As described in this post, the state of Minnesota has revised its structured settlement protection act to require that courts be provided with information about prior transfer attempts by the same payee.
Thus, when a factoring company files a petition seeking court approval, under the Minnesota SSPA, of a proposed transfer of structured settlement payment rights, the company must include with the petition certain details about any transfers, or attempted transfers, involving the same payee.
In particular, the revised Minnesota SSPA says that a petition must include “notification of the date and judicial district of any prior application for transfer filed by the transferee relating to a prior proposed transfer with the payee, including whether the prior application was granted or denied.” In addition, the new provision states that “[i]f any prior application was granted, the notice shall provide the amount and due dates of any structured settlement payments that were transferred, the aggregate amount of the payments, the discounted present value of the payments, and the gross amount that was payable to the payee in exchange for the payments.”
This is useful information for a court that is reviewing a proposed transfer; in fact, some have said that this is necessary information.
However, a word of caution is in order. Those familiar with factoring company arguments have said that the companies say that the way to read the newly revised statute is that the factoring company must provide information about “the aggregate amount of the payments, the discounted present value of the payments, and the gross amount that was payable to the payee in exchange for the payment” for all prior approved transfers, but need only reveal to the court details about prior transfer attempts – when those attempts did not result in a court-approved transfer – if the attempt involved the same factoring company as the petitioner.
Judges who become aware of this too-clever-by-half argument will likely have something to say about the need for candor with the courts. Indeed, in other jurisdictions, more and more courts have had to address this issue, and have told factoring companies that the requirements for such information can only be met by filing with the court documents that include any prior orders – whether approving or denying transfer petitions – as well as, in some cases, providing other information.
One more note about Minnesota has to do with advertising. Specifically, advertising in the online version of the Star-Tribune, which ran an article titled “Law Will Monitor Cash Outs” on the new Minnesota SSPA legislation. (Follow the link to the prior Secondary Insurance Market Law post, “Minnesota’s Structured Settlement Protection Act Is Revised To Make Sure Judge’s Get Information About Prior Transfers“; there is a link to the Star Tribune article at the end of the post.) In the online version, the article includes ads that appear in boxed within the text – ads for factoring companies. While newspapers these days mayneed all the revenue they can generate, such placement leaves something to be desired.