Squitieri & Fearon, LLP Announces Lawsuit Against American Business Financial Services, Inc. -- ABFI


NEW YORK, Jan. 25, 2005 (PRIMEZONE) -- The following statement was issued today by Squitieri & Fearon, LLP.

YOU ARE HEREBY NOTIFIED that a Class Action has been filed in the United States District Court for the Eastern District of Pennsylvania on behalf of purchasers of the subordinated notes of American Business Financial Services (Nasdaq:ABFI) ("ABFI" or the "Company") during the period January 27, 2000 through January 21, 2005 (the "Class Period").

The Complaint charges that certain of the Company's officers and directors violated the federal Securities Act of 1933 by misrepresenting the Company's financial performance and business operations, overstating the Company's revenues and earnings, maintaining insufficient reserves, and failing to disclose significant problems with the Company's business during the Class Period.

The lawsuit seeks 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.

At the end of 2004, the Company stopped paying principal and interest on maturity and stopped honoring checks written on ABFI money market accounts. On December 23, 2004 the Company issued a press release stating that it was unable to make any payments on the Company's notes as they became due and on January 21, 2005 the Company announced that it had filed for bankruptcy protection.

Plaintiff is represented by the law firm of Squitieri & Fearon, LLP which has significant experience and expertise prosecuting class actions on behalf of investors and shareholders.

If you are a member of the class described above, you may, not later than March 19, 2005, move the court to serve as lead plaintiff of the Class, if you so choose. A lead plaintiff is a representative party that acts on behalf of other class members in directing the litigation. In order to be appointed lead plaintiff, the Court must determine that the lead plaintiff's claim is typical of the claims of other class members, and that the lead plaintiff will adequately represent the class. Under certain circumstances, one or more class members may together serve as "lead plaintiff". Your ability to share in any recovery is not, however, affected by the decision whether or not to serve as a lead plaintiff.

If you wish to discuss this action or have any questions concerning this notice or your rights or interest, please contact plaintiff's counsel, Stephen J. Fearon, Jr. of Squitieri & Fearon, LLP at (212) 421-6492, Stephen@sfclasslaw.com.