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American Business Financial Services files for Chapter 11
New York, Jan. 21 - American Business Financial Services, Inc. filed for Chapter 11 in the U.S. Bankruptcy Court for the District of Delaware Friday.
The company listed assets of $1.084 billion and liabilities of $1.072 billion.
It listed $95.58 million of secured subordinated debt securities held by 5,359 investors and $490.03 million of unsecured subordinated debt securities held by 21,362 investors.
For preferred stock, American Business Financial listed 109.44 million shares held by 5,378 investors.
The largest unsecured claim is the Stewardship Center of St. Louis with a $2.055 million subordinated uncollateralized note claim. Second was John A. Malack and Eileen E. Malack of Endicott, N.Y., with a $1.917 million subordinated uncollateralized note claim, followed by EMS Executive Mailing Services of Palos Hills, Ill., with a claim of $1.642 million for mailing services, Independence Blue Cross of Philadelphia with a $1.470 million claim for insurance, and Christopher D'Ambrosio and Julia M. D'Ambrosio of Newtown Square, Pa., with a $1.435 million subordinated uncollateralized note claim.
The Chapter 11 filing follows the disclosure on Wednesday that American Business Financial had several default events under its Patriot Group repurchase agreement and in returned had accepted a 20% default rate of interest and a $750,000 increase to the facility.
The company was also in default under its $100 million agreement with Fortress Credit Corp. and as a result could borrow on the facility.
In December it said it could not make the principal and interest payments on its subordinated debentures and senior collateralized subordinated notes when due, which would constitute a default.
American Business Financial is a Philadelphia originator, seller and servicer of home equity loans and money mortgage loans.
The company's Chapter 11 case number is 05-10203.
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