Employees of the brokerage GVA Advantis might not get paid for their last few weeks at the company, and it’s unclear whether contractors or other businesses owned money will get paid, according to a company memo.
At least seven of the top brokers have left the brokerage, which was based in Washington and had a profitable office in Richmond. Jamie Thomas, the former managing director, has taken another job at a REIT. BizSense has been unable to reach Thomas. (You can read our previous story here.)
In a company email obtained by BizSense and reprinted below, chief operating officer Robert Brumm said that the company’s account was frozen by a lender. “This means we no longer have control or access to the money we would use to pay commissions, payroll, benefits, subcontractors and other critical vendors.”
From: Brumm, Robert
Sent: Thu Jul 23 10:52:30 2009
On Monday, July 20, 2009 we were informed by Wachovia Bank that The St. Joe Company (JOE), as our only secured creditor, exercised its legal rights under a Deposit Account Control Agreement (DACA) to freeze the funds in all of our operating accounts. This means that we no longer have control of or access to the money we would use to pay commissions, payroll, benefits, subcontractors and other critical vendors. Over the last three days, we have informed JOE of the disastrous personal consequences of their business decision and pleaded with them on your behalf to allow us to have an orderly shut down of our operations, pay people for the time they have worked, transition construction jobs and management contracts and close the books of the company. At 6:15 PM last night, JOE rejected all of our requests and informed us that they will not release the funds. Any checks that we issued and were not cleared by Friday of last week will be returned unpaid due to the account being seized by JOE.
As a result, we cannot give any assurance that we can pay employees for the time you have worked since the last pay period, and certainly cannot give any assurances for any future payroll. We will continue to work on ways to get payroll covered, but cannot be assured any success. In brief, you should collect your personal items and take care of any issues you feel are consistent with professional courtesy and go home. We will keep the email server active as long as we can and will keep you posted of any changes to our status via email or direct correspondence to your home. Most of you suspected or knew we were going to have to wind down at some point in the near future, but none of us anticipated this abrupt end to a company rich in history and client focused employees.
I know you have many more questions, but for now we will focus on pay, benefits and retirement accounts.
As mentioned above, we cannot give any assurances that you will receive a paycheck next Friday. That check would have covered the period from July 9th through July 22nd. If we do not get access to the funds to pay people, you can file a claim with the Department of Labor’s Wage Hour division for back wages. I want to make it clear that the company has the cash to cover payroll, we just don’t have access to the bank accounts. You are also eligible to apply for unemployment insurance.
You received a note from Karen McWeeny earlier that we suspended the 401(k) plan and accelerated the vesting of the company’s match to 100%. These funds are held by Merrill Lynch in a trust account, and are not affected. You should contact Merrill Lynch directly should you choose to transfer those funds to another plan or a rollover IRA. Remember, there are steep penalties if you choose to have the money sent to you directly, and you should consult with an advisor before you do so.
All employee health plans will be terminated no later than July 31, 2009. The company pays insurance premiums in arrears, so the premium we would pay for July coverage would normally be made at the end of July. If we do not have the ability to pay the premium, the insurance company can cancel the plan retroactive to July 1. This means any claims not processed by July 31 can be rejected by United HealthCare and the patient is responsible for payment. Additionally, with the plans being terminated there is no COBRA option as there is no successor plan on which to provide coverage. Resa will provide additional details in a separate note.
There will be a small team working to deal with these issues out of professional courtesy to employees and clients, even though there will be no pay for doing so. Paul Thomann will be the lead contact for all issues related to construction jobs. Tim Allison will be the lead contact for all issues related to property management and Linda Rushak will handle the closing of the property accounts (which are not impacted by JOE’s actions), wiring the funds to owners, and shutting down the lockboxes to make sure no deposits for client’s rents are deposited.
There are literally hundreds of matters that have to be tended to, but we have limited resources to take care of everything. I recommend you email me, Nicole or Karen James on general questions and direct operational concerns to the respective leaders mentioned above.
We are truly saddened by this outcome, but will work hard to make sure we do everything in our power to get people paid.
Thank you for your service, and we will be in touch
Robert L Brumm
Chief Operating Officer
Advantis Real Estate Services Company
1747 Pennsylvania Ave NW
Washington, DC 20006