What Happens When Factoring Companies Ignore Requirements Of Pennsylvania Structured Settlement Protection Act? Recent PSU Report, and Previous Experience In Phillips, Provide Some Examples

What Happens When Factoring Companies Ignore Requirements Of Pennsylvania Structured Settlement Protection Act? Recent PSU Report, and Previous Experience In Phillips, Provide Some Examples

My partner, Kathy Scanlon wrote here and here about a recent Pennsylvania Structured Settlement Protection Act matter, and offered some comments about the statute and relevant judicial rule.  Kathy is admitted to practice in Pennsylvania, and her experience in Pennsylvania structured settlement factoring matters goes back two decades. One Pennsylvania SSPA proceeding that Kathy won early in the statute’s existence illustrates some of the points she made about the need for careful judicial review of such proceedings. In the case…

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While Pennsylvania Law Requires That Court Be Given Accurate Details About Settlement Factoring, Vigilant Judge May Be The Best Protection Against ‘Unreliable’ Information

While Pennsylvania Law Requires That Court Be Given Accurate Details About Settlement Factoring, Vigilant Judge May Be The Best Protection Against ‘Unreliable’ Information

The Pennsylvania Structured Settlement Protection Act is the statute that led to a request for judicial approval of a proposed transaction involving a Penn State University sexual abuse settlement. That matter, described in more detail here, led a Pennsylvania judge this month to reject to purchasing company’s “abysmal” deal. The Pennsylvania Structured Settlement Protection Act, like all forty-nine state SSPAs, provides that a structured settlement payee (like the victim in the Penn State case) can sell the rights to future…

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Like Sharks ‘With Blood In The Water’: News Report Says Judge Criticizes Factoring Company For ‘Abysmal’ Structured Settlement Transfer Proposal And ‘Completely Unreliable’ Court Filings

Like Sharks ‘With Blood In The Water’: News Report Says Judge Criticizes Factoring Company For ‘Abysmal’ Structured Settlement Transfer Proposal And ‘Completely Unreliable’ Court Filings

A Pennsylvania judge this week said that structured settlement factoring companies were like “sharks” with “blood in the water” before rejecting a proposed factoring transaction – involving nearly $3 million in future payments – that was “abysmal” and involved court-filed papers that were “completely unreliable”. That’s what was reported by a newspaper in West Chester, Pennsylvania, the Daily Local News, in an article headlined Judge Denies Payout In PSU Victim’s Case. The newspaper reported that the structured settlement payee was a victim…

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Another Reason To Reject Proposed Transaction: No Proof That Settlement Factoring Company Served Payee, Says Court

Another Reason To Reject Proposed Transaction: No Proof That Settlement Factoring Company Served Payee, Says Court

As described here, a New York court this year rejected an “unconscionable” proposed transfer of structured settlement payment rights as failing to meet either the “best interest” or “fair and reasonable” standard of the New York Structured Settlement Protection Act. Acting Supreme Court Justice John H. Rouse, in In the Matter of the Petition of J.G. Wentworth Originations, LLC (Sanders), Index No. 001145, Supreme Court, Suffolk County, N.Y. (N.Y. Sup. Ct. May 21, 2018), also said that the factoring company failed to…

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New York Judge Rejects ‘Unconscionable’ Settlement Factoring Transaction

New York Judge Rejects ‘Unconscionable’ Settlement Factoring Transaction

A New York trial court earlier this year rejected a proposed transfer of structured settlement payment rights as “unconscionable”, since it would involve an exchange of payments “with a present value of $135,010.00 for a sum of only $10,000.00”. In the Matter of the Petition of J.G. Wentworth Originations, LLC (Sanders), Index No. 001145, Supreme Court, Suffolk County, N.Y. (N.Y. Sup. Ct. May 21, 2018), involved a proposed transfer of structured settlement payment rights by payee Frank Sanders. The court…

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Court: No Fraud By Owners In Financing Of Settlement Factoring Company Sale

Court: No Fraud By Owners In Financing Of Settlement Factoring Company Sale

A New York court last month issued an opinion in a long-running dispute over the financing of a sale of a structured settlement factoring company, dismissing the claims that the owners of the factoring company engaged in fraud to shield assets from the prospective purchaser. In describing the decision, one news report put it this way: “A New York state judge . . . threw out an investment company’s lawsuit accusing the majority owners of a structured-settlement buyout company of…

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Billionaire’s Investment Is ‘Latest Twist’ in Lawsuit Funding, Say Reports

Billionaire’s Investment Is ‘Latest Twist’ in Lawsuit Funding, Say Reports

News reports say that billionaire investor George Soros is getting involved in backing a litigation funding company – the “latest twist on the litigation funding market, which has drawn criticism for monetizing and encouraging the lawsuit culture in the U.S. The firm.” That’s the way one report described the development – see Soros Sees Mighty Big Gains In Investment Portfolios Made Out Of Lawsuits (available here). Other stories include the following: “How George Soros Is Making Money Off Personal Injury Financing,”…

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Court That Ruled CFPB Unconstitutional Also Concludes That Judge In NFL Concussion Litigation Was Correct To Invalidate Lawsuit Funding Deals

Court That Ruled CFPB Unconstitutional Also Concludes That Judge In NFL Concussion Litigation Was Correct To Invalidate Lawsuit Funding Deals

A federal court has concluded that the structure of the Consumer Financial Protection Bureau is unconstitutional.  In the ruling, described here and here,  the court dismissed the CFPB as a party but allowed the New York Attorney General to proceed with claims against a litigation funding company, RD Legal Funding (RD), for violations of federal and state law. One important issue that the court reached was whether the judge overseeing the NFL concussion litigation was correct in is view of…

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Court Describes Circuitous Route of NFL Concussion Litigation, Other Claims, to Recent CFPB Ruling

Court Describes Circuitous Route of NFL Concussion Litigation, Other Claims, to Recent CFPB Ruling

As described here, a federal court this month ruled that the structure of the Consumer Financial Protection Bureau is unconstitutional. The court nonetheless denied the motion to dismiss by litigation funding company RD Legal Funding, because it ruled that the New York Attorney General had authority to challenge the transactions between RD and personal injury victims, including ex-National Football League players. U.S. District Court judge Loretta Preska also described the circuitous route by which she was asked to address the…

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In Litigation Over Litigation Funding Matters, Court Rules that CFPB’s Structure Is Unconstitutional

In Litigation Over Litigation Funding Matters, Court Rules that CFPB’s Structure Is Unconstitutional

The structure of the Consumer Financial Protection Bureau is unconstitutional, and therefore claims of federal law violations against a litigation funding company fail. So ruled a U.S. District Court judge in a lawsuit brought by the CFPB and the New York Attorney General against a litigation funding company over, for one, the litigation funding company’s dealings with former National Football League players and, for another, the company’s transactions with individuals who suffered injuries as a result of the September 11,…

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