American Business Financial asks for OK of agreement with Law Debenture, Wells Fargo

By Reshmi Basu

New York, Nov. 13 - American Business Financial Services, Inc.'s Chapter 7 trustee requested court approval of a settlement agreement with Law Debenture Trust Co. of New York and Wells Fargo Bank, NA, according to a Tuesday filing with the U.S. Bankruptcy Court for the District of Delaware.

Law Debenture is the indenture trustee on some $54.5 million of collateralized notes due 2003, and Wells Fargo is the indenture trustee on about $41 million of collateralized notes.

The settlement resolves a number of conflicts, including a dispute over the amount of claims, the Chapter 7 trustee said in the motion.

Under the proposal, Wells Fargo and Law Debenture collectively will get a $40 million unsecured super-priority claim and a $58.15 million general unsecured claim against the estate.

A hearing is scheduled for Dec. 19.

Philadelphia-based American Business Financial Services originates, sells and services home equity loans and money mortgage loans. It filed for Chapter 11 on Jan. 21, 2005. The case was converted to a Chapter 7 bankruptcy on May 17, 2005. The company's case number is 05-10203.

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