A large investor in all three DASH ABS CDOs has engaged a grass roots campaign to reject Asset Allocation & Management Company's (AAM) choice for a replacement CDO management team following the resignation of several "key men" in the collateral manager's $1 billion in CDOs.

But according to Barry Atkins, a director at AAM and a member of the firm's board of directors, the plan is likely to hit a brick wall considering the asset manager's clients own nearly 50% of the equity in DASH II and 76% of the equity in DASH III and AAM has already won the right to continue managing DASH I. JPMorgan Chase, the trustee on DASH I and DASH II, received notice of the key-men covenant breaches on June 4 and June 10, respectively.

An insufficient amount of votes were submitted to reject replacing Asset Allocation as the collateral manager for DASH I earlier this month, according to Atkins. However, over 66 2/3% of the investors voted to reject AAM to manage the DASH II transaction last Tuesday. According to the covenants in all three DASH deals, the collateral manager, affiliates, and clients are excluded to vote in the first round where debt investors decide whether to keep the existing manager or not. AAM is confident it will retain management of DASH II since AAM and its client will abstain participating in the equity vote, which would make it impossible for AAM to be replaced since a 66 2/3% majority is needed. Even if the debt investors in DASH III exercise their right to reject the AAM's key-men team, since the firm's client own almost 73% of the equity and they are expected not to vote, the deal will stay with the initial collateral manger by default, according to Atkins, who added, for lack of a better phrase, "It's a big circle jerk that Liberty Hampshire, Pat Livney and Larry Zeno are leading investors on." Atkins said that Liberty was sued by AAM for conspiring with the former key men to steal business away from the firm. Liberty reportedly invested in the debt of all three ABS CDOs.

According to a participant in the DASH II vote, bondholders phoned all over the world to find out who else held the CDO in order to strategize the required 66 2/3% majority of debt investors to reject AAM's replacement team, recently recruited from Zurich Skudder Kemper.

"We look at this as an opportunity to bring in an extremely experienced collateral manager. We are not going to settle for a new team without direct CDO management experience," said the investor in DASH II. "We are rejecting the new team from Skudder Kemper and will not be hiring former key-men who are in the fund-raising stages of a start-up asset management firm."

The former "key men" are helping start a new firm, Meritus Asset Management.

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