American Business Financial Services, Inc.
Class Action Against American Business Financial Services, Inc. Settled
Summary of Case and Settlement: SFMS filed a securities class action against American Business Financial Services, Inc. (“ABFS” or “Company” or “Defendant”) on March 4, 2005 in the United States District Court for the Eastern District of Pennsylvania, alleging violations of the federal securities laws. The action was filed on behalf of all purchasers of ABFS subordinated notes between January 18, 2002 and January 20, 2005 (the “Class Period”). The lawsuit sought to recover on behalf of investors who bought the Company’s subordinated notes pursuant to materially false and misleading prospectuses and registration statements, which violated Sections 11 and 12 of the Securities Act of 1933. Specifically, the Complaint alleged that, at the end of 2004, the Company stopped paying principal and interest on maturity and stopped honoring checks written on ABFS money market accounts. On December 23, 2004, the Company issued a press release stating that it was unable to make any payments on its notes as they became due and, on January 21, 2005, the Company announced that it had filed for bankruptcy protection.
On March 30, 2005, the various cases against ABFS were consolidated and lead plaintiff and counsel were appointed. Following further investigation by lead counsel, an Amended Consolidated Complaint was filed on November 16, 2005. On February 16, 2006, Defendant filed a Motion to Dismiss and, on April 3, 2006, Plaintiffs submitted their opposition. On January 9, 2007, the Court granted in part and denied in part Defendant's Motion to Dismiss. On October 1, 2007, Plaintiffs filed an Amended Motion For Class Certification, which was granted by the Honorable Thomas N. O'Neill, Jr. The Class consists of persons who purchased or rolled over ABFS Notes between January 18, 2002 and January 20, 2005. On April 4, 2008, the Court directed Plaintiffs to issue notice to Class members regarding the pendency of the action as a class action.
On September 19, 2008, Judge O'Neill granted Plaintiffs' Motion for Preliminary Approval of a proposed settlement. For more information on the settlement, please visit www.hrsclaimsadministration.com/cases/abf/.
More Information: If you would like to receive additional information on the settlement, please click here.
This page was last updated: 2012-01-09 16:21:11