What If A Factoring Company Tries To Buy Payments That Don’t Exist? Court Dismisses Petition By Factoring Company

What If A Factoring Company Tries To Buy Payments That Don’t Exist? Court Dismisses Petition By Factoring Company

A structured settlement factoring company filed a petition for approval of a transfer of the right to receive future structured settlement payments.  The petition alleged that the proposed transfer from the payee to the factoring company would meet the requirements of the New York Structured Settlement Protection Act, which provides that such transactions are not legally effective unless and until a court approves the transfer based on a finding that the transfer meets the requirements of the New York SSPA.

But what happens if the factoring company says it wants to buy payments that do not exist?

That appeared to make it any easy decision for the court in the case captioned In The Matter Of The Petition Of J.G. Wentworth Originations, LLC v. Haines, Index No.: 3759/18, Supreme Court, Queens County, N.Y. (N.Y. Sup. Ct. June 22, 2018), as the judge, in a 2-page opinion, dismissed the petition.

The court said that the structured settlement agreement does “not provide for payments” which the factoring company is seeking to purchase.

That was not all that the court said, though.  In addition, “based on the information submitted”, even if the payments exists, a sale of future structured settlement payments in the aggregate amount of $722,960.99 in exchange for a present-day payment by the petitioning factoring company to the payee of $25,000 “is not in the best interest of the payee.”

So, if the payments identified in the petition do not match the payments in the settlement agreement, dismissal of the petition is warranted, as the judge in the Haines matter concluded.

 


 

 

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