Debt collection law firm Mann Bracken, which threw the courts and collections industry into disarray after abruptly shutting its doors last month, has been placed into receivership by the Montgomery County Circuit Court.
The firm's attorney, James M. Hoffman, said a receiver was appointed Thursday at Mann Bracken's request. Receivership is an alternative to filing for bankruptcy protection.
Mann Bracken said in January that it could not continue handling the cases it had filed against consumers on behalf of creditors. District Court Chief Judge Ben C. Clyburn ordered that the cases — estimated in the tens of thousands — be dismissed, a monumental effort for an already overburdened system.
"The courts are still dismissing the cases," said Angelita Plemmer, a spokeswoman for the Maryland judiciary, who added that it remained unclear how many there were.
Mann Bracken said it couldn't pursue the cases because it had been cut off from its case files by the collapse of a spinoff company. Collections firm Axiant filed for bankruptcy protection in November and is being liquidated. In a statement last month, Mann Bracken said it had "no alternative but to wind down its business operations."
Mann Bracken was one of the nation's largest debt collection law firms, and its shutdown puts scores of creditors at risk of not collecting on debts owed to them. It's also a problem for consumers across the country who had worked out payment plans with Mann Bracken and aren't sure how to put the debt behind them. Maryland regulators have fielded calls from confused and concerned residents wondering whom to pay.