The "key-man" covenants in Asset Allocation & Management Co.'s (AAM) Diversified Asset Allocation Holdings (DASH) SF CDOs have allegedly been breached after the founders of AAM's CDO business left the firm. JPMorgan Chase, the trustee on DASH I and DASH II, received notice that key-men covenant breaches had occurred on June 4 and June 10, respectively.

The three key persons to leave were principal Patrick Livney, ABS head trader and portfolio manager Larry Zeno, and portfolio manager Kathy Lang. Instead of jumping ship to another firm, the three are starting a new company, Meritus Asset Management, which will focus on structured finance, collateral management, and CDO issuance.

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