Justice Watch: Berger Singerman Wraps Up Little-Known Bankruptcy

, Daily Business Review

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Paul Singerman
Paul Singerman

Paul Singerman chuckles when people ask him if he misses the incessant work of the high-profile bankruptcy tied to con man Scott Rothstein's defunct Fort Lauderdale law firm.

While Berger Singerman became known in South Florida for tracking down assets for victims of Rothstein's Ponzi scheme at Rothstein Rosenfeldt Adler, it was involved in something much bigger: the bankruptcy of Ocala-based Taylor, Bean & Whitaker Mortgage Corp.

"This is the largest bankruptcy case in the country that no one has ever heard of," Singerman said. "You won't find too many $12.4 billion cases. You will find some, but certainly not in Florida."

Attorney Bruce Rogow, who represented Taylor Bean's founder Lee Farkas, agreed, saying Rothstein's case had sex and drugs, but the mortgage company's $3.5 billion failure was more monumental.

"It's important because of the number of people who were involved in terms of the fallout from it," Rogow said. "The whole city of Ocala's employment picture was affected by it."

Singerman is the lawyer for Taylor Bean's trustee on the approved Chapter 11 reorganization plan. Last month, he laid out for U.S. Bankruptcy Judge Jerry A. Funk in Orlando how litigation recovered millions of dollars for creditors and resulted in a decrease in some of the 4,600 initial claims—including a number of pro se litigants who had stopped paying their mortgages.

"At the outset of this case, a number of parties, including parties participating in the courtroom and by phone today, thought the case was hopeless," Singerman told Funk at a Nov. 14 status conference.

When it comes to predatory mortgage companies that operated during the housing boom, there may be no better example than the rapacious Taylor Bean and its imprisoned founder.

Taylor Bean was the largest mortgage origination company in the United States with offices in 40 states and was the first to use the Internet to sell home loans.

But some of those homeowners ended up getting foreclosure notices because Farkas failed to service some of his 528,000 mortgages. Stacks of unprocessed checks sent by homeowners were discovered at Taylor Bean offices by investigators and forensic accountants.

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