Mortgage Industry Trends

File this under 'Hidden Casualties of the subprime collapse'. Portellus was a technolgoy vendor that entered the market as a provider of business rules and decisioning technology. The founder, John Le, had previously launched Loan Trader during the dot-com. I'm not completely familiar with what happened to loan trader, and how it ended. I seem to recall they merged with Ultraprise.

But, needless to say, John has now had the unfortunate experience to preside over a second market casualty. And evidently, he did not follow the rules:

According to the class action law suit that was filed Oct 3, 2007 in the Superior Court of California for Orange County, it is alleged that Portellus failed to pay wages and employment related expenses due employees. Further, that there were "systemic illegal employment practices" which "resulted in violations of the California Labor Code and Business and Professions Code against employees."

Further, the suit alleges that Le is being personally targetted as they, the plaintiffs, believe he is the sole shareholder, and thus, it would be "both inequitable and a gross miscarriage of justice to permit the corporate veil to remain in place over said corporation, and that Le should be held personally liable for all acts alleged...as against Portellus."

Evidently, Portellus failed to pay owed wages within 72 hours of letting employees go, as well as failing to reimburse employees for expenses paid out of pocket in the course of their employment. And, there was a violation for not providing advance notice as there were in excess of 50 employees let go.

Ooops! I suppose the lessons here are if you know your company is going down, act before its too late. Waiting doesn't buy time or hope, simply delays the inevitable and creates more problems.