Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary

11th Circuit Appellate Court Rules CEO of Shuttered Factoring Company MUST Pay IRS Penalties

by Structured Settlement Watchdog

The Coronavirus may be waning, but the "Kroner-IRS"  continues.  

Burt Kroner, the CEO of recently shuttered Boca Raton Florida structured settlement factoring company Client First Funding, failed

Burt Kroner was banged up by the 11th Circuit 

to report millions of dollars in income. After an audit, an IRS examiner sent him a letter that said Kroner owed penalties on top of his back taxes. See 26 U.S.C. § 6662. Kroner tried to negotiate without success; the examiner's direct supervisor signed a second letter, which proposed the same penalties, as well as a form approving those penalties.

See my prior post of June 7, 2020 for further background details

Client First Settlement Funding CEO Loses "KronerIRS" Re $24.77M Transfers But Avoids Penalties - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

Since then

Eventually, after more failed negotiation, the IRS issued Kroner a statutory notice of deficiency, which triggered his right to petition the Tax Court for review. The Tax Court disallowed the penalties, holding that the supervisor's approval came too late because she had not approved the penalties at the time of the first letter.

The IRS appealed, arguing that the Tax Court misinterpreted Section 6751(b)'s requirements. The IRS prevailed against Burt Kronor.

Burt Kroner v. Commissioner, No. 20-13902 (13 September 2022) 11th Circuit REVERSES Tax Court: IRS CAN Impose Penalty on Millions in Unreported Income

In May I reported receiving phone calls from a number of investors missing payments from factored structured settlement payments from Symetra that were being serviced by Client First. Eventually they were paid. At this point if you are missing paymnets contact the annuity issuing life insurance company.

Client First Funding | Business Listing Says Permanently Closed | What If You Have Payments? - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

 

SC Structured Settlement Factoring BOMBSHELL | Chief Justice VACATES Referees & Masters-in Equity-Orders

by Structured Settlement Watchdog

For the last week or so we've been covering the McClatchy news bombshell reports about South Carolina structured settlement factoring. Now it appears that South Carolina's Chief Justice isn't wasting any time in taking action to investigate the structured settlement factoring mess.

Read Order of Donald W. Beatty Chief Justice dated September 7, 2022

Pursuant to Article V, Section 4 of the South Carolina Constitution,

IT IS ORDERED that all matters related to S.C. Code Ann. § 15-50-40 (2005) shall not be referred to Masters-In-Equity or special referees until further order of the Chief Justice.  All pending orders referring these matters to Masters-In-Equity or special referees are hereby vacated.

IT IS FURTHER ORDERED that all Clerks of Court statewide shall, within five business days of the date of this order, identify all pending matters involving structured settlements for which a Master-In-Equity or special referee has been appointed and forward a list of those matters to their respective Chief Judges for Administrative Purposes. 

The provisions of this order are effective immediately and remain in effect unless amended or revoked by subsequent order of the Chief Justice.

s/Donald W. Beatty                                    Donald W. Beatty Chief Justice of South Carolina

Columbia, South Carolina
September 7, 2022

 

                                             refers to Powers of Chief Justice; Rules; Admission to Practice of Law and Discipline of Persons Admitted

The Chief Justice of the Supreme Court shall be the administrative head of the unified judicial system. He shall appoint an administrator of the courts and such assistants as he deems necessary to aid in the administration of the courts of the State. The Chief Justice shall set the terms of any court and shall have the power to assign any judge to sit in any court within the unified judicial system. Provided, each county shall be entitled to four weeks of court each year and such terms therefore shall be provided for by the General Assembly. Provided, further, that the Chief Justice shall set a term of at least one week in any court of original jurisdiction in any county within sixty days after receipt by him of a resolution of the county bar requesting it. The Supreme Court shall make rules governing the administration of all the courts of the State. Subject to the statutory law, the Supreme Court shall make rules governing the practice and procedure in all such courts. The Supreme Court shall have jurisdiction over the admission to the practice of law and the discipline of persons admitted.

One reasonable reaction is that plenty of people who really need the money are going to get screwed now. 

Weren't many of them already being screwed by the bad behavior that led to the the bombshell reports in South Carolina?  

Murdaugh and Mayhem | Client of Color Ripped Off Then Factoring Cos. Churned His 6 Children's Structures

by Structured Settlement Watchdog

The next installment of McClatchy's bombshell exposé about structured settlement factoring in South Carolina continues and the trail leads to Alex Murdaugh, Palmetto State Bank and then pivots to more huge problems with enforcement (or lack thereof)) by judges that seems to need a smidgen of rubbing their noses in the consequences of their inactions and apparent lack of effort. And then a surprise connection of dots.

Murdaugh and Mayhem

Alex Murdaugh, along with former Palmetto State Bank CEO Russell Laffitte, quietly stole more than $1.3 million from Donna Badger's estate, where the 2012 settlement money from a worngful death lawsuit had been placed, according to state and federal indictments.  Murdaugh faces 79 charges related to theft of nearly $9 million from clients, according to a May 2022 news report. Murdaugh was previously indicted for the murders of his wife and son in 2021.

More than $1.3 million had been set aside for him in his late wife’s estate from the wrongful death lawsuit. But he didn’t know it. Murdaugh, his attorney, never told him, according to a lawsuit Arthur filed in June. Instead, Murdaugh deceived Arthur Badger into resigning as the estate’s personal representative, while Laffitte took over, according to a complaint filed in June 2022 lawsuit against the pair and Palmetto State Bank. Then, Murdaugh and Laffitte settled the lawsuits against UPS without informing Arthur and his kids. The conspirators set up a fake structured settlement for Arthur through the bank and diverted the money at Murdaugh’s request, the complaint states.

Minors' Structured Settlement

The Badger children’s money, also received from the wrongful death lawsuit, should have been safe. Placed into financial arrangements called structured settlements, each child was to receive periodic tax-free payments — primarily in the form of monthly checks — once they turned 18. In total, $4.8 million would go to the six children over several decades.

The Badger nightmare continued as the Badger minor children's structures were allowed to be sold, approved by a judge who seems to be a favorite among several factoring companies, according to a months-long investigation by McClatchy. He hasn't denied a structured settlement transfer petition  (deal) a factoring company has brought before him during at least the past eight years, McClatchys found.

Ryan Blank/Pitchberg Funding  Yeah, of Maryland Banned JRR Funding, AnnuitySold et al.

Concurrent with the announcement of the Maryland Attorney General of a number of Ryan Blank's associated companies being banned in Maryland for 7 years for fraud in January 2018, the Owings Mills Maryland native was the registrant of another entity, Pitchberg Funding, which had a hand in dismantling of the Badger children's structured settlements. 

McClatchy was able to link Pitchberg Funding to Ryan Blank.  As we've previously reported and McClatchy reports as background to the Badger case, "the Maryland Attorney General’s Office banned Blank and several of his business associates in 2018 from doing business in the state after an investigation found they were acting deceptively in pushing structured settlement transfer deals through the courts. Blank and his partners sent thousands of mailers to structured settlement recipients that made false claims and used fake names, including a non-existent Judge Larry C. David, purportedly a reference to the famous comedian and creator of the TV show, “Seinfeld,” according to the settlement agreement outlining the investigation’s findings".

