LAWFUEL – The Legal Newswire – Former employees of American Home Mortgage Investment Corp are suing the bankrupt company for back wages, Bloombergs report.
The employees say they were terminated without proper warning.
Attorneys filed the suit yesterday on behalf of two former workers. They also asked Judge Christopher Sontchi to certify the case as a class action representing about 4,000 employees.
American Home Mortgage employed about 150 in Fort Wayne.
American Home “never gave plaintiffs the statutorily required 60-days notice of the mass layoff or termination in violation of the WARN Act,” said the complaint filed in U.S. Bankruptcy Court in Wilmington, Del., referring to the federal Worker Adjustment and Retraining Notification Act.
American Home, based in Melville, N.Y., quit lending last week and filed for bankruptcy Aug. 6, blaming its troubles on margin calls from banks that had provided it with the cash necessary to write mortgages. The company specialized in mortgages for people who fall just short of top credit scores.
On Aug. 3, American Home slashed staff to about 1,000 workers from 7,400 at the end of 2006. The employees who remain were asked to stay to help sell the company’s remaining assets and close its more than 550 loan offices in 47 states.
American Home plans to liquidate its assets and use the cash to pay creditors owed more than $100 million.