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]
September 15, 2008
STATUS UPDATE #20
NOTE: The Status Updates are cumulative. Please read all nineteen updates.
STATE COURT SETTLEMENT
I have agreed to settle the claims against the former officers and directors of ABFS, which claims are being asserted in the State Court Actions of Miller v. Santilli et al., and Miller v. Weber. The claims asserted in the State Court Actions against ABFS’s former attorneys, auditor, and certain Financial Institutions have not been settled, and remain on track for a trial next Spring.
The settlement is solely with the former Officers and Directors and with NO other parties. I will refer to this settlement as the “D & O Settlement”.
NOTEHOLDER PLAINTIFF CLASS SETTLEMENT
The former officers and directors of ABFS who are defendants in class action litigation pending in the United States District Court for the Eastern District of Pennsylvania, commenced by a class of ABFS noteholders, have also entered into a settlement (the “Noteholder Class Action Settlement”).
COMBINED SETTLEMENT PROCEEDS
The Trustee D & O Settlement and the Noteholder Class Action Settlement will result in combined payments in excess of $33,000,000.00, to be shared equally between the Trustee (on behalf of the ABFS bankruptcy estate) and the Noteholder Plaintiff Class.
The D & O Settlement and the Noteholder Class Action Settlement will result in payments by the insurance carriers of the former ABFS officers and directors of substantially all of the proceeds likely remaining under the applicable insurance policies. The Noteholder Plaintiff Class consists of ABFS Noteholders who invested money during specified periods, and who are creditors of ABFS. As creditors of ABFS, these noteholders as a group hold in excess of 75% of the dollar amount of the claims against the ABFS bankruptcy estate. Those eligible to participate in the Noteholder Class Action Settlement will receive a Notice from Berger & Montague, the lead Class Action Attorneys. ALL inquiries regarding the Noteholder Class Action Settlement should be directed to the Class Action Attorney, and not to the Chapter 7 Bankruptcy Trustee (George L. Miller).
The Trustee’s portion of the settlement proceeds from the Trustee’s D&O Settlement will be disbursed in accordance with the bankruptcy claim process pursuant to the priorities established under the Bankruptcy Code. At this juncture, it is not possible to determine the amount or exact timing of the distribution of the Trustee’s portion of the settlement proceeds. To the extent that distributions are to be made under the earlier IT Settlement Agreement, such distributions will be made to the appropriate Indenture Trustee and the Indenture Trustee (not the Chapter 7 Bankruptcy Trustee) will in turn disburse to Noteholders.