Robert Hosch, the former managing partner and chief executive officer of mortgage banking industry law firm Butler & Hosch, which abruptly closed in 2015 amid allegations of mismanagement, is resigning from the Florida Bar Association.
In a statement provided to HousingWire, Hosch said that resigning from the Florida Bar is “not an admission of guilt,” adding that this move will allow him to “focus on new opportunities.”
The move is the latest in a spectacular fall from grace for Hosch, who once lead a firm that bore his name and had more than 700 employees, all of whom were laid off when the firm closed in 2015.
In 2015, Butler & Hosch filed an Assignment for the Benefit of Creditors in the state of Florida, an action similar to Chapter 7 bankruptcy.
In the wake of that filing, several former high-level employees at Butler & Hosch filed a class-action lawsuit against Hosch, alleging that Hosch created false billing and invoices to mask the firm’s financial distress.
But that lawsuit was subsequently tossed out by a federal judge, stating that it was inappropriate to attempt to impose liability on Hosch for violating the Worker Adjustment and Retraining Notification Act by failing to give proper notice to employees before enacting layoffs because the WARN Act only applies to business enterprises, a term which does not include individuals.
But that lawsuit wasn’t the only one that accused Hosch of impropriety.
Later in 2015, HousingWire reported that fellow mortgage banking industry law firm Morris Schneider Wittstadt filed for Chapter 11 bankruptcy.
In Morris Schneider Wittstadt’s bankruptcy filing, the Atlanta-based law firm detailed its agreement to sell its default assets to Butler & Hosch in January 2015.
In the bankruptcy filing, Morris Schneider Wittstadt’s managing partner, Mark Wittstadt, said that it agreed to sell its foreclosure, bankruptcy and eviction operations to Butler & Hosch, including the assumption of MSW’s lease obligations, in exchange for an unsecured promissory note of $2,072,167.24.
But, soon after the agreement was finalized, Wittstadt said that he learned of serious issues at B&H.
“Unfortunately, almost immediately after the agreement was signed, but before the transition period had ended, I learned that B&H had created false invoices for reviewing each file to be transitioned from MSW to B&H, which B&H surreptitiously used for the purposes of factoring through its secured lender to obtain loans,” Wittstadt told the court in the bankruptcy filing.
In a statement provided to HousingWire after those allegations surfaced, Hosch said that he is innocent of all these allegations.
In Hosch’s statement, his lawyer, Michael Tessitore of Moran Kidd Lyons and Johnson PA, reiterates the charges against Hosch and Hosch’s denial of said charges.
“Hosch was accused of shutting down his firm and abandoning his clients; however, he maintains that he is innocent of these allegations,” the statement reads. “He explains that while Butler & Hosch was experiencing substantial growth, unforeseen problems created by third parties caused the firm to cease operations.”
Hosch previously said that while Butler & Hosch was experiencing “substantial growth,” the firm had problems with integrating the default assets from MSW, as well as miscalculations from the bank and a flawed funding formula.
All of those factors came together to cause the sudden collapse of the firm, Hosch said.
As for resigning from the Florida Bar, Hosch says: “Resigning from the Florida Bar is not an admission of guilt. An expensive proceeding relating to my Florida Bar membership makes no sense for anyone. I’m now focused on new opportunities and want to conserve my resources to pursue them.”
Tessitore adds that he is “happy to assist Bob get in getting this chapter behind him and look forward to helping him with new business opportunities.”
The release detailing Hosch’s resignation from the Florida Bar lists Hosch as an “expert in the fields of commercial litigation, foreclosure, title insurance defense and surrounding areas of litigation,” and states that “in the wake of the failing of Butler & Hosch and the affiliated companies, Mr. Hosch has now made it his mission to figure out why law firms in the business are failing, and what the industry can do to fix it.”