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Former worker sues Delta Financial

New York Newsday - Mark Harrington
Published: December 14, 2007

A former employee of shuttered Delta Financial Corp., the Woodbury-based sub-prime lender heading to bankruptcy court, filed a lawsuit on behalf of herself and fired co-workers this week, charging the company had failed to provide proper advance notice of layoffs since August.

Laura Bressmer, who formerly worked in the Woodbury headquarters, filed the class-action suit in federal court in Central Islip on Wednesday, charging Delta did not provide federally mandated 60-days notice for layoffs that took place on Aug. 22 and Nov. 8, the suit says.

"We have a good basis to believe the layoffs met the requirement of the WARN Act" for notice, said Jack Raisner, an attorney for Bressmer at the firm Outten & Golden in Manhattan, referring to the Worker Adjustment and Retraining Notification Act. He said employees released in the final layoff on Dec. 6 also could be eligible to join the suit.

The suit says Delta failed to pay Bressmer and other employees salary, commissions, bonuses, and accrued holiday and vacation pay for the mandated 60 calendar days after their firings. Delta also failed to make 401(k) contributions and provide health benefits for the 60 days, according to the suit.

Bressmer's suit says employees of Delta Financial and its subsidiaries, Delta Funding Corp. and Fidelity Mortgage, were covered by the WARN act. Delta hasn't said how many employees were affected by its shutdown, and the lawsuit doesn't specify a number. Raisner said it will be determined during discovery in the case.

* * *

Delta, once considered the ninth-largest U.S. sub-prime lender, said last week it would soon file for bankruptcy protection after failed attempts to secure new financing. Though Delta said it "does not believe that it will be able to continue as a going concern," and intends to move forward as a "debtor in possession" under bankruptcy protection. It has ceased taking new loan applications, but said it was continuing discussions to find a buyer for assets and operations.

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