‘Underwriter’ And ‘Guarantor’ Of Factoring Transaction? Third Circuit Mistakenly Looks To Non-Party

‘Underwriter’ And ‘Guarantor’ Of Factoring Transaction? Third Circuit Mistakenly Looks To Non-Party

In Wall v. Corona Capital, LLC, Nos. 17-2275 and 17-2361, 2018 U.S. App. LEXIS 33071 (3rdCir. Nov. 23, 2018), the U.S. Court of Appeals for the Third Circuit ruled that Altium Group, LLC, did not breach its contract with Robert and Linda Wall, in a dispute over a structured settlement factoring transaction that the Walls invested in before it turned out that the transaction documents had been forged. As described in posts here and here, in 2012, Altium and the Walls…

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In Wall v. Corona Capital, Federal Appeals Court Did Not Make Distinction Between Sale Of Structured Settlement Payment Rights (Which Was At Issue) And Sale Of Annuity (Which Was Not)

In Wall v. Corona Capital, Federal Appeals Court Did Not Make Distinction Between Sale Of Structured Settlement Payment Rights (Which Was At Issue) And Sale Of Annuity (Which Was Not)

As discussed in this post, a federal appeals court has ruled against investors in a structured settlement factoring transaction, reversing a lower court ruling that said they could recover from an investment company that had sold them its putative rights to future structured settlement payments. The opinion contains some statements that are, at best, difficult to square with applicable law, including prior precedent from the same federal appeals court.  Those statements are worth reviewing, and some are looked at more…

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Appellate Court Deals Setback To Couple Trying To Recover More Than $150,000 Invested In Structured Settlement Factoring Transaction That Later Unraveled

Appellate Court Deals Setback To Couple Trying To Recover More Than $150,000 Invested In Structured Settlement Factoring Transaction That Later Unraveled

In 2012, Robert and Linda Wall signed a contract with Altium Group, LLC, as part of a deal for the purchase of the right to receive structured settlement payments. The Walls were to pay Altium more than $150,000 for these payments, which – once purchased – would be paid to them from 2014 to 2019. Altium agreed to provide the Walls with a “Closing Package” that was to include a certified copy of an order approving the transfer of the…

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Lawsuit Alleging Billion Dollar Bribery Scheme Should Be Dismissed Because Assignment By Venezuela Oil Company Violated Champerty Law, Says Judge

Lawsuit Alleging Billion Dollar Bribery Scheme Should Be Dismissed Because Assignment By Venezuela Oil Company Violated Champerty Law, Says Judge

A federal magistrate judge has recommended dismissing a lawsuit filed by a trust company created by Venezuela’s state-run oil company to sue other oil companies over an alleged multi-billion dollar bid-rigging and bribery scheme because, among other things, the assignment to the trust was champertous. U.S. Magistrate Judge Alicia M. Otazo-Reyes concluded that the trust “lacks standing to pursue this action as the purported assignee of claims belonging to PDVSA” – Venezuela’s state-run oil company – and she therefore recommends…

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Life Settlement Company Files For Bankruptcy

Life Settlement Company Files For Bankruptcy

News reports indicate that companies affiliated Emergent Capital, Inc., filed for bankruptcy this month, apparently due to the possibility of a loan default resulting from changes in life expectancy estimates. Law360’s report, Life Settlements Firms Open Del. Ch. 11 As Debt Limit Nears, is available here. Another news story, Emergent Files For Bankruptcy, Fearing Loan Default, has been published by The Deal Pipeline.

Reardon Scanlon’s Partner Pointed Out, and Judge Agreed: No Independent Professional Advice Where Factoring Company Referred – and Was Going To Pay – Adviser

Reardon Scanlon’s Partner Pointed Out, and Judge Agreed: No Independent Professional Advice Where Factoring Company Referred – and Was Going To Pay – Adviser

As discussed in several recent Secondary Insurance Market Blog posts (here, here, here, and here), “independent professional advice” can be an important concept in the statutory scheme established by structured settlement protection acts for regulation of transfers of future structured settlement payments. While most of the 49 state SSPAs provide that a payee may waive the right to receive such advice, there are some state SSPAs that do not allow for waiver, and instead require that a payee receive such advice…

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Advice From Relatives Is Not ‘Independent Professional Advice’ About A Proposed Transfer Of Settlement Payments

Advice From Relatives Is Not ‘Independent Professional Advice’ About A Proposed Transfer Of Settlement Payments

Some state structured settlement protection acts provide that, for a court to approve a transfer and give legal effectiveness to a transaction, the payee must first receive independent professional advice from a lawyer, accountant, or other professional. The Ohio Structured Settlement Protection Act, before it was revised last year, was one such statute.  One Ohio court had to face the question of whether advice from relatives constituted “independent professional advice” under the Ohio SSPA.  Unsurprisingly, the court rejected that idea,…

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If Adviser Is To Be Paid From Proceeds Of Transfer, Advice Is Not Independent And Structured Settlement Protection Act Standards Have Not Beet Met

If Adviser Is To Be Paid From Proceeds Of Transfer, Advice Is Not Independent And Structured Settlement Protection Act Standards Have Not Beet Met

What happens if a payee receives the advice of a professional advisor about a proposed transaction, and the advisor’s compensation depends on whether the transaction happens? If the transaction is a proposed transfer of structured settlement payment rights under the Minnesota Structured Settlement Protection Act, then the deal cannot receive court approval and thus will never be a legally effective transaction. That was the opinion in a 2011 opinion of a Minnesota trial court, Teasley v. Velardi, No. 27-CV-1473, 2011…

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Under Some State Structured Settlement Protection Acts, A Payee Must Receive Independent Professional Advice, As One Minnesota Appellate Opinion Illustrates

Under Some State Structured Settlement Protection Acts, A Payee Must Receive Independent Professional Advice, As One Minnesota Appellate Opinion Illustrates

Most structured settlement protection acts provide that a transfer of the right to receive a future structured settlement payment is effective only when a court approves a transfer based on findings that (1) the transfer is in the payee’s best interest, (2) the transfer does not contravene a court order or statute, and (3) the payee has received independent professional advice, or knowingly, and in writing, waived the right to receive such advice. As to that last requirement, a New…

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Georgia Supreme Court Says Terms Of Litigation Funding Agreement Show That Arrangement Is Not Subject to Usury, Payday Lending Laws

Georgia Supreme Court Says Terms Of Litigation Funding Agreement Show That Arrangement Is Not Subject to Usury, Payday Lending Laws

The headline reads “Litigation funding not subject to Georgia’s interest rate laws, state Supreme Court rules.” And it is true that the Georgia Supreme Court ruled in favor of a litigation funding company, on the grounds that the state’s usury or payday loan laws did not apply. But the terms of the litigation funding agreements were the basis for the conclusion that the statutes were inapplicable, and had those terms been different – such as if the terms required repayment…

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