There’s more legal woe in store for Irvine’s New Century Financial Corp.
The bankrupt subprime lender, which is in the process of selling off its assets and winding down operations, reportedly is being sued for $43 million by a group of ex-employees.
The former workers claim the company forced hundreds of them to participate in a deferred-compensation plan, which the company now claims is its property.
Some employees, including a former executive vice president of marketing, say they’re due more than $800,000 in deferred pay.
The lawsuit accuses New Century of violating federal pension laws. The employees are asking a judge to rule that the funds can’t be used to pay New Century’s other creditors, the Associated Press reports.
New Century’s creditors have argued that the deferred-compensation plan, which was implemented in 1999, qualifies as company property.
The lawsuit seeks class-action status on behalf of at least 500 New Century employees.
