American Home Fires PR Firm
September 17, 2007
Bankrupt mortgage lender American Home Mortgage recently fired Manhattan-based Kekst and Co., whom the company had hired for crisis communications. Kekst was paid a $50k retainer just a day before American Home filed for bankruptcy on August 6th. With the retainer running out they were planning to bill American Home $200-$875 an hour plus expenses, an arrangement which has infuriated creditors trying to salvage anything they can from the dying company.
Attorney Mark Indelicato told Newsday, “What we’re trying to do is preserve assets to pay back creditors as much as we can, and the debtor is hiring a PR firm where people are getting paid an excess of $800 an hour, and for what purpose? The company has no reputation to protect.”
To top it all off, Joseph Kuo, a Kekst partner on the American Home account issued what pretty much amounted to a “no comment” when questioned for the Newsday article. We understand it’s a sticky situation, but that was not exactly a smart move for someone who’s being paid a hefty sum to communicate for the company.