First Alliance Mortgage Company

Representation of the official joint borrowers committee in the chapter 11 case of subprime mortgage lender First Alliance Mortgage Company in the Central District of California. The committee represented over 18,000 individuals who had obtained mortgages from First Alliance. At the time of filing bankruptcy, the debtor was under attack by several state attorneys general, AARP, and individual borrowers all claiming that First Alliance used unfair and deceptive sales presentations in the solicitation of its mortgage loans. Through the efforts of the committee, the FTC, the various state attorneys general, among others, a plan of liquidation was achieved in which the consumer borrowers recovered over $60 million. The plan included a settlement of the litigation then pending against First Alliance, which at the time was the largest settlement ever achieved by the FTC in a consumer fraud case.