Another Wage and Hour Case in Bankruptcy Court

Early casualties in the mortgage loan catastrophe, Delta Financial and three of its subsidiaries filed for Chapter 11 bankruptcy protection. Now former loan officers of Fidelity Mortgage Inc. sued Delta Financial, the parent company of Fidelity Mortgage Inc., for alleged overtime violations under the FLSA and state laws. The same allegations were previously made against Fidelity and Delta prior to the bankruptcy filing, one filed in the U.S. District Court for the Western District of Pennsylvania in November 2004 and the other filed in the U.S. District Court for the Eastern District of New York in August 2007. The new complaint is intended to include employees eligible to participate in either of the prior suits, as well as others who joined neither suit. The allegations follow past cases in alleging intentional misclassification to avoid overtime pay of its loan officers. Once again, we will have a chance to follow whether wage and hour suits can survive a filing for bankruptcy.

Click here for the complaint filed against Delta Financial.