DVI Inc. took another wrong turn last week, as the trustee announced that DVI Financial Services, as servicer, "may have inappropriately used somewhere between $2.5 and $3.5 million" of funds due to nine trusts in question prior to filing for Ch. 11 bankruptcy.
While some investors were crying foul play over this misappropriation, others took a more tempered approach, citing the decreased financial flexibility upon entering bankruptcy and the planned auction of DVI's assets. While this is a relatively small amount for DVI to be short, seen only eating into the most subordinated of bondholders, "Most holders assumed the problems did not impact the securitizations," one investor said. "We now know this is not true; this involves assets in the trust."