of improper document filings with the courts by four law firms including Stern's. McCollum's office issued broad subpoenas for law firm files several months ago.
Following announcement of the subpoenas, Fannie Mae and Freddie Mac — one of Stern's biggest clients — severed ties with the firm.
The lawyers or firms that will now handle Fannie Mae foreclosures in Florida are: Albertelli Law, Jacksonville; Douglas C. Zahm, St. Petersburg; Kahane & Associates, Plantation; Smith Greenspoon Marder, Fort Lauderdale; the Law Offices of Daniel Consuegra, Tampa; Tripp Scott, Fort Lauderdale; Van Ness Law Firm, Deerfield Beach; and Elizabeth Wellborn of Deerfield Beach.
In the first nine months of 2010 Fannie Mae acquired 25,316 properties through foreclosure in Florida.
DJSP, a public company, was spun off by the Stern law firm in January. The company and the law firm are headquartered in the same Plantation office building and share many workers. Foreclosure attorney David J. Stern heads both businesses.
The latest round of layoffs — which included lawyers and support staff — reduces the total number of workers at the Plantation firm and DJSP to 300. That's down from a year ago, when more than 1,200 employees worked for the two businesses.
"We performed another round of layoffs this morning," said Chris Simmons, director of investor relations and human resources for DJSP Enterprises.
Simmons and Stern's lawyer, Jeffrey Tew of Tew Cardenas in Miami, insist the law firm and the foreclosure processing company are not closing.
"We are not shutting down," Simmons said. "We are working hard to keep the company running."
Local headhunters say they are being inundated with resumes of attorneys from the Stern firm.
DJSP this week announced it had defaulted on a $12 million line of credit with Bank of America and was working with the bank to reach an agreement.
"We are not shutting down. We are working hard to keep the company running." Chris Simmons, director of investor relations, human resources DJSP Enterprises.
Julie Kay and Paola Iuspa-Abbott