Almost a foregone conclusion at this point, American Home Mortgage Investment Company said today that it has filed for Chapter 11 bankruptcy protection. The semi-good news here: $50 million in debtor-in-possession financing. It's likely that a good chunk of these funds will go to keep its servicing operations afloat. The bad news is that it doesn't appear likely that anything will be available to creditors after the company winds down:
American Home further stated that, since the Company terminated its mortgage originations business and, while the Chapter 11 process is intended to help preserve and protect the value of the Company's assets, it is highly unlikely that these values will be sufficient to pay its creditors in full, and that it is realistic to conclude that ultimately there will be no shareholder equity value remaining.
Read the full press release here.