Form 8-K for DJSP ENTERPRISES, INC.

Notice of Delisting or Failure to Satisfy a Continued Listing Rule or Stan

This according to an 8K filing on 3/7/2011:

DJSP Enterprises, Inc.’s (the “Company’s”) primary customer, the Law Offices of David J. Stern, P.A., has announced that it will be ceasing the practice of law with respect to all pending foreclosure matters in the State of Florida as of March 31, 2011.  As a result, the Company does not expect to receive any further file referrals from this customer.

According to a SEC filing form 8K on February 15, 2011, the Company’s subsidiary, DJS Processing, LLC, informed affected employees of an immediate reduction in its total work force by 90 employees.

A few days after on February 18, 2011, the Florida SunSentinel broke news that David J. Stern is unloading his Hillsboro Beach Estate up for sale along with perhaps his mega yacht called  ‘MisUnderstood”.

from the Sentinel:

What is reported to be Stern’s 130-foot yacht, Misunderstood, is listed for sale for $18 million at The Yacht & Brokerage Show on Miami Beach. The side-by-side properties on Hillsboro Beach are listed for a total of nearly $20 million. And a vacation chalet outside the ski-resort town of Vail, Colo., has been for sale for $6.9 million since last year.

By MICHELLE CONLIN – Feb 6, 2011 7:29 PM ET
By The Associated Press

FORT LAUDERDALE, Fla. (AP) — During the housing crash, it was good to be a foreclosure king. David Stern was Florida’s top foreclosure lawyer, and he lived like an oil sheik. He piled up a collection of trophy properties, glided through town in a fleet of six-figure sports cars and, with his bombshell wife, partied on an ocean cruiser the size of a small hotel.

When homeowners fell behind on their mortgages, the banks flocked to “foreclosure mills” like Stern’s to push foreclosures through the courts on their behalf. To his megabank clients — Bank of America, Goldman Sachs, GMAC, Citibank and Wells Fargo — Stern was the ultimate Repo Man.

At industry gatherings, Stern bragged in his boyish voice of taking mortgages from the “cradle to the grave.” Of the federal government’s disastrous homeowner relief plan, which was supposed to keep people from getting evicted, he quipped: “Fortunately, it’s failing.”

The worse things got for homeowners, the better they got for Stern.

That is, until last fall, when the nation’s foreclosure machine blew apart and Stern’s gilded world came undone. Within a few months, Stern went from being the subject of a gushing magazine profile to being the subject of a Florida investigation, class-action lawsuits and blogger Schadenfreude that, at last long, the “foreclosure king” was dead.

“What Stern represents is an industry that was completely unrestrained, unchecked, unpunished and unsupervised,” says Florida defense attorney Matt Weidner. “This was business gone wild.”

The rise and fall of Stern, now 50, provides an inside look at how the foreclosure industry worked in the last decade — and how it fell apart. It also shows how banks, together with their law firms, built a quick-and-dirty foreclosure machine that was designed to take as many houses as fast as possible.

Bet on Foreclosure Boom Turns Sour for Investors

By JULIE CRESWELL and BARRY MEIER
Published: February 1, 2011

David J. Stern may be the best-known beneficiary of the foreclosure boom, having made millions in recent years from evictions processed by his law firm, the largest of its kind in Florida. But when he took part of his firm public early last year, he had plenty of help from a constellation of investors also looking to cash in on people losing their homes.

Early in 2010, the back-office processing operations of Mr. Stern’s law firm were converted into a publicly traded company called DJSP Enterprises. Mr. Stern pocketed nearly $60 million from that transaction, public filings show.

Behind that big-money deal was a curious cast of characters, including some with previous run-ins with regulators. Other parties included a small Wall Street investment bank headed by a former presidential candidate, the retired Gen. Wesley K. Clark, and a little-known private equity firm based in New York.

Even before the DJSP windfall, Mr. Stern enjoyed a lifestyle that featured grand mansions, flashy sports cars and a yacht called Misunderstood. But the days of easy money are over for Mr. Stern, his law firm and DJSP investors.

