Factoring Company’s ‘Exploitation’ of Payee’s ‘Sense of Desperation’ Leads Bay State Court to Rejected Proposed Settlement Payment Transaction

Factoring Company’s ‘Exploitation’ of Payee’s ‘Sense of Desperation’ Leads Bay State Court to Rejected Proposed Settlement Payment Transaction

The “severity” of a factoring company’s “exploitation” of a structured settlement payee’s “sense of desperation” lead a Massachusetts judge to reject a proposed transfer of structured settlement payment rights that the judge said had the hallmarks of a usurious loan. Boston Superior Court Judge Robert B. Gordon, in In Re J.G. Wentworth Originations, LLC (Laudano), Opinion No.: 137624, Docket Number: SUCV2017-02188-C, 2017 Mass. Super. LEXIS 119 (Mass. Super. Ct. Aug. 11, 2017), reviewed the proposed transaction, whereby payee N. Laudano…

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Will 19-Year-Old, Employed in Cannabis Business, Use Factoring Proceeds to Buy Land? Unclear, Says Judge in Rejecting Transaction

Will 19-Year-Old, Employed in Cannabis Business, Use Factoring Proceeds to Buy Land? Unclear, Says Judge in Rejecting Transaction

The reason that a 19-year-old California man gave for seeking to sell more than $900,000 in future structured settlement payments – in exchange for a present sum of about $186,000 – was that the proceeds of the sale would be used “for his best interest, such as Purchase Land.” That was not sufficient for the court to give the go ahead and allow the man – who “is employed, earning $3,250 per month cultivating, growing, harvesting, analyzing and storing cannabis” – to sell those…

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‘Impulsive’ Transaction ‘Is Diametrically Opposed To The Very Purpose’ of New York’s Structured Settlement Protection Law, Says Court

‘Impulsive’ Transaction ‘Is Diametrically Opposed To The Very Purpose’ of New York’s Structured Settlement Protection Law, Says Court

An “impulsive transfer” of structured settlement payment rights was unrelated to any “real urgency” and, in fact, was “diametrically opposed to the very purpose of the” New York structured settlement protection act, an Empire State judge said in a recent opinion. New York Justice Peter J. Kelly issued the opinion in Matter of J.G. Wentworth Originations, LLC (McMichael), 2000-59/A, 2017 N.Y. Misc. LEXIS 2915, 2017 NY Slip Op 50989(U) (N.Y. Sup. Ct. Aug. 2, 2017), about a payee, Nigel Criss, and…

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Life Partners Bankruptcy Provides Litigator with Strange Day in Court

Life Partners Bankruptcy Provides Litigator with Strange Day in Court

Law360 publishes a regular series of articles about lawyers’ unusual or interesting experiences.  Last month, the publication ran a piece entitled “My Strangest Day In Court: The Life Partners Bankruptcy”, by Texas attorney Joseph Wielebinski.  Among his observations were the following: In 1992, Life Partners Inc. (LPI) began developing a multilevel marketing network to sell a life insurance derivative known as a ‘viatical.’  . . . . These life insurance products essentially pit investors against life insurance companies.  The investors…

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Vermont Supreme Court Says Judges Must Consider ‘All’ Best Interest Factors in Structured Settlement Protection Act Proceedings

Vermont Supreme Court Says Judges Must Consider ‘All’ Best Interest Factors in Structured Settlement Protection Act Proceedings

The Vermont Structured Settlement Protection Act, like all of the 49 state structured settlement protection acts (SSPAs), says that a transfer of settlement payment rights is not effective unless it complies with statutory requirements, including the requirement that a judge approve the transfer. The Vermont SSPA also provides that a judge can approve a transfer only if it finds that the transfer is in the best interest of the payee, “considering all relevant factors, including: (A) the payee’s ability to understand…

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In One of Several Lawsuits Against Factoring Company, Maryland Attorney General Weighs In on Proposed Settlement of Class Action

In One of Several Lawsuits Against Factoring Company, Maryland Attorney General Weighs In on Proposed Settlement of Class Action

The Maryland Attorney General’s office has sought to weigh in on a proposed settlement of a class action against factoring company Access Funding, with the AG saying that the structured settlement payees who make up the class should receive more compensation that the proposed deal calls for. That’s the gist of a Baltimore Sun report (Attorney General’s office and attorneys spar over settlement for lead victims, by reporter Carrie Wells) that appeared today, which is the date of a scheduled hearing…

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Finding Violation of New York’s Champerty Laws, Federal Court Dismisses Fair Debt Collection Practices Act Lawsuit

Finding Violation of New York’s Champerty Laws, Federal Court Dismisses Fair Debt Collection Practices Act Lawsuit

Agreements among a credit repair organization, a law firm, and a New York woman were unenforceable or otherwise ran afoul of the law, a federal court ruled this week.  The reasons?  The credit repair organizations agreement with the woman violated a federal statute, and an agreement with the law firm violated New York’s champerty laws and other rules, the court said. Judge Robert W. Sweet, of the U.S. District Court for the Southern District of New York, issued the July 17…

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‘Coma’ Meets ‘The Big Short’: Financial Advice Columnist Opines That Life Settlements Business Seem to Attract ‘Fraud and Financial Blowups’

‘Coma’ Meets ‘The Big Short’: Financial Advice Columnist Opines That Life Settlements Business Seem to Attract ‘Fraud and Financial Blowups’

The life settlements industry “seems to attract both fraud and financial blowups” and should be avoided by investors. So says a financial advice columnist, Michael Taylor, who points to the fraud and “financial blowups” as the rationale to avoid the investment, rather than the “ick factor” of investing in death. In his July 7 column, he also says that he “decided long ago that when I write my first novel – a financial thriller obviously – the main plotline will involve a hedge…

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Texas Amends Structured Settlement Protection Act To Allow Redaction of Payee Names, Other Information

Texas Amends Structured Settlement Protection Act To Allow Redaction of Payee Names, Other Information

The Texas Structured Settlement Protection Act has been amended, and the new provisions are unique about the 49 state SSPAs. Each SSPA provides that an individual payee – the person entitled to receive future payments pursuant to the terms of a structured settlement – can only sell the future payment rights to a purchasing company (usually called a factoring company) when and if a judge reviews the transaction and approves the sale based on a determination that the transfer is in…

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New York Times: ‘High-Risk’ Viaticals May Have Contributed to Debt Problems for Virgin Islands

New York Times: ‘High-Risk’ Viaticals May Have Contributed to Debt Problems for Virgin Islands

The pension system for the Virgin Islands has been “chasing high returns by investing in high-risk assets, like a $50 million placement in life viaticals — an insurance play that is, in effect, a bet that a selected group of elderly people will die soon.” That is a line from an article with the headline After Puerto Rico’s Debt Crisis, Worries Shift To Virgin Islands, available here.