A case brought against defunct reverse mortgage lender Live Well Financial by a cohort of its former employees has been preliminarily approved for a seven-figure settlement. The award will cover lost wages and benefits for 60 days under the Worker Adjustment and Retraining Notification (WARN) Act, according to court documents reviewed by RMD.
Monica Williams, a former loan account manager in Live Well’s Richmond, Virginia, headquarters, initially filed the suit in May 2019, just days after Live Well had halted funding for new loans and subsequently ceased operations entirely.
Williams filed the class-action lawsuit in the U.S. District Court of Delaware seeking 60 days of wages and benefits, alleging termination without cause and notice as required by law. She brought the suit on behalf of herself and other former Live Well employees in similar circumstances who were terminated “without cause, as part of, or as the result of, mass layoffs or plant closings ordered by [Live Well] on or about May 3, 2019,” the initial court complaint said.
The case has dragged on ever since, prolonged by the ongoing civil and criminal cases against Live Well’s former leaders playing out in court. Last year, former Live Well CEO Michael Hild was found guilty of perpetrating a bond fraud scheme that artificially inflated the value of the company’s bonds to induce creditors to lend it more money.
Hild was subsequently sentenced to 44 months in prison, but is trying to get his conviction overturned or a new trial. Hild was recently denied a new trial, but remains free pending an appeal with the Second Circuit Court of Appeals.
Hild’s counsel filed a court notice with the Second Circuit to consolidate the currently pending appeal with a new appeal against the denial of a new trial. Hild’s named co-conspirators cooperated with federal authorities and were sentenced to time served, allowing them to avoid prison time.
Meanwhile, Williams’ class action case continued.
Attorneys for Williams and the certified class are seeking $1.1 million, saying the figure “provides for payment more than sixty-six (66) percent of the maximum priority WARN damages and eliminates any further accrual of litigation expenses in prosecuting the action against [Live Well], including trial and possible appeals.”
The settlement would cap the payment at $13,650 per employee, which includes all counsel fees and expenses, according to court documents. That makes the class consist of roughly 81 people, down from an estimated 125 when the suit was filed in 2019.
Presiding Bankruptcy Judge Laurie Selber Silverstein found that the settlement is “reasonable and cost-effective” when weighed against the “cost, delay and uncertainty associated with further litigation.” She preliminarily approved the settlement pending the outcome of a fairness hearing scheduled for Jan. 18, 2024.
At that point, the judge will decide whether or not to give the settlement final approval.