Investment Banks Sued Over ABFS Bankruptcy

Law360, New York (July 17, 2006, 12:00 AM EDT) -- The Trustee for bankrupt mortgage lender American Business Financial Services Inc. has sued the company’s former executives and five investment banks for $750 million, accusing the group of helping squander the company’s investments.

The state lawsuit, filed in Philadelphia's Court of Common Pleas, is part of Trustee George L. Miller’s attempt to generate much-needed cash to pay off hungry creditors as the ABFS Chapter 7 liquidation moves forward.

The lenders stand accused of aiding and abetting the founder's family by misrepresenting the true value of ABFS...
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