Mortgage Lenders Network, which filed for bankruptcy in February and laid off 1,800 workers, has reached settlements with banking regulators in Connecticut and three other states that had shut the lender down and threatened millions in fines.
In its agreement with Connecticut, now-defunct MLN admitted that it closed on mortgages late last year that it could not fund, failed to cooperate with regulators seeking information about its sources of funding and allowed unregistered loan originators to work at the company.
The Courant goes on to report that this agreement is separate from the labor department’s pursuit of criminal charges against MLN President Mitchell L. Heffernan for not paying wages to workers.
Indeed, a review of the court docket today reveals that his appeal of the initial bankruptcy court ruling on the unpaid wage claim is still ongoing. Mitchell filed his opening brief on October 12, 2007 to the court, which can be downloaded here. In a footnote (page 4, for those reading at home), his counsel minces no words in saying what he thinks the case is really about — politics.
Upon information and belief, the Attorney General of Connecticut is pursuing this criminal action against Heffernan for purely political purposes, turning Heffernan into a political football.
It should obviously be mentioned that the Bankruptcy Court actually found in Connecticut’s favor, so the state’s position could hardly be seen as frivolous. Connecticut’s brief in response is due November 30, 2007. Any bets on whether the state will respond with a footnote of its own?