Kansas City, Mo.-based Five Elms Capital, an investment firm with a focus on B2B software and technology companies, is the latest creditor to join a forced bankruptcy lawsuit against recently-shuttered reverse mortgage lender Live Well Financial, according to recent court documents obtained by RMD. The collective of companies under the Five Elms umbrella is represented by law firm DLA Piper, which when contacted by phone by RMD, confirmed that it has filed a motion of appearance in Delaware Bankruptcy Court.
“DLA Piper LLP (US), as counsel to [Five Elms], creditors and parties in interest in the above-captioned case, hereby enters its appearance in the […] case and requests […] that any and all notices, papers and pleadings filed or served in the above-captioned cases be given to and served upon the undersigned,” the filing reads. It then goes on to list the associated attorneys for Five Elms.
Five Elms invested in Live Well during its Series A round of funding in September 2008, according to data at CrunchBase. The company was joined in the Series A round by Boston, Mass.-based North Hill Ventures, which specializes in early-stage financial and marketing technology companies.
A motion of appearance can serve two purposes in a legal proceeding: it can be either a written or verbal communication to notify the court and other involved parties that a party wishes to either appear in or receive notice of the proceedings, or it can serve as an attorney’s written or verbal notice to the court that he or she will represent one of the parties involved.
This is the latest in a series of unfolding events concerning the abrupt closure of Live Well Financial, which RMD learned about on May 3. The closure was followed by more than 100 lay-offs at the company’s Richmond, Va. headquarters, which led to the filing of a class action lawsuit from a former employee attempting to recover lost wages. Live Well intends to challenge that suit.
It was then that three former creditors filed suit to force the remains of the company into involuntary bankruptcy, using apparent investigations being made by regulators and federal law enforcement as reasoning for seeking the court-supervised liquidation.
Filings in the bankruptcy case also stated that each of the company’s former creditors had been separately contacted by both the Securities and Exchange Commission (SEC) and the Federal Bureau of Investigation (FBI), reportedly in relation to the financial activities of Live Well.
Flagstar Bank had previously filed a lawsuit against Live Well, seeking repayment of more than $80 million in delinquent loans and interest, according to a court filing made with the U.S. District Court for the Eastern District of Michigan.
Following the Live Well closure, multichannel lender Open Mortgage announced it had hired the core team of mortgage lending executives from Live Well, in addition to approximately 50 former Live Well sales and operations employees to expand its retail, wholesale, principal agent and closed-loan seller mortgage channels.