Excerpts:

COUNT I

Alter Ego – Piercing the Corporate Veil of DJSP BVI

99. The Plaintiffs, on behalf of themselves and other persons similarly situated, repeat and reallege
the allegations of the preceding paragraphs as if fully restated herein.

100. As alleged above, at all relevant times herein, DJSP BVI, by its complete exercise of
dominion and control, is the alter ego of DJSP FL, DAL Group and its operating subsidiaries
DJS Processing, Professional Title, and Default Servicing, which constitute a single employer.
Indeed, as set forth above, there is a high interdependency of operations; there is commonality
between management, directors and officers; there is a consolidation of financial, strategic, legal
and human resources operations; and, at all relevant times, DJSP BVI has used and continued to
use DAL Group and its operating subsidiaries and the assets of these entities for its own
purposes.

COUNT II

Alter Ego – Stern

103. The Plaintiffs, on behalf of themselves and other persons similarly situated, repeat and reallege
the allegations in paragraphs one through eighty-five (1-85) as if fully restated herein.

104. As alleged above, at all relevant times herein Stern, by his complete exercise of dominion
and control over said entities, is the alter ego of DJSPA, DJSP BVI, DJSP FL, DAL Group and
its operating subsidiaries DJS Processing, Professional Title, and Default Servicing. The
foregoing entities combine to constitute a single employer, all under the direction and control of
Stern personally. Indeed, as set forth above, there is a high interdependency of operations; there
is commonality between management, directors and officers; there is a consolidation of financial,
strategic, legal and human resources operations; and, at all relevant times, Stern has used and
continued to use DJSPA, DJSP BVI, DJSP FL, DAL Group and its operating subsidiaries and the
assets of these entities for his own purposes.

Continue reading below…

Scribd

By Christine Stapleton Palm Beach Post Staff Writer
Updated: 9:17 p.m. Wednesday, Dec. 29, 2010
Posted: 6:06 p.m. Wednesday, Dec. 29, 2010

As many as 2,000 homeowners suing the law firm of self-proclaimed foreclosure king David J. Stern over excessive attorney fees and costs won a major victory today when an appeals court blessed the group’s class-action status.

“We are very excited,” said Louis M. Silber, the West Palm Beach attorney who filed the case in January 2007 — the first class-action lawsuit filed against Stern and his Plantation-based law firm stemming from foreclosure fraud accusations.

In a four-page opinion, the 4th District Court of Appeal upheld the findings of Circuit Judge Thomas H. Barkdull,, who decided the complaints and circumstances of the homeowners were so similar that they would best be handled in a class-action lawsuit.

Members of the class are homeowners who received letters from Stern’s firm between Jan. 18, 2003 and Feb. 19 2009 offering to reinstate their loans with Wells Fargo by paying reinstatement charges.

Among the excessive reinstatement fees and costs described in the lawsuit:

DISTRICT COURT OF APPEAL OF THE STATE OF FLORIDA
FOURTH DISTRICT
July Term 2010

LAW OFFICES OF DAVID J. STERN, P.A. and DAVID J. STERN,
individually,
Appellants,

v.

LOREN BANNER and WELLS FARGO BANK, N.A.,
Appellees.

CASE No. 4D09-3928

[ December 29, 2010 ]

Excerpt:

Using that standard, we find no abuse of discretion in the trial court’s decision to certify the class in this case and
affirm the certification order.

Scribd

Paperwork error complicates home sale, raises questions about process

By Diane C. Lade and Doreen Hemlock, Sun Sentinel
5:00 p.m. EST, December 4, 2010

Real estate investor Marjorie Oster was pleased when she snagged what looked like a good deal through a Miami-Dade County foreclosure court auction: a four-bedroom house in Cutler Bay, with a swimming pool, for about $95,000.

But when her husband drove by the next day to check on the property, he saw “someone cleaning the pool, a lawn service cutting the grass and a note it was being tented for termites,” said Oster, a Miami resident who has been in real estate for 15 years.

It turns out the house she thought she had purchased had been sold in a short sale the week before to someone else — Osberto Jimenez, a 40-year-old Cuban-born truck driver. The law firm handling the foreclosure for the lender mishandled the paperwork and never canceled the auction sale.

