According to documents obtained by IFR Markets, the DASH II Funding Corp. ABS CDO, managed by Asset Allocation Management (AAM), overpaid equity investors by $3.084 million on June 15, 2002. Downgrades in two FEP Receivables 12-b1 fee deals were missed, which would have triggered an overcollateralization test subsequently cutting off the equity payment.
According to a letter from trustee JPMorgan dated September 27, 2002: "A Class A Noteholder first advised the Collateral Administrator (J.P. Morgan Chase) of the errors in the June Note Valuation Report on September 10, 2002. On the other hand, Asset Allocation has a different view of when the errors were found. AAM claims that errors in the rating classifications of securities in DASH II, including the FEP deals, were reported to JPM in July, but JPM did not correct the errors until Sept. 11 in conjunction with the September quarterly payment calculation."