American Home Mortgage Investment Corp. filed for Chapter 11 bankruptcy protection in court in Wilmington, Del. on Monday. The filing follows last week's layoff of 6,250 employees (reducing the company base to 750). The Melville, New York-based company also stopped taking mortgage applications last week.
"It is unfortunate that American Home Mortgage, a company which we built into a highly successful business, experienced this sudden reversal of its fortunes due to the unanticipated and rather sudden deteriorations in the secondary and national real estate markets," stated Michael Strauss, American Home's CEO. "The Chapter 11 process provides American Home the protection and the opportunity to have the time to make the most prudent decisions to realize the highest value of our assets for creditors. We now shift our focus to this objective."
American Home also announced that its board has approved and the company has retained the services of interim management firm Kroll Zolfo Cooper, and specifically its chairman, Stephen Cooper, a highly experienced specialist in troubled business situations, to lead the Chapter 11 process.