DJSP Enterprises hires CEO; fires 157 more employees
DJSP Enterprises (DJSP), the publicly traded arm of the Law Offices of David J. Stern, hired a new CEO over the weekend and terminated more than 150 employees, the company said in a new regulatory filing. DJSP provides foreclosure processing services to Stern's law practice, which is the public company's only client. The law firm has been hit hard by allegations that it has improperly filed court documents related to foreclosure cases. It is one of four law firms under investigation by Attorney General Bill McCollum. Fannie Mae and Freddie Mac, two of the law firm's key clients, recently pulled all their existing cases from the firm and quit referring new cases. In the Monday filing, DJSP said it has hired Stephen J. Bernstein as chairman of the board, president and CEO. Bernstein had been serving as the company’s interim chairman since Stern's Oct. 18 resignation from that role. Bernstein will also serve in a comparable role at DJSP's principal subsidiaries, DAL Group and DJS Processing. "I am prepared to lead the company through the fundamental changes required for it to adapt to its new operating environment," Bernstein said in a press statement. "With continued strong support from a dedicated core management team and loyal employees, we will continue to work to preserve and grow the value we see in the company." Stern resigned his positions as CEO and president, effective Nov. 19, according to the filing. Stern also stepped down as a member of the board and as an officer and manager of DJSP subsidiaries to focus on his law firm, the filing said. Bernstein was originally appointed to the board on March 2. Prior to that, he managed his own real estate firm, Benchmark Group of Florida, since 2002. His background includes serving as an adviser to private equity companies, investment funds and individual investors. From 1998 to 2002, Bernstein served as a mergers and acquisitions and business development executive for AutoNation and Cisneros Television Group, respectively. DJSP said Bernstein's annual base salary will be $500,000. It will be reviewed by the board’s compensation committee within the next 90 days. The company also reduced its staff by 157 employees. It did not provide any further details on the staff cuts. The company has gone through at least two other staff reductions in recent months. In early November, it laid off 416 employees, pushing reductions at that time to more than 700 layoffs. DJSP provides a wide range of processing services in connection with mortgages and mortgage defaults. In addition to its Plantation, Fla., headquarters, it also has operations in Louisville, Ky., and San Juan, Puerto Rico. It also has a back-office operation in Manila, the Philippines. A subsidiary, DAL Group, has defaulted on a $12 million line of credit from Bank of America (BAC) and warned that it may not be able to continue business operations, according to a document filed Nov. 15 with the Securities and Exchange Commission. Bank of America agreed not to take any action on the line-of-credit default until Nov. 26 while DAL "develops and presents to the bank ongoing operating plans for DAL and its subsidiaries." DJSP also disclosed in the Nov. 15 filing that it didn't make November's rent on its Plantation, Fla., offices and has received a notice of default. The author holds no relevant investments. Write to Kerry Curry.