George L. Miller, Trustee
Eight Penn Center, Suite 950
1628 John F. Kennedy Boulevard
Philadelphia, PA 19103
Phone: (215) 561-0950
Fax: (215) 561-0330
Email: [email protected]
July 9, 2007
STATUS UPDATE #15
NOTE: The Status Updates are cumulative. Please read all fifteen updates.
I will not comment on pending litigation other than to describe the procedural status of such matters. Please review update #1 through 14 for additional information.
State Court Action
The Federal District Judge remanded the Trustee’s lawsuit against certain former Directors and Officers of ABFS, along with various financial institutions, to Commonwealth of Pennsylvania’s Court of Common Pleas located in Philadelphia, where the suit is currently being heard. Defendants filed various motions to dismiss the lawsuit, the Trustee has opposed the motions and a decision is pending.
Bankruptcy Court Action
The Bankruptcy Court Judge has determined that the Trustee’s allegations of wrong doing by Greenwich, the Indenture Trustees, et al., may proceed forward and discovery has commenced.
Use of Funds Motion
The Trustee identified certain assets of ABFS. In January 2007, the Trustee filed a Motion with the Bankruptcy Court to allow the Trustee to pay Greenwich’s disputed amount out of those assets. The Trustee also requested to use $1,000,000 to pay for the prosecution of the State Court Actions and Bankruptcy Court Actions. Greenwich and the Indenture Trustees objected to the use of any ABFS assets by the Trustee for any reason whatsoever including the prosecution of the litigation which will be the primary source for a distribution to Noteholders. The motion for the use of the funds is currently in the midst of trial. The next trial dates are in August.
Both the State Court Action and Bankruptcy Court Action will likely take years to litigate unless settlements are reached between all parties.