"The agreement notes that Blank and his associates dispute the findings but agreed to a resolution to avoid costly litigation. They were banned for seven years and ordered to pay restitution. Messages left for Blank and his associates were not returned. The Maryland attorney who represented them in relation to the Attorney General’s investigation also did not return a request for an interview. Arthur said he believed he was working with the same company for all of the transactions and the company representative’s signature on applications for Pitchberg and Berkman First Funding were the same. But that couldn’t be confirmed. All of the future payments were ultimately assigned to SuttonPark Capital, a Florida factoring company well-known in the industry for underwriting third-party transactions, meaning they fund other companies that solicit sellers and finalize these transactions. Representatives from SuttonPark also did not return messages seeking an interview".

The transactions involving the minor Badger children, representing a return of about 7 cents on the dollar, were among the most lopsided South Carolina deals reviewed by McClatchy, which compiled complete data for more than 1,400 transfers. There are several others that received a lesser return, including a Colleton County woman who was permitted to sell more than $1.6 million worth of future payments for $4,225 in 2019. But almost all of those deals involved life-contingent payments. That means those payments would only be distributed if the structured settlement recipient is still alive at the time they’re due. But all of the Badgers’ payments were guaranteed or certain, meaning that even if one of them died before a future payment was due, it would still get distributed to a designated beneficiary, or the Estate of the Payee as is customary if no beneficiary is designated. or not living at the time of a payee's death.

Arthur said in a July interview that he didn’t realize the dollar value of the future payments he had sold until a McClatchy reporter contacted his attorney, Mark Tinsley, wanting to speak with them for this story. South Carolina law requires factoring companies to get sellers to sign disclosure forms, listing the dollar amount they’re selling and receiving.

Blank and his partners in Maryland were found to have given sellers “insufficient time” to read terms and conditions before signing transfer agreements, according to the Attorney General’s investigation.

“I felt like I was robbed,” Arthur said about finding out he had given up millions of his children’s money. Tinsley was likewise shocked and skeptical a judge would sign off on such deals until a McClatchy reporter directed him to copies of the court filings online. “I don’t know what else to say; it’s just shocking to me, completely,” he said. It turned out the Badgers happened to live in the perfect county for factoring companies that want to get lopsided transactions approved.

 

Read more at: https://www.thestate.com/news/special-reports/article264782279.html#storylink=cp

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Structured Settlement Keep or Sell When Interest Rates Rise? Crystal Ball Persuasion

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Look over yonder
What do you see?
Interest Rates rising
Most definitely 

"Crystal Ball Persuasion" (a parody of Crystal Blue Persuasion by Tommy James & The Shondells) 

At the tail end of the 2008-2009 financial crisis,  the smoke signals wafted over from Vancouver, citing the media, predicting that interest rates were expected to rise and that you should sell your structured settlement THEN "because rising interest rates will make you poorer". Then I proceeded to "take the mickey" when the rising interest rates did not materialize. They actually got worse.  Anyone who would have sold structured settlement payments for pennies on the dollar, just for the sake of bowing to the crystal ball of persuasion to avoid loss of money, would have actually done worse by selling. 

But interest rates have been recently been creeping up and I thought it would be worth having another "look see", so that readers can see the history and learn something from this.

June 28, 2009      1O Year United States Treasury 3.487% Close

"You may have heard in the media in recent weeks that interest rates have bottomed and are slowly creeping back up. I (Proctor)believe that this is the beginning of a new cycle of incremental increases in interest rates over the next few years. When interest rates go up, the present value of a person’s structured settlement goes down. This is a simple truth. As such, if you are considering selling your structured settlement, now is the time to get the best rate".

March 26, 2010    10 Year United States Treasury 3.705% Close

The first foghorn wasn't convincing enough, so another toot was made less than a year later to attempt to COMMAND the annuitants to sell, to unsettle annuitants

"WARNING AGAIN: If you are thinking of selling your structured settlement payments, do it NOW  (the command!), before interest rate increases eat into the value of your future payments and make you poorer".  Genex Capital CEO Roger Proctor

What Actually Happened With Interest Rates?

A 13 year retrospective on the 10 Year United States Treasury  (June 28, 2009 to September 9, 2022)

Highest           4.01%

Lowest            0.32%  April 2020 during the beginning of the Covid-19 pandemic

Delta              3.69%  Difference between the highest and lowest

Average          2.237%

If confronted with a similar solicitation from a structured settlement factoring company, an important thing to consider is the Internal Rate of Return on what was paid to fund your structured settlement.  How do you do that, you say?

The chart below goes back 20 years. 

A 20 year retrospective on the 10 Year United States Treasury  (June 28, 2009 to September 9, 2022)  Source: Macrotrends

How Bad Did Annuitants who Sold Their Structured Settlement Payments Due to a Fear of Rising Interest Rates Get Screwed?

Above is the 54 year chart, alossourced from Macrotrends.com.  So if we go back to 2009 or 2010 when Genex was encouraging the sale of structured settlements for what amounted to pennies on the dollar for fear of rising interest rates, we can see that anyone being approached to sell existing structured settlement payment rights in 2009 or 2010 was likely benefiting from a higher income tax-free rate (IRR) guarantee on their existing structure. If you sold your structured settlement payments that you were established in the 1980s or 1990s and it wasn't ELNY, you would have been screwing yourself.

When you already have a structured settlement and are receiving (or scheduled to receive) steady future future periodic payments, you are lock into the rate of return. It's a strength and a weakness. The strengths outweigh the weaknesses.

 

AZ Judge DENIES Genex Capital Motion 4 Reconsideration, Favors Structured Settlement Investors

by Structured Settlement Watchdog

In a June 9, 2022 under advisement ruling, the Court found that the Keefer (couple that invested in payments that Genex Capital confiscated in 2020) Plaintiffs are entitled to a declaration that they are the owners of and have the right to receive payments arising from the Payment Streams and that Genex has no material right, title, or interest in the Keefers’ Payment Streams.

The Court further reasoned that although the  RPA (Genex Receivables Purchase Agreement) is clear regarding the Keefers’ interest in the Payment Streams, the RPA is equally clear regarding restrictions on reassignment. Section 3.4 of the RPA states: “Buyer shall not have the right to further assign or sell the Receivable and must keep the Receivable for the balance of its term unless otherwise expressly approved by Genex.” Statement of Facts, Ex. 1, RPA § 3.4. The Court found that Genex is entitled to a declaration that the RPA does not permit reassignment of the Receivables without Genex’s consent, but DENIED all other relief.

Following the June 9, 2022 under advisement ruling, Genex Capital requested reconsideration of the ruling. On September 1, 2022, AFTER consideration of the Genex Capital motion and the response to that motion by the Keefer's, the Maricopa County Judge Danielle Viola has DENIED Genex Capital's Motion for Reconsideration.

