As discussed here, New York's structured settlement protection act (SSPA) now requires that a factoring company seeking court approval of a structured settlement payment transfer must inform the court about "whether there have been any previous transfers or applications for transfer . . . ."
Many court opinions involving SSPA matters have noted the significance of information about prior transfers – and many also have pointed out that the factoring company has been less than forthcoming about such information.
In the last few months, the following opinions - from just one state - focus on the issue:
- "The Court notes that a previous application, which was not mentioned by . . . the petitioner . . . was made for the sale of the same payments . . . . The prior application was denied . . . . Upon reviewing the submissions [for the latest transfer request], which were nearly identical to the prior application, the petitioner failed to establish that the 18.36% discount rate applied against the funds sought to be transferred is fair and reasonable . . . ." Washington Square Financial, LLC v. Allstate Assignment Co., No. 9605/2010, 29 Misc.3d 1204(A), 2010 WL 3834000 (N.Y. Sup. Ct. Oct. 1, 2010).
- "[T]his is the third application made on behalf of Mr. Davis to transfer his future structured settlement payments. . . . [T]he second application failed to apprise the Court of the first while the third application failed to disclose the denial of the second." In re Prudential Ins. Co. of America (Tyler Davis), No. 2010-1233CV, 29 Misc.3d 1203(A), 2010 WL 3786188 (N.Y. Sup. Ct. Sept. 27, 2010).
- "Neither petitioner nor the attorney for the proposed transferee have disclosed to the Court that in 2007, petitioner assigned to the same transferee, 180 payments of $400.00 each and two lump sum payments of $25,000.00, each due December, 2008 and December, 2013, and what the proceeds of that transfer were used for." In the Matter of the Petition of James L. Jacobs and Settlement Funding of New York, LLC, No. 014033/10, 2010 WL 3613471 (N.Y. Sup. Ct. Sept. 13, 2010).
In each of the three 2010 opinions, the courts denied the latest requests for court approval of structured settlement transfers.