Leslie, I did not know you were a loner.
To the OP -- I, too, find this incredibly tacky. If this "benefit" actually happens, I hope no one attends.
Likely your friend is in the dark, though (as another poster already mentioned) regarding the distribution of funds from the estate. I agree that the money to cover her father's debts will be taken from his own funds that he left on this earth.
I don't understand why your friend thinks she is entitled to this money when his debts are not paid off. Does she not think, as the sole inheritor, that if these debts are left unsettled, they are going to be coming after her next? Does she really think his creditors are just going to drop it?
I would be very cautious with your friendship if you do attempt to selvage it. Money truly does change everything. Your friend's outlook and priorities may be completely different now, and not in a good way.