There is a lot at stake, not just for the Keefers, who were the first investors to sue Genex Capital. There are other investors who have similar actions against Genex Capital in the consolidated Arizona litigation, who also had their payments confiscated by Genex Capital who were added to the complaint in December 2020 and others in February 2021.

Legal Battles with Investors Who Bought the Confiscated Payments Ahead?

A whole new set of investors that out there that BOUGHT payment streams that Genex Capital confiscated from original investors like the Keefers, although we ahve not found any pleadings against Genex.  

Why Investors in Others' Structured Settlement Payment Streams Need to Pay Attention 

The consolidated Arizona litigation is an important one to watch for anyone thinking about investing in structured settlement payment streams. It underscores that such investments are not annuities, have a higher risk profile than annuities, do not have the same statutory protections as annuities in 37 states (and counting) and should not be confused with annuities no matter what the marketing materials and websites the vendors of such investments may maintain.

Sometimes duck logic makes sense. When it comes to investing in other people's structured settlements, even if it vaguely resembles a duck, it doesn't feel like a duck, or quack like a duck, it's just not a duck.

 

 

Investigation Into SC Structured Settlement Factoring Predation Rolls Out in 4 Part BOMBSHELL Report

by Structured Settlement Watchdog

On September 8, 2022, the first installment was published in a 4 part syndicated bombshell expose about predatory structured settlement factoring that has gone off the rails in South Carolina.

The McClatchy newspaper analysis of more than 1,400 of these deals approved between 2014 and 2021 in South Carolina found "sellers received, on average, lump sums worth about 25% of the sold future payments. More than $228.6 million in future payments were exchanged for less than $58 million in lump sums. The discounted present value of those payments — a calculation based on a federal rate that assumes money in the future is worth less than the present — was estimated at more than $157.3 million". 

South Carolina Structured Settlement Protection Act  Title 15 Chapter 50

South Carolina law requires that each deal be approved by a judge who must find it’s in the seller’s “best interests.” But the newspaper determined that the factoring companies employ a small group of S.C. attorneys who seemed to have developed a specialty in presenting the cases before select judges who approve nearly every deal. Meanwhile, the sellers typically have no lawyer representing them in court. The cases are sometimes heard in courtrooms far from where the sellers live and the structured settlements were reached, McClatchy’s analysis found, raising questions of forum shopping and other aspects of the legality of the deals, said the report.

South Carolina Lawmakers Have Done Little to Police Factoring Companies | Stunned Into Addressing These Issues

State lawmakers have done little to police the industry says McClatchy. While the South Carolina Structured Settlement Protection Act was passed in 2002. it has never been updated, according to the report. Passing a law to protect those with structured settlements 20 years ago and continuing the status quo, despite national news stories in Maryland, Minnesosta, Virginia and Florida that have led to reforms to clamp down on the questionable practices of certain structured settlement factoring companies.

McLatchey's David Weissman reports that South Carolina legislators were stunned by McClatchey's findings and plan to follow the lead of other states in addressing these issues.  Let's hope so.  This type of story continues to play out over and over and over again all across the country. 

Say Her Name  

Grace is an African American woman who received a structured settlement for the majority of her proceeds from a train

A devastating failure

collided with her mother's carr when Grace was a child and she suffered a traumatic brain injury. The structured settlement was due to pay Grace monthly, tax-free installments for the rest of her life. The money would provide her a steady income because her traumatic brain injury was likely to limit her ability to earn her own income in the future, her family was told. Her IQ tested in the first percentile, McClatchy says the court records show. And at home, she had short-term memory loss, which remains one of several challenges.

Grace did her first factoring deal on August 1 2018, the second on August 8, 2018, the third on September 18, 2018 and her 17th factoring deal in November 2021.  That's 3 deals in 5 weeks and 17 structured settlement factoring transactions for someone with a first percentile IQ over 3 years. Read that again. McClatchey says all but one of the deals were approved by judges, while another was approved by a special referee. It's a huge WTF regulatory fail South Carolina. In fact it would be a huge WTF anywhere!

Seller's Remorse or Systemic Failure South Carolina?

When you're speaking of someone with a TBI and a first percentile IQ??  Where is the accountability of the judges?  Grace's mother said to the reporter "And I thought the whole purpose of her going through a judge was to protect her from stuff like this,” Jocelyn continued. “Obviously it ain’t. The judge didn’t serve a purpose cause anyone with common sense can see that something was happening that wasn’t supposed to. It didn’t make sense. Seventeen times?”

Some judges and referees admit they don’t ask many questions, including why a seller got the settlement in the first place, which may mask traumatic brain injuries and the need for a guardian ad litem, a court-appointed advocate who conducts an independent investigation to make a recommendation about what’s in a seller’s best interest. None of the judges or special referees Grace appeared before asked her about the train crash or her traumatic brain injury, she said, although that could not be verified because there were no transcripts, according to the McClatchy report.

McClatchy found that 94% of the structured settlement transfer petitions that reached a hearing between 2014 and 2021 were approved.  McClatchy spoke to several judges and observed that the judicial approval process seemed to be pretty arbitrary.  one judge opined that he didn't think it’s depriving … them of something against their free will,” Kimball said. “I don’t like (the deals), just seems sort of sharkish, but if a judge does what I view to be the judge’s job, … (the sellers are) entitled to make a stupid mistake. We’re all entitled to make stupid mistakes.”. 

How about someone with a first percentile IQ Judge?  Is a person with a 1st percentile IQ with no other means of support, entitled to make 17 "stupid mistakes" and then draw from taxayer funded public assistance?  Is that fiscally responsible?

Judge Approved Deal Even With Affidavit From Seller That She Had a Traumatic Brain Injury

McClatchy scrutinized court records and found that an affidavit about Grace's TBI was attached to one of the 3 cases approved by Colleton County Judge Harriet Bonds.  Good Lord!  Unfortunately Judge Bonds did not respond to arequest for an intrerview according to the McClatchy report.

Special Referee Didn't Know Grace Was in Train Wreck, Asked " Attonrey" About Seller's Education Level

Read more here at: https://www.myrtlebeachonline.com/news/special-reports/article264618911.html#storylink=cpy

 

What's the Difference between Structured Settlements and Annuities? Why JG Doesn't Get Full Marks

by Structured Settlement Watchdog

What's the difference between structured settlements and annuities?

JG Wentworth gets partial credit in a recent Facebook post, but the 800 lb gorilla gets an incomplete for dropping the banana on structured settlements:

• Annuities are an insurance product designed to secure a fixed income stream,
  starting either immediately or in the future.
• Structured settlements are a type of annuity that results from a lawsuit.

Why doesn't JG Wentworth Get Full Credit?

1. A structured settlement IS NOT an annuity

2. According to IRC 5891,  the section of the Internal Revenue Code that is the "Mack Daddy" at the core of the stuctured settlement factoring business,  JG Wentworth's business:

With all due respect to Axar, who indeed is their Daddy, what does JG Wentworth's Mack Daddy  (IRC)  say?

