Legal News

Mann Bracken, Debt-Collecting Law Firm Extraordinaire, To Shut Down

By Nathan Koppel

If you owe money and have been pursued by law firm Mann Bracken, you might be in luck. We repeat: you might be in luck.

The Maryland law firm had been one of the biggest debt-collection firms in the country. But now it appears the firm itself is out of money and is shutting its doors, according to this Baltimore Sun piece.

The firm recently closed its 24 offices across the country with little public warning, according to the Sun. And last week, a Maryland judge ordered that tens of thousands of debt-collection lawsuits involving the firm be dismissed.

Mann Bracken principals issued a statement to the Sun that the firm had “no alternative but to wind down” in light of the November bankruptcy filing of Axiant, a company that worked with Mann Bracken to collect debt. “Axiant's pending liquidation has left Mann Bracken without funds to pay creditors and insolvent," the statement said.

A WSJ article last year looked at the close relationship between Mann Bracken, Axiant, and the National Arbitration Forum, an arbitration firm that has been criticized for favoring credit card companies in debt-collection arbitrations filed against consumers. In 2006, the article noted, Mann Bracken and another law firm it acquired filed almost 60% of the 214,000 consumer-debt arbitrations before the NAF.

The Minnesota attorney general's office, meanwhile, filed suit last year against NAF claiming it failed to disclose its conflicting financial affiliation with Axiant and Mann Bracken. NAF denied the conflict and said that its arbitration system is fair, but it agreed to settle the case and to get out of arbitration consumer matters. Here's a blog post on the suit.

All of this tumult in the debt-collection world, combined with the fact that many banks have agreed to drop mandatory arbitration provisions in their credit-card agreements, would seem to take a lot of heat off of folks with credit-card debt.

But not so fast, the Sun reports. Mann Bracken's clients, after all, could still be entitled to any debt they are owed, even if Mann Bracken goes quietly into the night.

Full post as published by Law Blog - WSJ.com on January 20, 2010 (boomark / email).