The national foreclosure law firm Butler & Hosch has shuttered its operations after rapid growth through acquisitions tapped out its cash reserves.
The Dallas-based law firm was actively prosecuting up to 60,000 foreclosure files and employed around 700 attorneys, paralegals and back-office staff prior to its closure. The company filed an Assignment for the Benefit of Creditors, similar to a Chapter 7 bankruptcy, in Florida State Court, according to a May 14 memo to employees from CEO Bob Hosch.
Hosch noted in the memo that the company did not have enough money on hand to pay its employees, saying that he had no choice but to shut down the company's operations without additional help from BH's existing lender or strategic partners.
In the midst of BH's closure, Hosch said he chose to step down, with leadership of the company being passed to a third-party fiduciary, Michael Moecker. Recently, the law firm had been working with outside counsel, Roy Korbet, and his team at the Florida law firm GrayRobinson, to avoid closing its doors.
"After exhausting all plausible remedies, including efforts to solicit additional funding from our existing lender and new strategic partners, we were left with no other alternatives than to engage Mr. Moecker," Hosch said in the memo.
Hosch attributed the firm's lack of funds to its fast, acquisition-fueled growth that started in 2013. That year, the company purchased Cal-Western Reconveyance, a major trustee company, in the wake of the Chapter 11 bankruptcy of Prommis Solutions.
Since then the company had also bought Regional Trustee Services Corp. in Seattle in 2014. Just this February, BH bought default assets from Atlanta-based law firm Morris Schneider Wittstadt. Following the acquisition spree, the company spread its footprint to 27 states and the District of Columbia.
BH was founded in Florida in 1972 and began focusing on residential mortgage lenders and servicers only in 1997.