 

IRC 5891 (c)(1) states "The term “structured settlement” means an arrangement—

 

A) which is established by—

(i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipient under section 104(a(2), or (ii) agreement for the periodic payment of compensation under any workers’ compensation law excludable from the gross income of the recipient under section 104(a)(1), and

 

(B) under which the periodic payments are—

(i) of the character described in subparagraphs (A) and (B) of section 130(c)(2), and

(ii) payable by a person who is a party to the suit or agreement or to the workers’ compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130.

 

So no, we're NOT speaking about

1. An arrangement of flowers

2  dead gourds for the harvest arrangement (after all it is almost the season), or

3. an arrangement of music, such as the Viking chorus in JG Wetnworth's commericals

 

A structured settlement is not an annuity but it is often funded with an annuity.

 

In the context of structured settlements an annuity is one of the acceptable forms of qualified funding asset [ see IRC 130(d)]

 

 

 

 

 

 

 

 

Pavonia Life of Michigan's Greg Lindberg is SUED by SEC in $75 Million Alleged Fraud

by Structured Settlement Watchdog

The Securities and Exchange Commission (SEC) has sued North Carolina entrepreneur Gregory Lindberg for Lindberg's allegedly operating a “massive fraudulent scheme” using companies that belonged to his insurance empire. See SEC Press Release SEC Charges Advisory Firm and Executives with Devising an Elaborate Scheme to Defraud Clients Out of More Than $75 Million  

Lindberg, who bought several insurers, treated their funds “as his own assets and used the money for any purpose he decided was in his best interest,” according to the allegations in SEC suit that was filed August 30, 2022 in Federal District Court in the Middle District ofrth Carolina.  See Download SEC v Gregory LIndberg et al 8-30-2022 Middle District NC.

The suit alleged Lindberg and Christopher Herwig, a former chief investment officer for the insurers who was also named as a defendant, sold assets in one scheme and repurchased them at an inflated price. An entity that Lindberg controlled booked the $57 million difference without the boards of the insurers knowing, according to the Wall Street Journal.  

Also, $3.3 million of assets from the insurers was used to buy a personal home for Lindberg and more than $4 million went into his personal cash account, according to the Wall Street Journal.

And with this latest development the MIchigan insurance regulator is set to permit the sale of Pavonia Life Insurance Company of Michigan, another Lindberg company that reinsured a number of insurers that wrote structured settlement annuities in the 1980s and 1990s, to the company that owns JG Wentworth.

Oklahoma Judge GRANTS Retired Granny's MPSJ and DENIES Genex Capital MSJ and MPSJ

by Structured Settlement Watchdog  (UPDATED August 31, 2022)

Who's Got the Power?

Upon learning of the August 12, 2022 Pottawatomie Oklahoma District Court finding and order in favor of 86 year old retired school teacher Geraldine Yeisley, you couldn't blame her if she cranked up SNAP's " I've Got The Power" on her Harmon Kardon.

The Pottawatomie County findings and decision, broken down below, parallels a similar ruling in Arizona litigation  (Superior Court Maricopa County  CV 2020-004958), pitting the the Keefer retirees against Genex Capital and appears to significantly narrow Genex Capital claims, while exposing Genex to potential liability to the follow on investors, as I anticipated might happen in a December 28,  2020 post.  Genex Capital has requested reconsideration of the June 9, 2022  Maricopa County Arizona under advisement ruling on the matter.

Complex litigation has been ongoing between Genex Capital Corporation, a structured settlement factoring company, investors, and an intermediary pending since 2020* in Maricopa County Arizona and branching out into other states, such as Oklahoma, against Yeisley provides an illustration of what can happen. Genex Capital is litigating against multiple investors who it alleged breached its Receivables Purchase Agreement(RPA) when they sold/reassigned their receivables and did not obtain Genex's consent or go through Genex.  For Genex it has been all about the right to assign and for  the investors it's all about "The Power" to assign.

* a number of additional investors sued Genex in 2021

What Genex Capital Had Claimed

Earlier this year, Genex Capital claimed that Intervention in the matter of In re Petition for Approval of Transfer of Structured Settlement Payment Rights between Stratcap Investments, Inc. v. Nwannewuihe, Case No. 2012-CH-000229 (Ill. 7th Cir. Ct.) by investor Geraldine Yeisley, triggered default in payment of $551,000 due on May 15, 2021, resulting in Prudential Life Insurance Company’s** withholding payment pending the outcome of the litigation. Genex claimed that this "resulted in two of Genex Investors’ not receiving their respective portion of the Receivable payment. 

** believed to be The Prudential Insurance Company of America, the Prudential entity that issues structured settlement annuities that are used as qualfied funding assets in structured settlements.

"Genex’s inability to pay the two other Genex Investors as a result of the wrongful assignment of the Receivable Purchase Agreements ( RPAs) has further damaged Genex’s goodwill and reputation with investors and brokers. And make no mistake, said Roger Proctor, the $551,000.00 payment due on May 15, 2021 was due and payable to Genex and no other person as per a final and longstanding non-appealable court order". [Decl. of Roger Proctor 1/3/2022 at #79-80 p15].

FINDINGS from the August 12, 2022 Oklahoma decision  (full document below)

Genex RPA lacked restriction on"power to assign" receivables

54. For valuable consideraton received, Genex sold, assigned, transferred, and conveyed to Yeisley and Yeisley IRA all of its right, title, and interest to the Yeisley Receivables.

55. In accordance with the First RPA, Genex assigned, transferred, and set over to Yeisley all of its right and interest in a portion of the payments related to the Volpe, Nwannewuihe and Tenowich Receivables when it executed and delivered the respective Assignment of Sale and Assignment Agreements to Yeisley. 

56. In accordance with the Second RPA, Genex assigned, transferred, and set over to the Yeisley IRA all of its right and interest in a portion of the payments related to the Volpe and Nwannewuihe Receivables when it executed and delivered the respective Assignment of Sale and Assignment Agreements to Yeisley.

57. Through the Assignments of Sale and Assignment Agreements ("Assignments") and pursuant to the terms of the RPAs, Genex irrevocably assigned all of its rights, claims and causes of action which they had, may have, now and in the future, with respect to the Yeisley Receivables, including the claims now being brought against the Yeisley Defendants.

58. Genex has no right, title, or interest to the Yeisley Receivables.

59. The First RPA contains a restriction on Yeisley's right to assign but not on her power to Assign the Yeisley Receivables

60. The Second RPA does not contain a restriction on the Yeisley IRA's right or power to assign the Yeisley Receivables.

61. A termination of the RPAs does not result in a forfeiture of the Yeisley Defendant's payment rights associated with the Yeisley Receivables.

62. Genex's purported termination of the RPAs has no effect on the Yeisley Defendants' payment rights under the Assignments.

63. Genex had no right to withhold, sell, or reassign the Yeisley Receivables.

64. Genex purported reassignments of the Yeisley Receivables have no effect on the Yeisley Defendants' payment rights associated with the Yeisley Receivables and all payments/payment rights thereunder are owned by the Yeisley Defendants.

65. The Yeisley Defendants have standing to bring their claims against Genex for declaratory judgment and breach of contract.

