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Revised Connecticut Structured Settlement Protection Act Goes Into Effect, Addressing Probate Matters

Revised Connecticut Structured Settlement Protection Act Goes Into Effect, Addressing Probate Matters

The Connecticut Structured Settlement Protection Act is one of 49 state statutes that provide that a transaction involving the sale or loan or the right to receive future structured settlement payments is ineffective unless the purchaser meets certain requirements such as providing a disclosure statement to the individual seller. Perhaps the most important requirement is that the purchaser (the “transferee”, in the words of the statute, which is usually a factoring company) must begin a court proceeding and bring the transaction before…

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Class-Action Complainant Alleges Scheme By Factoring Companies, With Virginia Judges, To Deprive Structured Settlement Payees of Rights to Counsel, Rights to Future Payments

Class-Action Complainant Alleges Scheme By Factoring Companies, With Virginia Judges, To Deprive Structured Settlement Payees of Rights to Counsel, Rights to Future Payments

A putative class-action plaintiff filed a complaint last week alleging that some Virginia judges were complicit in a scheme, arranged by factoring companies and their lawyer, that was designed to deprive structured settlement payees of their rights – namely, their rights to get legal advice about proposed sales of payment rights to the companies, their rights to having an impartial arbiter decide whether sales of the payees’ payments met statutory standards, and their rights to the payments themselves. The lawsuit…

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Oregon Appellate Court Enforces Contractual Anti-Assignment Provision to Preclude Structured Settlement Factoring Transaction

Oregon Appellate Court Enforces Contractual Anti-Assignment Provision to Preclude Structured Settlement Factoring Transaction

An Oregon appellate court recently gave effect to a contractual anti-assignment provision to preclude a structured settlement factoring transaction. In Johnson v. J.G. Wentworth Originations, LLC, 284 Ore. App. 47, 2017 Ore. App. LEXIS 280  (Ore. Ct. App. Mar. 1, 2017), the Oregon Court of Appeals reversed a trial court’s decision to approve a transfer of structured settlement payment rights, saying that the insurer with payment obligations had the right to enforce the contractual prohibition against such a transfer. The decision…

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IRS Memorandum About Structured Settlement Protection Acts Takes Aim at Forum-Shopping by Factoring Companies

IRS Memorandum About Structured Settlement Protection Acts Takes Aim at Forum-Shopping by Factoring Companies

An Internal Revenue Service memorandum appears to be aimed at discouraging factoring companies from forum shopping when seeking to obtain statutorily-required court approval of transfers of structured settlement payment rights. In a January memorandum, the IRS said that the Internal Revenue Code’s excise tax, imposed by Section 5891 of the Code, may apply when the factoring company obtains court approval from a state other than the payee’s domicile state. Section 5891 provides that a factoring company must pay an excise…

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New Mexico Court Rejected Factoring Deal, Awards Attorneys’ Fees ‘As of Right’ to Insurer Because of Factoring Company’s Non-Compliance

New Mexico Court Rejected Factoring Deal, Awards Attorneys’ Fees ‘As of Right’ to Insurer Because of Factoring Company’s Non-Compliance

In a 2015 opinion that was recently published on Westlaw, a New Mexico trial court rejected a proposed transfer of structured settlement payment rights because it was not in the payee’s best interest. The court also awarded attorneys’ fees to the structured settlement obligor and annuity issuer, based on the factoring company’s failure to comply with the requirements of the New Mexico Structured Settlement Protection Act. Moreover, the issuer and obligor were entitled to such fees “as of right”, due to…

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Wall Street Journal Focus Turns to Structured Settlement Factoring

Wall Street Journal Focus Turns to Structured Settlement Factoring

The Wall Street Journal last week published an article focusing on structured settlement factoring, starting with the story of Terrence Taylor. Taylor, Journal reporter Leslie Scism wrote, lost a leg and fingers in childhood fire, and his lawyers “crafted a multimillion-dollar legal settlement to ensure he had steady income for life.”  However, “[i]t didn’t take much for him to lose it.”  Taylor, wrote Scism, sold his payment rights in a “rapid-fire” series of transactions with five factoring companies – and he…

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No Interest In Annuity, So Nothing To Assign

No Interest In Annuity, So Nothing To Assign

Under structured settlement protection acts, a transfer of an individual payee’s right to receive structured settlement payments becomes legally effective only when and if a court approves the transfer. Those forty-eight states with structured settlement protection acts recognize, in those statutes, that the property being transferred by such court approval is the right to receive payments under the structured settlement agreement – and not under the annuity that is the asset that typically funds the payments. That recognition items from…

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Revised Oregon SSPA Also Includes New Professional Advice, Cooling Off Provisions

Revised Oregon SSPA Also Includes New Professional Advice, Cooling Off Provisions

The Oregon Structured Settlement Protection Act (“Oregon SSPA”) is one of forty-eight state structured settlement protection acts (SSPAs) – every state has one, except for Wisconsin and New Hampshire. Dating back to 2005, the Oregon SSPA originally followed, for the most part, the model legislation that is in place (with some modifications) in most states. Last year, the Oregon legislature decided to revise the Oregon SSPA, and the revisions were signed into law and went into effect January 1, 2014….

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Oregon SSPA Adds New Findings As Prerequisites To Factoring Approval

Oregon SSPA Adds New Findings As Prerequisites To Factoring Approval

The revised Oregon Structured Settlement Protection Act (“Oregon SSPA”) went into effect with the first of the year, and the statute now includes additional requirements about the things that must be included by factoring companies in SSPA petitions (as described here), about evidence that courts may want to consider at the hearing (as described here), and about considerations courts may want to take into account as part of the “best interest” and “fair and reasonable” considerations (as described here). The Oregon SSPA also…

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Oregon Structured Settlement Protection Act Now Includes Non-Exhaustive List Of Factors To Consider In Reviewing Factoring Deals

Oregon Structured Settlement Protection Act Now Includes Non-Exhaustive List Of Factors To Consider In Reviewing Factoring Deals

The Oregon Structured Settlement Protection Act (“Oregon SSPA”) has now been revised, effective this month, and includes additional requirements concerning the information factoring companies must include in petitions (as described here) and a description about evidence that court may want to consider at the hearing (as described here). In addition, the new Oregon SSPA includes a list of considerations that the court may want to take into account – or, as the revised Oregon SSPA states, “when determining whether the…

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