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 in the Penn State University sexual abuse scandal, and settled his personal injury claim just last year.
The report said that Judge William P. Mahon of the Chester County Court of Common Pleas “angrily dismissed” the petition – filed pursuant to the Pennsylvania Structured Settlement Protection Act (SSPA) – by a factoring company named Liberty 1776 Funding Group.
Liberty 1776 Funding had proposed a transfer whereby it would purchase $2.99 million in future structured settlement payments from the personal injury victim, and in exchange pay him $850,000.
The Pennsylvania SSPA provides that transactions where a structured settlement payee would sell the rights to future payments to a purchasers, do not become legally effective unless they are reviewed by a court and the court determines that the transaction is in the payee’s best interest.
Judge Mahon “found that the man’s affidavit in the petition — it was the third filed on his behalf by firms attempting to gain access to the settlement funds in exchange for an immediate payout — was riddled with sketchy assertions about his financial well-being that were contradicted by statements the man made in court”, according to the newspaper’s account.
The newspaper quoted the judge as saying that “[t]hese petitions are completely unreliable”, that Liberty 1776 Funding’s proposed deal was “abysmal”, and that “that the number of firms out to gain access to the settlement was like ‘sharks with blood in the water.’”
The Daily Local News withheld the man’s name based on its policy of not publicly identifying victims of sexual assaults unless given consent, but did state that the structured settlement was one of the settlements entered into by Penn State with more than two-dozen victims of the college’s former football assistant coach Jerry Sandusky’s sexual assaults. Six years ago, Sandusky was sentenced to be incarcerated for 30 to 60 years for sexually molesting, over a 15-year period, children who he met through his work involving a charity organization; he has appealed his conviction.
The newspaper reported that the payee whose proposed transaction with Liberty 1776 Funding was before Judge Mahon “acknowledged that he had been awarded a $1 million payout in addition to the settlement payments, but had blown through that money in 18 months” and now wanted immediate funds for his tree trimming business and to help his wife expand her beauty salon. But some of the information provided to the court by Liberty 1776 Funding was contradictory, according to the report.
The news story can be found in full here.