 

ORDER

1. Defendants' Motion for Partial Summary Judgment as to their Count One is GRANTED.

2. Plaintiff's Motion ofr Summary Judgment Seeking Dismissal of Yeisley's Counterclaim is DENIED.

3. Plaintiff's Motion foir Partial Summary Judgment for Genex's First Cause of Action is DENIED.

IN THE DISTRICT COURT OF POTTAWATOMIE COUNTY STATE OF OKLAHOMA   Cause CJ-2021-115  (Judge Canavan)

GENEX CAPITAL CORPORATION a Delaware corporation, Plaintiff/Defendant on Counterclaim/Counterclaimant vs .
GERALDINE YEISLEY, individually; PROVIDENT TRUST GROUP LLC FBO R. GERALNDINE YEISLEY IRA
(Account 120300245); PROVIDENT TRUST GROUP LLC FBO R. GERALDINE YEISLEY ROTH IRA (Account 131200192); and GERALDINE YEISLEY Trustee of the GERALDINE YEISLEY REVOCABLE LIVING TRUST Defendant/Counterclaimant/ Defendant on Counterclaim, AND JIM MILLER 

Download Yeisley Grant Partial Denial of Genex Summary and Partial Summary Judgment and Granting Yeisley Partial Summary Judgement as to their Count One.

Legal Malpractice Suit Over Structured Settlement Set For Trial January 9, 2023

by Structured Settlement Watchdog  

A legal malpractice case over a structured settlement, brought by a former plaintiff against the law firm of Anapol Weiss now has a trial date of January 9, 2023. This continues our ongoing commentary.

The Backstory (Abridged Edition)

I've covered the backstory more extensively in other posts. See most recent from May 1, 2022 post  Beef Yerkes | ELNY Era Legal Malpractice Case Continues Against Anapol Weiss

Briefly, on the advice of his lawyers Eric Yerkes, a young air crash survivor, entered into a structured settlement in the 1980s, with Cessna Aircraft and its London market insurers. The structured settlement was funded with Executive Life Insurance Company of New York, a company that any savvy person would know at the time was laden with junk bonds, at a time when contemporary prime time print and TV news media had observed severe financial impairments of two other annuity issuers. Five years later, ELNY was under supervision of New York's insurance regulator. In August 8, 2013 ELNY was liquidated and restuctured into GABC, 1500 annuitants were set to receive up to 66% less than they were owed under their annuity contracts. One of those was Eric Yerkes.

Yerkes' attemp to recover from Cessna and the London market insurers failed, due to Yerkes having already released them when the qualified assignment went into effect nearly 30 years earlier. Consequently  Yerkes v Cessna became a seminal case for novation under a qualified assignment. 

Yerkes then went after his lawyers for legal malpractice based upon, among other things, alleged lawyer representations made in alleged communication with Yerkes about Cessna's and the London underwriters' post qualified assignment responsibilities  that were incorrect.

IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF NEW JERSEY
ERIC YERKES,
Plaintiff,
v.
ANAPOL WEISS,
Defendant.
Civil No. 17-2493-KMW-AMD
                                                                                              

                                                                                                                                                                                                                                                                                                                                                                                                                                            

Is Michigan's Insurance Regulator About to Put JG Wentworth in Pavonia Life Structured Settlement Hen House?

by Structured Settlement Watchdog

Despite the fact that Michigan has a Structured Settlement Protection Act, a decision soon set to be finalized by the Michigan Department of Financial Services has hastened a rash of head scratching reminscent if a dog with fleas.

Will the Michigan Department of Insurance and Financial Services' decision trigger a conga line of pennies on the dollar structured  settlement transfer activity from JG Wentworth, the USA's largest purchaser of structured settlement payment rights? Listen up Michigan trial lawyers because someone needs to pay attention what is set to go down September 16, 2022.

The Michigan Department of Insurance and Financial Services (DIFS) accepted the Pavonia Insurance Company into receivership a couple of years ago.  Pavonia Life Insurance Company of Michigan was a reinsurer that reinsured A+ or better rated insurance companies that wrote structured settlements in the 1980s and 1990s. Pavonia is currently owned by Greg Lindberg, who has his own, well-documented legal issues. To be clear, Lindberg is the beneficial owner of the largest insurance insolvency in the history of the USA, dwarfing Executive Life of New York.

70% of Pavonia's reserves are for Structured Settlement Liabilities

Pavonia should be of interest to those of us in the structured settlement industry and personal injury lawyers who placed their clients into stuctured settelments with A+ or better insurers reinsureed by Pavonia because, based on published financial statements, approximately 70% of Pavonia’s reserves are for structured settlement liabilities.   These blocks were acquired by Pavonia directly or indirectly from their originating life insurance companies. Once again, these were A+ or better rated life insurance companies

Majority Owner of JG Wentworth With Seats on JG Wentworth Board is  the new Owner of Pavonia if Deal Goes Through

DIFS has been seeking a buyer for Pavonia and has just recently approved a Form A filing by Axar Capital to become the new owner of Pavonia.  Axar Capital is, in turn, the majority owner of J.G. Wentworth, the self-declared “largest purchaser of secondary market structured settlements and annuity assets in the United States”.   

Key Dates:  August 30, 2019  Axar Special Opportunities Fund V LLC Acquires The JG Wentworth Company  Source: FTC.gov

Now that DIFS has approved the sale of Pavonia to Axar Capital, the transfer will be final once an order approving the sale is entered by the Rehabilitation Court.  A status hearing on this matter has been set for September 16 at 8:00 am.

Is There Really Any Reason For Vigilance or Concern About the Pavonia Life of Michigan Acquisition?

Wilton Re has acquired the run off blocks of structured settlement annuities from AEGON, Allstate Life Insurance company of New York and Continental Assurance Company (CNA). Wilton Re is also registered structured settlement transferee in Maryland

777 Re is a reinsurance provider that acquires both active and run-off blocks of life insurance and annuity business underwritten by global insurance companies. The company provides superior reinsurance services to its strategic partners, leveraging deep relationships within the financial services and insurance industries.

and now Pavonia being acquired by the majority owner of JG Wentworth, withs seats on the JG Wentworth Board of Directors.  Is anyone concerned about a "Shake Shake Shake Pavonia" conga line?

"Shake, shake, shake, Pavonia, shake one payment or nine
Shake, shake, shake, Pavonia, shake it all the time
Work, work, work, Pavonia, it now JG time?
Work, work, work, Pavonia, it now JG time?

Insurer's name is Pavonia
Axar/JG they adore her
They reinsured structures, oh brother!
It's in Michigan, oh mother

Jump in line, rock da payments in time, oh yeah

Jump in da line, rock da payments in time.

-Parody of the Calypso classic Jump in The Line by Harry Belafonte

Is Crypto Suitable for an Injury Victim's Settlement Plan?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

I recently encountered a Internet troll who "must be" a spokesperson for "Bitcoin or Stupid Shit?", because anyone who reads our blogs, knows what we do, what people in the settlement planning industry do, including that judges that must approve minors' settlements, understands that an investment that has a 121% annualized rate of return over 10 years with a 181% standard deviation* might not be the most suitable investment for injury victims. And apparently it's not suitable enough for a large allocation for everyday investors either, according to Ray Dalio. And there are laws that restrict investments for minors and incompetents. 

