Binder & Binder, a once-national company that advocates for claimants seeking Social Security disability benefits, intends to lay off 190 of its remaining 280 or so employees as it winds down pursuant to a Chapter 11 bankruptcy reorganization plan.
In state regulatory filings submitted in September, the company said it will lay off 100 employees from its Hauppauge, Long Island, headquarters and 90 employees from a Long Island City, Queens, plant that will close. The date of the layoffs is Dec. 11, according to the filings. The Long Island and Queens facilities are the last remaining sites for Binder & Binder—The National Social Security Disability Advocates LLC.
Fred Caruso, a senior managing director at Development Specialists Inc., a restructuring firm that is administering the wind-down plan for Binder & Binder, said Tuesday that the reorganization plan was confirmed by the Southern District of New York bankruptcy court in October 2016.
The company will eventually shut its doors under the plan, he said, but no final date is set. It will go out of business after it resolves the existing disability benefits claims it is still handling. Under the plan, the company stopped taking new cases, he said.
Before filing for bankruptcy in 2014, Binder & Binder had almost 1,000 employees in 35 offices across the country. Its estimated assets and liabilities were between $10 million and $50 million.
The company was handling more than 57,000 cases from disability claimants, and in the bankruptcy filing it asked for various forms of relief to keep paying its employees and continuing its cases.
In the 2013 fiscal year, the filing said Binder & Binder generated about $83.7 million in revenue, with more than 99 percent of the revenue coming from fees for Social Security and veterans cases.
The company noted that it does not collect revenue on a benefits case until it obtains a favorable decision. As a result, it said its cash flow was largely dependent on the rate at which the federal government adjudicated cases.
The federal government’s sequestration and temporary shutdown in 2013 disrupted revenue flow and “contribut[ed] to the company’s financial distress,” said Binder & Binder.
Another hurdle was the government’s “more stringent standards” in weighing Social Security disability and veteran benefit cases in their early phases.
Caruso also said Tuesday that the company was in default of loan documents.