American Business liquidation case trustee seeks interim continued operation, use of cash collateral

By Caroline Salls

Pittsburgh, May 26 - American Business Financial Services, Inc.'s interim trustee in its Chapter 7 case is seeking interim approval to operate the business for a limited time and authorization to use cash collateral, according to a Thursday filing with the U.S. Bankruptcy Court for the District of Delaware.

On May 17, American Business' Chapter 11 cases were transferred to Chapter 7 for purposes of liquidation and trustee George L. Miller was appointed.

In his motion, Miller said he has decided to continue limited operations of American Business through July 15, subject to obtaining adequate funding to effect an orderly and expeditious shutdown of the businesses and safeguarding the company's assets, including collateral for the debtor-in-possession facility lender and the collateralized sub-debt trustees.

Miller will continue operations pending completion of an analysis of the operations to determine the best method for liquidating the assets for the maximum benefit of the estate.

In turn, American Business' secured lenders said they are willing to provide financing by the use of cash collateral.

According to the filing, without the use of cash collateral, the trustee will not be able to continue operations to "enable the orderly shutdown" of the businesses and the asset sale would not be possible.

Philadelphia-based American Business Financial Services originates, sells and services home equity loans and money mortgage loans. It filed for bankruptcy on Jan. 21. The company's case number is 05-10203.

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