Law firm specializing in mortgage banking Butler & Hosch, Pennsylvania filed a Assignment for the benefit of creditors to a Florida law firm Michael E. Moecker & Associates, a Chapter 7 bankruptcy-like action.
Butler & Hosch closed their doors this week and laid off all staff. It will not open on Monday.
No one at Butler & Hosch could be reached for comment, but HousingWire obtained a copy of the May 14 memo emailed to employees and suppliers of Bob Hosch, CEO and senior partner at Butler & Hosch, confirming the story :
“It is with great sadness that I inform you all of the difficult financial situation of Butler & Hosch and its subsidiaries. (“BH”) which resulted in the State Court filing Assignments for the Benefit of Creditors (“ABC”). I voluntarily resigned from my position as CEO and Senior Partner of BH. Control of the BH companies has been voluntarily entrusted to an experienced third party fiduciary, Mr. Michael Moecker. “
Significantly, the bankruptcy filing and the events leading up to it appear to have been sudden – the note cites the company’s aggressive growth over the past two years and how there is no longer enough cash to cover the bankruptcy. payroll, according to the note. :
“How does the classification of these ABC files affect you?” While Mr. Moecker has full access to our assets, he won’t have enough cash on hand to fund payroll at the end of this week. Without the employees and lawyers of BH, there is no suite BH cannot continue to function. To be clear, while I continue to hope that our existing lenders and / or strategic partners can provide a cash injection today, without it BH will have no choice but to shut down immediately. “
Butler & Hosch had rapidly expanded its presence across the country in recent years, buying up defaulting assets in a number of markets.
More recently, HousingWire reported that the Atlanta law firm Morris Schneider Wittstadt agreed to sell its defaulting assets to Butler & Hosch. The transfer of the defaulted assets between Morris Schneider Wittstadt and Butler & Hosch was completed at the end of January. Financial terms of the deal were not disclosed.
A series of acquisitions took place for both default assets and small businesses as it sought to expand its presence on the West Coast. In February 2014, the company acquired the Seattle, Washington-based company. Regional Company of Fiduciary Services.
Prior to that, in 2013, the company also acquired Cal-Western Reconveyance LLC, once one of the largest trust companies in the country, after the then parent company Prommis Solutions had filed for Chapter 11 bankruptcy protection earlier in the year.
A full list of HousingWire’s coverage of the company’s history can be found here.
Assignment for the benefit of creditors under Florida law is analogous to Chapter 7 bankruptcy, but does not automatically trigger the liquidation of assets. Under Florida’s deposit protection, the assignee, Moecker & Associates, serves as effective executor and may seek alternatives to immediate liquidation.
“Significantly, one of the powers of the court is to allow the assignee to operate the business of the assignor for limited periods, if it is in the best interests of the estate to do so,” according to Florida bar. “This allows the transferee to sell the business as a going concern, in order to gain more value for creditors, as there is usually a substantial incremental component of ‘going concern’ for a going concern,” even if it is insolvent. “
Michael Moecker & Associates is a Florida-based company specializing in resolving insolvency, bankruptcy and liquidation issues to investors, bank executives, shareholders, creditors and lawyers.