Browsed by
Category: Structured Settlements

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…

Read More Read More

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…

Read More Read More

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…

Read More Read More

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…

Read More Read More

CFPB Sues Pension Factoring Companies Over Misleading Business Practices

CFPB Sues Pension Factoring Companies Over Misleading Business Practices

The Consumer Financial Protection Bureau this month sued a group of pension advance company over allegedly misleading practices. The CFPB alleges that the companies violated the Consumer Financial Protection Act of 2010, 12 U.S.C. § 5536(a)(1)(B), by representing that their pension advances were not loans, were not subject to lending laws, and “were comparable in cost to, or cheaper than, credit card debt when, in actuality, the pension-advance products were loans, and were subject to interest rates that were substantially…

Read More Read More

Lawsuit Alleges Financial Advisers Should Have Known Investments With Pension Factoring Company Were Questionable, Says News Report

Lawsuit Alleges Financial Advisers Should Have Known Investments With Pension Factoring Company Were Questionable, Says News Report

The Pittsburgh Post-Gazette today reported that a recently-filed lawsuit alleges that financial advisers and others should have known that investments in a pension-factoring company were questionable. In the story (Investors, Regulators Can’t Find Architect Of Massive Pension Scheme, available here), Len Boselovic reports that “Scott Kohn, an ex-felon who orchestrated a nationwide scheme that victimized retirees as well as investors seeking safe monthly income, is nowhere to be found.” Boselovic said that officials “from Pennsylvania’s Department of Banking and Securities trying…

Read More Read More

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….

Read More Read More

Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

Wall Street Journal: Secondary Insurance Market Company Disappears, Leaving Investors Stranded

The Wall Street Journal recently reported that Future Income Payments, LLC, has apparently collapsed and left investors “stranded.” In an article published July 24 (here), the Journal last month said that the company “appears shut” and the man who ran it, Scott Kohn, has disappeared. The Journal said that Kohn was a  “64-year-old felon” who “ran a company from a Nevada strip-mall mailbox” and that investors now say the company “took them for more than $100 million in losses.” Said…

Read More Read More

While Pennsylvania Law Requires That Court Be Given Accurate Details About Settlement Factoring, Vigilant Judge May Be The Best Protection Against ‘Unreliable’ Information

While Pennsylvania Law Requires That Court Be Given Accurate Details About Settlement Factoring, Vigilant Judge May Be The Best Protection Against ‘Unreliable’ Information

The Pennsylvania Structured Settlement Protection Act is the statute that led to a request for judicial approval of a proposed transaction involving a Penn State University sexual abuse settlement. That matter, described in more detail here, led a Pennsylvania judge this month to reject to purchasing company’s “abysmal” deal. The Pennsylvania Structured Settlement Protection Act, like all forty-nine state SSPAs, provides that a structured settlement payee (like the victim in the Penn State case) can sell the rights to future…

Read More Read More

Like Sharks ‘With Blood In The Water’: News Report Says Judge Criticizes Factoring Company For ‘Abysmal’ Structured Settlement Transfer Proposal And ‘Completely Unreliable’ Court Filings

Like Sharks ‘With Blood In The Water’: News Report Says Judge Criticizes Factoring Company For ‘Abysmal’ Structured Settlement Transfer Proposal And ‘Completely Unreliable’ Court Filings

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…

Read More Read More