June 5, 2012
It is common knowledge that the American Home Mortgage group of companies files for Bankruptcy in 2007. The proceeding continues to this day. During the course of the bankruptcy, certain court Orders have been entered permitting the destruction of duplicate documents and documents relating to mortgage loans which did not close or were abandoned.
The Plan Trust has now filed a Motion seeking to abandon certain original documents being held in Iron Mountain document storage facilities across the United States. Prior to filing bankruptcy, the American Home Mortgage companies contracted with Iron Mountain Information Management, Inc. for document and data storage. The account numbered 04421.0M070K (the “M070K asccount”) was used for hard copy document storage utilized by the servicing business, American Home Mortgage Servicing, Inc. (AHMSI), which servicing business was sold out of the bankruptcy early on.
Iron Mountain has now demanded the payment of $473,527.57 in expenses relating to the M070K account, and AHMSI has filed a request for payment of “alleged administrative expenses” in the AHM Bankruptcy seeking to be indemnified as to any expenses it may have to pay Iron Mountain relating to the M070K account. AHMSI has taken the position that certain of the documents stored under the M070K account belong to the AMH group of Debtors, and thus AHMSI is not responsible for Iron Mountain’s bill.
The Plan Trustee has taken the position that the documents are AHMSI’s property pursuant to the Sale Approval Order which approved the Asset Purchase Agreement whereby the AHM Debtors sold AHMSI all of the books and records that were being stored in connection with the sale of AHMSI out of the Bankruptcy Estate. The Plan Trustee has taken the position that the documents being stored under the M070K account consist of loan applications and other documents relating to the servicing business. As AHM shut down its loan origination business 5 years ago, sold AHMSI four years ago, and liquidated most of its other assets prior to the effective date of the Chapter 11 Plan, the Plan Trustee has no need for the Iron Mountain documents for the remaining Chapter 11 process. The Plan Trustee thus seeks an Order permitting it to abandon the Iron Mountain documents to the extent that the Plan Trust has any interest therein.
As we all know, AHMSI continues to pursue foreclosures throughout the United States. Until now, certain original documents relating to the mortgage loans the subject of these foreclosures have been maintained as a function of the AHM Bankruptcy. Now, however, AHMSI is trying to saddle the AHM Bankruptcy Estate with the cost of maintaining these documents, and the Chapter 11 Plan Trustee wants no part of that burden. As such, if the documents are abandoned, and no one pays Iron Mountain’s bill, the documents could very well wind up being destroyed.
Anyone who believes that their original documents may be the subject of this Motion may thus want to contact counsel for the Plan Trustee, which is the Firm of Young, Conaway, Stargett, & Taylor, LLP, 1000 North King Street, Wilmington, Delaware 19801, telephone (302) 571-6600. The three attorneys from YCST listed on the Plan Trust’s Motion are Sean Beach, Esq., Margaret Greecher, Esq., and Patrick Jackson, Esq. Co-counsel for the Plan Trustee is the Firm of Hahn & Hessen, LLP, 488 Madison Avenue, New York, New York 10022, telephone (212) 478-7200. The three attorneys from H&H listed on the Motion are Mark Indelicato, Esq., Edward Schnitzer, Esq., and Joseph Orbach, Esq.
This information is public, and was provided to Mr. Barnes as he remains on the service list for the AHM Bankruptcy due to his prior involvement in the case relating to certain homeowners/borrowers.
Jeff Barnes, Esq., www.ForeclosureDefenseNationwide.com