Giant Foreclosure Law Firm Collapses

(CN) - Nearly 700 attorneys and staff members and thousands of clients are dealing with the abrupt closure of Butler & Hosch, one of the nation's largest foreclosure law firms.

The Dallas-based law firm filed an Assignment for the Benefit of Creditors last week in Florida, similar to a Chapter 7 filing, and its CEO Bob Hosch resigned.

It was handling about 60,000 foreclosures when it closed, according to industry watchdogs and newspaper reports.

In a May 14 memo to his staff, Hosch wrote that the firm did not have the money to pay salaries, and he had no choice but to close it. Michael Moecker & Associates, of Hollywood, Fla., have been appointed fiduciary for the firm.

National Mortgage News attributed the closure to the firm's "acquisition-fueled growth that started in 2013."

The company bought Cal-Western Reconveyance in 2013, bought Seattle-based Regional Trustee Services Corp. in 2014, and bought the assets of Atlanta-based law firm Morris Schneifer Wittstadt in February.

The Tampa Bay Times reported this week that Hosch told employees in his May 14 memo that the company "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." As a result, he wrote, Butler & Hosch "cannot continue to function."

The firm's attorneys failed to appear in at least three court hearings Monday, according to the South Florida Daily Business Review.

Butler & Hosch, founded in Florida in 1972, began focusing on foreclosures in 1997.

Subscribe to Closing Arguments

Sign up for new weekly newsletter Closing Arguments to get the latest about ongoing trials, major litigation and hot cases and rulings in courthouses around the U.S. and the world.

Email *

Submit