_________________________________________________________________________

*Source Lazyportfolioetf.com.

In statistics, the standard deviation is a measure that is used to quantify the amount of variation of a set of data values. Used above as a measure of volatility.

_________________________________________________________________________________________________

1. According to billionaire investor and hedge fund manager Ray Dalio, it’s reasonable for everyday investors to hold a small amount of bitcoin, the largest cryptocurrency by market value. On a recent episode of the We Study Billionaires podcast, Dalio was asked by co-host William Green whether allocating 1% to 2% of one’s portfolio to bitcoin was reasonable. “I think that’s right,” Dalio replied. Dalio has served as co-chief investment officer of the world's largest hedge fund, Bridgewater Associates, since 1985. Dalio is regarded as one of the greatest innovators in the finance world, having popularized many commonly used practices, such as risk parity, currency overlay, portable alpha and inflation indexed bond management.

2. Crypto Freefall Gives Retirement Plans New Reason to Avoid Risk  [Bloomberg May 17, 2022]

"Upheaval in the cryptocurrency market puts teeth in a US Labor Department push to discourage retirement plans from adding digital assets to their 401(k) plan lineups. Crypto markets lost more than $270 billion just weeks after the department’s Employee Benefits Security Administration issued strongly worded guidance (CAR No. 2022-01) all but banning retirement plans from offering crypto assets. 

3. On June 29, 2022 an article by Alex Hern and Dan Milmo appeared in The Guardian with the headline "Crypto crisis: how digital currencies went from boom to collapse "Savers talk of devastating losses as assets such as bitcoin and ‘stablecoins’ like terra fell sharply"

4. On August 1, 2022   Nerd Wallet published an article  "After a Fall, Crypto Winter Sets In"

"Cryptocurrencies hit a rough patch in 2022, with prices falling and some companies facing serious financial issues".

 

5. On August 31, 2022, Fortune published  The Bitcoin crash has wiped out over $1.3 billion in value from Michael Saylor’s Bitcoin holdings. Now he’s being sued for tax fraud  Fortune reports that the 57-year-old entrepreneur made his name during the dot-com bubble of the late 90s and is well known for having lost $6 billion in a single day during the crash that followed.

6. If that's not enough, on April 26, 2022, the New Jersey law firm of Console & Associates discusses data breaches related to crypto

"Over recent years, Bitcoin, Ethereum, Litecoin and other cryptocurrencies have surged in popularity and value as more and more people see the value that the asset class presents. However, hackers see the fact that everyday investors are now holding cryptocurrency as a major opportunity. In fact, over the past year, there have been several high-profile cryptocurrency hacks resulting in the loss of more than $14 billion dollars".

7. Comedian Bill Murray loses $186,000 to hackers Bill Murray recently held an NFT auction in which most of the recouped funds were in the said wallet. The statement showed that the hacker drained 90% of the entire funds in the wallet, leaving just a little over $500 in the wake of the act.  Cryptopolitan September 3, 2022

8. May 12, 2022 New York Post reports "Bitcoin’s plunge slashes the fortunes of major crypto billionaires", the Winklevoss twins lost 40% of their respective fortunes,  more than $2 Billion each at the time the story was poublished in the NY Post.. Sam Bankman-Fried, the founder and CEO of crypto exchange FTX, has lost roughly half of his on-paper fortune since March and is now worth about $11.3 billion". Crypto billionaires losing fortunes as bitcoin tumbles (nypost.com) 

9. "We've only scratched the surface of how bad the crypto crime wave has gotten June 13, 2022 LA Times by Matt Pearce

"These are tough days for cryptocurrency investors. Values are cratering. Prominent crypto firms are faltering. And it's coming after a massive surge of criminal fraud that has been pummeling crypto users with unknown billions of dollars in losses with little relief in sight"

10. Bitcoin is down roughly 60% this year and some other tokens have lost even more. The ninth month of the year has historically been one of the worst for the largest cryptocurrency, falling every September since 2017. Bitcoin has averaged an 8.5% drop for the month over the past five years, according to Bespoke Investment Group".  August 31, 2022 Bloomberg

11. Says Fort Lauderdale's and Owings Mills Maryland's Richart Ruddie (also self-styled as "Richart Ruddie Annuity"), a bête noire of sorts in structured settlement circles due his association with JRR Funding, AnnuitySold and related companies, which were banned from doing business in Maryland for 7 years from January 2018 for fraud:

"Losses of Bitcoin Value – As the shining light of the cryptocurrency industry, Bitcoin advanced in value to a high watermark of $69,000, but the erosion of that value has declined since November of 2021. The currency currently trades roughly around the $20,000 mark a high mark in 2018 that now feels like a low mark for the worlds most well known coin. That’s almost an 80% loss in just over 6 months".- The Crypto Updates July 12, 2022

On a $1,000,000 investment that's a $800,000 loss.  Could you handle it emotionally?  What if you were not physically able to work? What if that money represented compensation for the loss of your spouse, parent or child?

12. Bitcoin, Ethereum Nosedive: $445M Liquidated From Crypto Market (msn.com)  September 19, 2022

Bitcoin Loses Steam Bitcoin is currently trading at $19,100, down 14% in the past week and down by around 4% over the past 24 hours. The world’s largest cryptocurrency is now down by a staggering 75% from its all-time high in November 2021 when its market capitalization was $1.27 trillion. It is now down to $366 billion.

I dont think it's really necessary to go on. Is this the kind of volatility that a vulnerable class of investors should be exposed to? 

The "Bitcoin-Shitcoin"  Expression

The Bitcoin troll scoured the Wayback Machine to focus on a long since deleted post titled "Bitcoin-Shitcoin", selectively overlooking the criticism of Henrique Vicente... whose "Cryptocurrency Tulipmania: Bitcoin is a shitcoin" was published May 10, 2021.  In 2020, John McAfee opined that "Bitcoin is the true Shitcoin".  Oh dear!

While I understand that a "Bitcoin v Stupid Shit" "spokesperson" might get their knickers in a twist, the above suggests there is plenty of support for use of the term in the long deleted post. The fact that the troll decided to spend his spare time going into the Wayback Machine is something else altogether. Let it go Chuck. The numbers and volatility speak for themselves.

