American Home Mortgage Investment Corp. Files for Chapter 11 Bankruptcy

  
    
  
  
    
      American Home Mortgage Investment Corp. (NYSE: AHM) today reported that 
      its Board of Directors, after carefully assessing the sudden adverse 
      impact on the Company’s liquidity and business 
      from the extraordinary disruptions now occurring in the secondary 
      mortgage and real estate markets, has authorized management to seek 
      protection for the Company through the bankruptcy process in order to 
      best preserve the value of the Company’s 
      assets. Accordingly, American Home Mortgage Investment Corp., together 
      with certain of its subsidiaries, has today filed a voluntary petition 
      for relief under Chapter 11 of the U.S. Bankruptcy Code in the U.S. 
      Bankruptcy Court for the District of Delaware. Under the protection of 
      Chapter 11, American Home will have the time and opportunity to achieve 
      the best possible value for the creditors of its mortgage based assets 
      and related operations, as well as an orderly wind down of the Company.
    
    
      American Home ceased taking mortgage applications on August 1, 2007 and 
      separated all production employees on August 3, 2007. The Company is 
      currently maintaining its thrift and servicing businesses.
    
    
      In conjunction with the filing, WL Ross & Co. LLC through its fund, WLR 
      Recovery Fund III, L.P., has agreed to provide American Home up to $50 
      million in debtor in possession (DIP) financing, subject to court 
      approval. The DIP financing is expected to provide American Home with 
      funding to facilitate the Chapter 11 process.
    
    
      American Home further announced that its Board has approved and the 
      Company has retained the services of Kroll Zolfo Cooper, and 
      specifically its Chairman, Stephen Cooper, a highly experienced 
      specialist in troubled business situations, to lead the Chapter 11 
      process.
    
    
      “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 Chief Executive 
      Officer. “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 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.
    
    
      The Company anticipates that the New York Stock Exchange will commence 
      delisting proceedings with respect to its common and preferred stock.
    
    
      Milestone Advisors, LLC are acting as advisors to American Home and 
      Young Conaway Stargatt & Taylor, LLP is acting as legal counsel to the 
      Company with respect to the bankruptcy.
    
    
      More information about American Home’s Chapter 
      11 case will be available on its Web site at www.americanhm.com
    
    
      This news release contains “forward-looking 
      statements” that are based upon expectations, 
      estimates, forecasts, projections and assumptions. Any statement in this 
      news release that is not a statement of historical fact, including, but 
      not limited to, earnings guidance and forecasts, projections of 
      financial results and loan origination volume, expected future financial 
      position, dividend plans or business strategy, and any other statements 
      of plans, expectations, objectives, estimates and beliefs, is a forward 
      looking statement. Words such as “look 
      forward,” “will,” 
      “anticipate,” “may,” 
      “expect,” “plan,” 
      “believe,” “intend,” 
      “opportunity,” “potential,” 
      and similar words, or the negatives of those words, are intended to 
      identify forward-looking statements. Such forward-looking statements 
      involve known and unknown risks, uncertainties and other factors that 
      are difficult to predict, and are not guarantees of future performance. 
      As a result, actual future events may differ materially from any future 
      results, performance or achievements expressed in or implied by this 
      news release. Specific factors that might cause such a difference 
      include, but are not limited to: American Home’s 
      limited operating history with respect to its portfolio strategy; the 
      potential fluctuations in American Home’s 
      operating results; American Home’s potential 
      need for additional capital; the direction of interest rates and their 
      subsequent effect on the business of American Home and its subsidiaries; 
      risks associated with the use of leverage; changes in federal and state 
      tax laws affecting REITs; federal and state regulation of mortgage 
      banking; and those risks and uncertainties discussed in filings made by 
      American Home with the Securities and Exchange Commission. Such 
      forward-looking statements are inherently uncertain, and stockholders 
      must recognize that actual results may differ from expectations. 
      American Home does not assume any responsibility, and expressly 
      disclaims any responsibility, to issue updates to any forward-looking 
      statements discussed in this news release, whether as a result of new 
      information, future events or otherwise.