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Author: Peter Vodola

Reardon Scanlon’s Partner Pointed Out, and Judge Agreed: No Independent Professional Advice Where Factoring Company Referred – and Was Going To Pay – Adviser

Reardon Scanlon’s Partner Pointed Out, and Judge Agreed: No Independent Professional Advice Where Factoring Company Referred – and Was Going To Pay – Adviser

As discussed in several recent Secondary Insurance Market Blog posts (here, here, here, and here), “independent professional advice” can be an important concept in the statutory scheme established by structured settlement protection acts for regulation of transfers of future structured settlement payments. While most of the 49 state SSPAs provide that a payee may waive the right to receive such advice, there are some state SSPAs that do not allow for waiver, and instead require that a payee receive such advice…

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Advice From Relatives Is Not ‘Independent Professional Advice’ About A Proposed Transfer Of Settlement Payments

Advice From Relatives Is Not ‘Independent Professional Advice’ About A Proposed Transfer Of Settlement Payments

Some state structured settlement protection acts provide that, for a court to approve a transfer and give legal effectiveness to a transaction, the payee must first receive independent professional advice from a lawyer, accountant, or other professional. The Ohio Structured Settlement Protection Act, before it was revised last year, was one such statute.  One Ohio court had to face the question of whether advice from relatives constituted “independent professional advice” under the Ohio SSPA.  Unsurprisingly, the court rejected that idea,…

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If Adviser Is To Be Paid From Proceeds Of Transfer, Advice Is Not Independent And Structured Settlement Protection Act Standards Have Not Beet Met

If Adviser Is To Be Paid From Proceeds Of Transfer, Advice Is Not Independent And Structured Settlement Protection Act Standards Have Not Beet Met

What happens if a payee receives the advice of a professional advisor about a proposed transaction, and the advisor’s compensation depends on whether the transaction happens? If the transaction is a proposed transfer of structured settlement payment rights under the Minnesota Structured Settlement Protection Act, then the deal cannot receive court approval and thus will never be a legally effective transaction. That was the opinion in a 2011 opinion of a Minnesota trial court, Teasley v. Velardi, No. 27-CV-1473, 2011…

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Under Some State Structured Settlement Protection Acts, A Payee Must Receive Independent Professional Advice, As One Minnesota Appellate Opinion Illustrates

Under Some State Structured Settlement Protection Acts, A Payee Must Receive Independent Professional Advice, As One Minnesota Appellate Opinion Illustrates

Most structured settlement protection acts provide that a transfer of the right to receive a future structured settlement payment is effective only when a court approves a transfer based on findings that (1) the transfer is in the payee’s best interest, (2) the transfer does not contravene a court order or statute, and (3) the payee has received independent professional advice, or knowingly, and in writing, waived the right to receive such advice. As to that last requirement, a New…

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Georgia Supreme Court Says Terms Of Litigation Funding Agreement Show That Arrangement Is Not Subject to Usury, Payday Lending Laws

Georgia Supreme Court Says Terms Of Litigation Funding Agreement Show That Arrangement Is Not Subject to Usury, Payday Lending Laws

The headline reads “Litigation funding not subject to Georgia’s interest rate laws, state Supreme Court rules.” And it is true that the Georgia Supreme Court ruled in favor of a litigation funding company, on the grounds that the state’s usury or payday loan laws did not apply. But the terms of the litigation funding agreements were the basis for the conclusion that the statutes were inapplicable, and had those terms been different – such as if the terms required repayment…

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Federal Appeals Court Affirms Conviction In Case Arising From Viatical Ponzi Scheme

Federal Appeals Court Affirms Conviction In Case Arising From Viatical Ponzi Scheme

The Eleventh Circuit Court of Appeals last week affirmed the criminal conviction of an attorney who had been involved in a viatical company’s Ponzi scheme. The federal appeals court affirmed the conviction of Anthony Livoti, outside counsel for Mutual Benefits Corporation, concluding that the federal government had presented sufficient evidence for the jury to convict him of two counts of mail fraud, conspiracy to commit mail and wire fraud, and conspiracy to commit money laundering.  He had appealed his conviction,…

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By Allowing Litigation Funder to Recover From Ex-Player, Judge’s Ruling In NFL Concussion Litigation Both Raises Questions While Pointing To Possible Answer

By Allowing Litigation Funder to Recover From Ex-Player, Judge’s Ruling In NFL Concussion Litigation Both Raises Questions While Pointing To Possible Answer

As described here, the judge overseeing the $1 billion settlement of claims by ex-National Football League players against the NFL ordered attorneys for the ex-players to disclose information about prohibited litigation funding agreements. The same judge, Anita B. Brody, in December, 2017, had ruled that litigation funding agreements were violative of the court’s order approving the settlement. One litigation funding company appealed that ruling (see here). The December 2017 ruling did not go as far as it could have, in that…

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Attorney Appearing With Payee Was Paid By Factoring Company, So No ‘Independent Professional Advice’ Under New York’s Structured Settlement Protection Act

Attorney Appearing With Payee Was Paid By Factoring Company, So No ‘Independent Professional Advice’ Under New York’s Structured Settlement Protection Act

As described here, a New York court recently rejected a request for factoring company approval of a transfer of structured settlement payment rights, where an 18-year-old high school student would have sold future payments with a face value of more than $690,000, in exchange for about $265,000. One notable aspect of the court’s ruling in the case (captioned In the Matter of the Petition of American Farms, LLC For Approval of the Transfer of Structured Settlement Payment Rights In Accordance…

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Noting That Wheels Of $600,000 Deal Started Turning Within Two Weeks Of Payee’s 18th Birthday, New York Court Rejects Structured Settlement Factoring Company’s Request For Judicial Approval

Noting That Wheels Of $600,000 Deal Started Turning Within Two Weeks Of Payee’s 18th Birthday, New York Court Rejects Structured Settlement Factoring Company’s Request For Judicial Approval

A structured settlement was set up for payee Daijuan Matos in 2008.  He turned 18 in 2018.  Within two weeks of his 18th birthday, and while he was still in high school, he had not only been approached by a factoring company seeking to purchase his future payments, but had agreed to sell a portion of those payments.  Under the terms of the deal he agreed to, he would sell $1,917.48 out of each payment of $2,750.00 due to be…

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Court Reverses Course, Strikes State Attorney General’s Lawsuit Against Litigation Funder Over NFL, 9/11 Responder Transactions

Court Reverses Course, Strikes State Attorney General’s Lawsuit Against Litigation Funder Over NFL, 9/11 Responder Transactions

A federal court that previously ruled  that the structure of the Consumer Financial Protection Bureau is unconstitutional, while allowing the New York Attorney General to proceed with claims in the same lawsuit, now has reversed course, and dismissed the New York AG’s claims against a litigation funding company accused of scamming 9/11 responders and ex-professional football players. In a September 12 ruling, Judge Loretta Preska dismissed the New York Attorney General’s federal and state law claims against RD Legal Funding over…

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