Posted by Amanda Chapel
Sunday, September 16, 2007
This just in... high-powered corporate and financial PR firm Kekst has gotten the boot from its engagement with the highly public bankruptcy of American Home Mortgage.
According to Mark Power, a partner with the law firm representing the creditors' committee, Kekst and Co.'s $200 to $875 an hour plus expenses to answer media questions, monitor coverage and attend meetings is "a waste."
American Home paid Kekst a nonrefundable retainer of $50,000 shortly before filing for bankruptcy August 6. Creditors immediately objected saying that the company was in the process of liquidating and had no need to use scarce financial resources to gussy up its sullied image.
"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."
The Trustee, a wing of the Justice Department which is partially responsible for ensuring that the company's limited finances are spent judiciously, said American Home had not provided enough information "to justify the reasonableness of the proposed compensation."
American Home spokeswoman Mary Feder confirmed that Kekst was no longer working for the company.