“So we both own the same house and I’m frustrated as hell,” said Oster. “Someone screwed up.”

DJSP1-main

Scribd

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF FLORIDA

RENAE MOWAT, NIKKI MACK,
ARKLYNN RAHMING, and QUENNA HUMPHREY individually
and on behalf of all other similarly situated individuals,
Plaintiffs,

vs.

DJSP ENTERPRISES, INC., a Florida Corporation, DJSP
ENTERPRISES, INC., a British Virgin Islands Company,
and LAW OFFICES OF DAVID J. STERN, P.A.,
DAVID J. STERN, individually,
Defendants.
______________________________________/

EXCERPT:

CLASS ACTION COMPLAINT

Plaintiffs Renae Mowat, Nikki Mack, Arklynn Rahming, and Quenna Humphrey individually and on behalf of all others similarly situated, for their Complaint against Defendants, DJSP Enterprises, Inc., a Florida corporation, DJSP Enterprises, Inc., a British Virgin Islands Company, (collectively hereinafter referred to as “DJSP”), Law Offices of David J. Stern, P.A., (“Stern, P.A.”) and David J. Stern (“Stern”) state as follows:

NATURE OF CASE

1) Plaintiffs bring this action on behalf of themselves and other similarly situated former employees who worked for the Defendants in Plantation, Florida and who were terminated as a consequence of mass layoffs by the Defendants beginning on September 23, 2010 and who were not provided sixty (60) days advance written notice of the mass layoffs by Defendants as required by the Worker Adjustment and Retraining Notification Act, 29 U.S.C. § 2101 et seq.
(“WARN Act”).

2) Plaintiffs and all similarly situated employees seek to recover back pay for each day of WARN Act violation and benefits under 29 U.S.C. § 2104.

3) This Court has jurisdiction pursuant to 28 U.S.C. §§ 1331, 1334 and 1367, as well as 29 U.S.C. §§ 2102, 2104(a)(5).

4) Venue over this matter is appropriate in this Court pursuant to 29 U.S.C. 2104(a)(5) because the acts constituting the violation of the WARN Act occurred, and the claims arose in this district. Venue is also proper under 28 U.S.C. §1391(a) and (b). The acts complained of occurred in the State of Florida and, at all relevant times, material hereto, the Defendants conducted business with and through the other named Defendants who also conducted business with and through the other Defendants and their subsidiaries and the named individual Defendant, David J. Stern, resides in this judicial district, and all of or a substantial part of the events or omissions giving rise to this action occurred in this judicial district.

Continue below…

DJSP1-main

Scribd

Excerpt from Daily Business Review:

Another 155 employees received pink slips Thursday from the Law Offices of David J. Stern and DJSP Enterprises, which processes home foreclosure cases for the Plantation-based law firm.

The layoffs came as Fannie Mae, which withdrew it business from the Stern firm after becoming one of its biggest clients, announced it had named eight law firms to handle foreclosure cases in Florida.

Here is the POA between FANNIE MAE and DJS 11.7.2008.

Scribd

Testimony of Harold Lewis
Managing Director, CitiMortgage
Before the Committee on Financial Services
Subcommittee on Housing and Community Opportunity
November 18, 2010

Excerpt:

As an additional quality control measure, Citi is currently reviewing approximately 10,000 affidavits that were executed in pending judicial foreclosures initiated prior to February 2010 to assure that these affidavits are substantively correct and properly executed. Citi expects that affidavits executed prior to the fall of 2009 will need to be re-filed.

Separately, Citi is also reviewing approximately 4,000 pending foreclosure affidavits in judicial states that were executed at our Dallas processing center and may not have been signed in the presence of a notary, to assure that these affidavits are substantively correct and properly executed. Citi expects that it will re-file these affidavits.

Lastly, as previously announced, Citi stopped referring new matters to the Florida law firm David Stern in September of 2010 and has since withdrawn all pending matters from that firm. As an added precaution and quality-control measure, Citi is transferring approximately 8,500 pending foreclosure files from the Stern law firm to new counsel. New affidavits for these cases will be prepared and re-filed by new counsel under Citi’s current procedures.

Continue reading…

Scribd