News & Events

News & Events

8.28.2007

To WARN or Not to WARN? That is the Question for Companies in the Troubled Subprime Mortgage Industry

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A lawsuit filed last week against subprime lender Aegis Mortgage Corp. alleges that the company laid off hundreds of employees without giving them adequate notice. The class action lawsuit has been brought in U.S. Bankruptcy Court for the District of Delaware by a group of former employees against Aegis Mortgage Corporation, Aegis Wholesale Corporation and Cerebrus Capital Management. The complaint alleges violations of the federal Worker Adjustment and Retraining Notification Act (“WARN Act”), 29 U.S.C. §§ 2101–2109. It alleges that Aegis and Cerebrus (who, the plaintiffs claim, comprise a single employer under the Act) laid off approximately 400 workers just prior to filing for Chapter 11 bankruptcy protection on August 13, 2007. The class representatives assert that they are owed back pay and fringe benefits. View full article (PDF).