When American Home Mortgage shut down and filed bankruptcy August 6th, the company hired a costly crisis communications firm to handle media coverage, prepare statements, and answer questions.
Creditors slammed the defunct mortgage lender for spewing out $200 to $875 an hour, plus expenses to Manhattan-based Kekst & Co for a service they felt was largely about public image above all else.
“Kekst does not appear to be performing any services which will assist in maximizing the values obtained for the Debtors’ assets or minimizing estate expenses,” the creditors’ attorneys wrote in an Aug. 30 filing.”
“Instead, the primary purpose of Kekst’s retention appears to be to assist management in putting its best face forward with the media and its stockholders concerning the failure of the company.”
American Home Mortgage paid a non-refundable retainer of $50,000 to Kekst & Co. shortly before filing for bankruptcy August 6th.
A spokesperson from American Home Mortgage confirmed that the embattled lender was no longer using the services from the firm.
The news comes on the heels of a slew of borrower complaints that the lender isn’t making property tax payments, and that its failure to release servicing information may put thousands more at risk.
Freddie Mac is suing American Home Mortgage for those very servicing rights.