Judges Would Likely Not Approve Crypto Investment of a Minor or Incomptent Person's Settlement

My message is clear in prior posts.  The volatility of Bitcoin and other crypto are generally not suitable for injury victims and probably would not be approved for injury victims where court approval of settlement is required. For example see New York  CPLR § 1206. Disposition of proceeds of claim of infant, judicially declared incompetent or conservatee, which states:

(c) the court may order  that  money  constituting  any  part  of  the
  property  be  deposited  in one or more specified insured banks or trust
  companies or savings banks or insured state or federal credit unions  or
  be  invested  in  one  or more specified accounts in insured savings and
  loan  associations,  or  it  may  order  that  a  structured  settlement
  agreement  be  executed,  which shall include any settlement whose terms
  contain provisions for the payment of funds  on  an  installment  basis,
  provided that with respect to future installment payments, the court may
  order that each party liable for such payments shall fund such payments,
  in  an amount necessary to assure the future payments, in the form of an
  annuity contract executed by a qualified insurer  and  approved  by  the
  superintendent  of  financial  services pursuant to articles fifty-A and
  fifty-B of this chapter. The court may elect that the money be deposited
  in  a  high  interest  yield  account  such  as  an   insured   "savings
  certificate" or an insured "money market" account. The court may further
  elect  to  invest  the money in one or more insured or guaranteed United
  States treasury or municipal  bills,  notes  or  bonds.  This  money  is
  subject to withdrawal only upon order of the court, except that no court
  order  shall  be required to pay over to the infant who has attained the
  age of eighteen years all moneys so held unless  the  depository  is  in
  receipt  of an order from a court of competent jurisdiction directing it
  to withhold  such  payment  beyond  the  infant's  eighteenth  birthday.
  Notwithstanding the preceding sentence, the ability of an infant who has
  attained  the  age of eighteen years to accelerate the receipt of future
  installment payments pursuant to a structured settlement agreement shall
  be governed by the terms of such agreement. The reference to the age  of
  twenty-one  years  in any order made pursuant to this subdivision or its
  predecessor, prior to September first,  nineteen  hundred  seventy-four,
  directing  payment  to  the  infant  without further court order when he
  reaches the age of twenty-one years, shall be deemed  to  designate  the
  age of eighteen years; or
    (d)  the  court  may  order  that the property be held for the use and
  benefit of such  infant,  incompetent  or  conservatee  as  provided  by
  subdivision (d) of section 1210.

Structured settlement annuitants receiving stable tax exempt income from a structured settlement, should not be groomed into selling structured settlement payment rights to zealous pennies on the dollar merchants from in South Florida or Maryland to put into volatile investments with a 181% standard deviation.

Beware the "Muthaforkers" | Warning to 18-21 Year Olds With Structured Settlements  February 22, 2018

Last updated September 19, 2022

 

Interpleader Motion is GRANTED in Terrence Taylor Case in Portsmouth, Trial Set for June 2023

by Structured Settlement Watchdog

Judge Charles J. Maxfield has granted the New York Life interpleader motion that was pending for many years.  What this means is that instead of New York Life Insurance Company making structured settlement payments to the structured settlement factoring companies;  their investors and/or assignees, the payments in dispute will be paid into the Court until the lawsuit is adjudicated.  At that point the payments could go to the current payees, to Taylor, or some combination.

Merriam Webster:  Interpleader is "a proceeding to enable a person to compel parties making the same claim against him to litigate the matter between themselves"

 

Discovery Moves Forward and Trial Date Set

 

It appears that discovery will move forward. A bench trial has been set for June 2023. 

 

West Virginia or Virginia?

 

As the parties move off the quagmire of the last 7 years, with less than a year to go, the parties will have to visit the issue of
Terrence Taylor's residence at the time of the transfers. All of the structured settlement transfer petitions by SAF and related companies were submitted in Virginia, specifically Portsmouth Circuit.

 

But as Terrence Taylor's camp has already pleaded, Terrence Taylor was a resident of West Virginia.  Taylor alleges that is supported by:

• The lease of residential property in West Virginia
• The eviction notice from the same properties in West Virginia
• Records of documents sent my SAF to Terrence Taylor at the address in West Virginia
• Paramedicals for the life insurance applications to Nationwide Insurance and Sagicor that were collaterally assigned to the the assignee investors Aleln Grosnick and Income Payment Stream Partners were conducted at the West Virginia address. From the point of domicile, it's important to note that the Grosnick and Income Payment Stream Partners' acqusitions were at the TAIL END of the series of structured settlement factoring deals in Virginia.
• Affidavits of two notaries that attest that relevant documents related to the proposed transfer were signed in West Virginia.

For the purpose of IRC 5891

An “applicable State statute” is defined as a statute that provides for entry of an order, judgment or decree described in clause (A) above and has been enacted by (I) the state in which the payee of the structured settlement is domiciled, or (II) if there is no such statute in the state in which the payee is domiciled, then the State in which a party to the structured settlement (including an assignee under a qualified assignment under section 130) or the person issuing the funding asset for the structured settlement is domiciled or has its principal place of business. IRC section 5891(b)(3) Excise Tax on Structured Settlement Fcatoring Audit Technique Guide  (March 2019 revision)

Was Structured Asset Funding or any its affilates involved in Terrence Taylor Transfer Petitions Registered in West Virginia when Terrence Taylor was Solicited in West Virginia?

§46A-6H-8. Registration with the secretary of state  (West Virginia Law)
(a) A transferee or other person in the business of soliciting or purchasing future payments shall file a registration statement with the secretary of state before advertising or arranging transfers of consumer’s future payment rights in this state.

The registration statement shall contain:
(1) The name and address of the transferee;

(2) The name and address of the transferee’s agent for service of process within the state, or if the company does not have one within the state, a statement that the secretary of state will serve as the agent for service of process; and

(3) A full and complete disclosure of any prior or pending litigation involving alleged violations of this article’s provisions or consumer complaints filed with the attorney general’s office of this state that allege violations of this article’s provisions, or a notarized statement that there has been no such litigation or unresolved complaint relating to the operations of the transferee.

(b) The transferee shall update the statement within thirty days after a change of information occurs.

(c) Each transferee registering pursuant to the provisions of this section shall maintain a copy of the registration statement. The transferee shall allow a consumer, interested party or court to inspect the registration statement on request.

(d) The secretary of state may charge each transferee that files a registration statement with the secretary of state a reasonable fee not to exceed one hundred dollars to cover the cost of filing.

 

 

 

 

 

 

 

 

123 Lump Sum in Quandry Over Whether Civil Defendants Are Guilty (or Liable)?

by Structured Settlement Watchdog

Rocky could agree to a structured settlement under the 123 lump Sum definition. He's guilty alright.

123 Lump Sum is a structured settlement factoring company based in Fort Lauderdale Florida. Factoring companies solicit people who are receiving structured settlement payments and offer pennies on the dollar for liquidity in exchange for structured settlement payment rights. 

One of the two principals of 123 Lump Sum is an attorney. Surely a board member of the National Association of Settlement Purchasers knows that a structured settlement is a form of consideration in a civil matter not a criminal matter. However, that has not stopped 123 Lump Sum from a silly blooper that wrongly informs consumers about the basics, claiming that a Defendant in a civil suit is guilty, as opposed to liable.

123 Lump Sum states on its website (see 8-24-2022 screenshot below)

"Let’s start with the basics. A structured settlement is an agreement reached during a lawsuit, where the guilty party agrees to pay the victim a specified amount of money in periodic payments.

We can have a laugh about this now, but really guys, this is rookie stuff.

