American Home Mortgage terminated employees file suit to recover 60 days' pay and benefits

By Caroline Salls

Pittsburgh, Aug. 9 - American Home Mortgage Investment Corp.'s former employees have filed a class action lawsuit seeking 60 days' pay and related benefits in connection with their termination, according to a Wednesday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the filing, American Home allegedly violated the Worker Adjustment and Retraining Notification Act because they did not give the employees at least 60 days advanced notice of their termination.

As a result, the former employees said they are entitled to 60 days' pay and related benefits, including bonuses, accrued holiday pay, accrued vacation, health insurance coverage and 401(k) contributions.

The former employees said their pay and benefit claims should receive administrative expense priority in American Home's Chapter 11 case because some of the period for which they are entitled to be paid occurred after the Chapter 11 filing.

The plaintiffs said they were part of an Aug. 3 mass layoff, and they did not receive the 60 days' written notice that is required under the WARN Act for employees terminated in a mass layoff or plant closure.

The lawsuit class includes 4,000 former American Home employees.

American Home, a Melville, N.Y.-based real estate investment trust focused on residential mortgage loans, filed for bankruptcy on Aug. 6. Its Chapter 11 case number is 07-11047.

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