American Home Mortgage objects to timing, motive behind borrowers' committee appointment motion

By Caroline Salls

Pittsburgh, Sept. 26 - American Home Mortgage Investment Corp. objected to some individual borrowers' request for appointment of an official committee of borrowers for the company's Chapter 11 bankruptcy case, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

According to the objection, the committee appointment motion was filed 13 months after American Home filed for bankruptcy.

The company said the fact that the motion was filed on the eve of the disclosure statement approval hearing "leads to the conclusion that such delay was, in fact, a deliberate strategy to pursue these movants' personal interests against the debtors."

"Given that certain movants began actively participating in the bankruptcy nearly a year ago, there is simply no acceptable excuse for such an untimely request," the company said in the objection.

In addition, American Home said the borrowers' motion does not allege any violations of the official committee of unsecured creditors' fiduciary duties, confirms that the unsecured creditors committee has attempted to maximize the value of the company's estates and bases the request upon their personal interests that "are separate and aside from the maximization of the estates' value."

As previously reported, the individual mortgage holders asked the court to appoint an official borrowers committee on Sept. 9.

According to the motion, American Home's bankruptcy case has been "dominated by warehouse lenders, mortgage securitizers and other financial institutions that, on several issues, have direct conflicts with the borrowers."

The borrowers also said the company's official committee of unsecured creditors has not worked to protect the borrowers' interests.

In addition, the borrowers said they were excluded from plan of liquidation negotiations, and the company has proposed a plan that minimizes or eliminates their claims and makes it "much more difficult for them to protect themselves or their families in the event of foreclosure proceedings."

The borrowers also said many mortgage holders have not filed claims in American Home's bankruptcy case because the company did not provide them with notice of the case or claims bar date.

American Home, a Melville, N.Y.-based real estate investment trust focused on residential mortgage loans, filed for bankruptcy on Aug. 6, 2007. Its Chapter 11 case number is 07-11047.

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