 

123 Lump Sum seems to have adopted old "Novation orange"

 

 

The Portsmouth Structured Settlement Factoring Fandango | Season 7 Resumes

by Structured Settlement Watchdog

People of color are often, but not exclusively, the victims of the worst of the structured settlement factoring system in the USA.

I'll Say a Few of  Their Names For You

• Terrence Taylor 
• Cedric Martez Thomas
• James McMillan
• 70% of Access Funding client base, like Freddie Gray, were black according to the Access Funding training manual Exhibit 4 p13  CFPB report  (in linked post). 

If one were to research and analyze the data from all the really bad structured settlement factoring transactions, the ones with excessive factoring, often in a short time frame, how many of them:

• Involved originating factoring companies owned by white people, with black annuitants and white investors?
• Involved originating factoring companies owned by people of color, with white annuitants? and black investors?

All of the above named cases involved a person of color with a structured settlement and originating structured settlement factoring companies owned or controlled by white people. I have a strong belief that a wider study (and I personally believe that one should be done) the statistics would look pretty bad. 

A certain Curtis Mayfield song comes to mind...metaphorically speaking,  In "I'm Your Pusherman", from the soundtrack of the movie SuperFly,  Mayfield takes an observer's view, refraining from judgment and showing the pusherman from the perspective of a potential client. To a kid on the street, the drug dealer shows up everywhere, and can take on many forms: mother, father, doctor, friend. Said Mayfield: "The first thing I wanted to do was not condone what was going down, but understand it, and speak in terms of how one can keep from getting locked into these things which youngsters and a lot of people see all around them." [Source: Song Facts]

It's my belief that investors should not only know what they are (and are not) investing in (i.e. not an annuity), but the circumstances of the individual whose structured settlement payment rights they are buying.

Where is the Equity, Social Responsibility and Governance (ESG)?

Will ESG come into play in the structured settlement factoring space? Let's see what happens. There are insurance companies that invest in structured settlement receivables as well, although those will be more difficult to parse because they may buy securitizations. But how are their ESG teams analyzing the risks?  What is their shareholder awareness?  One life insurance company, Symetra, that formerly sold structured settlement annuities and factored them, is defending a recently certified class action in the State of Washington.

Who were Structured Settlement Protection Acts Intended to Protect? 

A structured settlement protection act is first intended to protect structured settlement annuitants, according to the IRS.

"Beginning in 1997, state legislatures recognized the need to protect structured settlements against the abuses of factoring" and

"The purpose of IRC section 5891)  is to deter the purchasers of payment rights under structuredsettlements from taking advantage of recipients who are entitled to receive tax free settlement payments, including payments under settlements received by victims of the 9/11 terrorist attack " Source: IRS.gov

Section 5891 was part of the Victims of Terrorism Tax Relief Act of 2001, signed into law by then President George W. Bush in January 2002. 

The Portsmouth Structured Settlement Factoring Fandango | Season 7 Resumes

In a state where there is a structured settlement protection act like Virginia  (all 50 states and DC now have such acts), nobody, let alone a person of color, should be able to do 10 or 11 pennies on the dollar structured settlement factoring transactions in 2 years like Terrence Taylor and then wait more than 3 times that time frame doing donuts the parking lot?  It's not all bad in Virginia. As I reported in May 2022,  Norfolk Virginia Judge Mary Jane Hall Rejects Silly Money Structured Settlement Transfer - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary (typepad.com)

" Judicial Review?"

But if you're an African-American and receiving payments from a structured settlement, you should consider paying attention to the Terrence Taylor case and what has been going down in Portsmouth Virginia.   If you're an African American community leader in the State of Virginia and a member of the Virginia Bar, pay attention to what has happened in Portsmouth, where retired Judge Dean Sword was the gatekeeper in the majority of the transfer petitions.  

Defendant's/Counter-Claim Plaintiff's Motion to Compel Discovery has been  pending since December 19, 2015

Read Terrence Taylor's story from two articles in the Washington Post December 27, 2015 and January 4, 2016.  Not a typo, that's closing in on 7 years ago.

In the 2003 movie "Bruce Almighty”, God (played by actor Morgan Freeman) discusses the rules of Bruce's imminent one week tenure as God. He says to Bruce “…and you can’t mess with free will".

Maybe THAT's it! If that's how it will justify its case, why hasn't Structured Asset Funding made the case? It should be all over right?. What justifies the time inequity and the conduct?  

Structured Asset Funding  ("SAF"), as plaintiffs and counter-claim Defendants, can slap themselves silly for the "ingenuity" of hiring members of the Virginia legislature, first former Virginia Delegate Steve Heretick, with a newsworthy amount of "legislative privilege" over 6 years and then Virginia Senator Bill Stanley as the "relief pitcher" heading into the "7th inning(year) stretch".

On Wednesday August 24, 2022 a hearing on a motion pending for more than three years is due to be heard.  An interpleader action was filed by New York Life, which sought, again over three years ago, in a hearing that was originally scheduled for April 30, 2019 seeks to direct those payments from New York Life to instead  be held by the Court pending resolution of the matter. 

The Leglislative Privilege Chronicle (Portsmouth Edition)

Taylor's unsuccessful December 14, 2021 motion to disqualify SAF replacement counsel Bill Stanley, chronicles for readers just how since October 2021 disqualified SAF counsel Steve Heretick exercised privilege that served to delay the Taylor case for a time frame replacement Judge Charles Maxfield described as shameful. 25 motions remained pending. Some motions have now been pending for almost 7 years!

2016 (once)

• Attorney Heretick sent a letter on January 11, 2016, stating that he would not be available
until mid-April of 2016 (Taylor Motion Ex. A)

2017 (thrice)

• Attorney Heretick sent an email on February 23, 2017, cancelling a hearing set for April
 2017 (Ex. B)
• On March 17, 2017, Attomey Heretick postponed a hearing date set for June 27, 2017
until June 29, 2017 (Ex. C)
• On November 21, 2017, Attomey Heretick emailed the parties stating that he would be
unavailable in 2018 until late March of that year (Ex. D)

2018 (twice)

• On April 25, 2018 Heretick responded to a request for his ability stating that he would
likely not be available until after July 1, 2018 (Ex. E)
• On December 7, 2018, Attorney Heretick continued a hearing set for December 17, 2018
(Ex. F)

2019)  (once)
• Attorney Heretick sent an email on December 18, 2019, in response to a request for dates
stating that he would not know his availability until early January (Ex. G)

2020  (once)
• On October 9, 2020, Attorney Heretick continued a hearing set for October 19, 2020 (Ex.
H)

2021 (once) In December 2021, just about new SAF counsel's first act was to exerice legslative privilege, which set the hearing back more than 8 additional months.

Taylor argued in December 2021 that Rule 3.4 (j) of the Virginia Rules of Professional Conduct, states:

A lawyer shall not... delay a trial, or take other such action on behalf of the client when the lawyer knows or when it is obvious
that such action would serve merely to harass or maliciously injure another. Id. That admonition is further explained in Comment 6:
Paragraph (j) deals with conduct that could harass or maliciously injure another. Dilatory practices bring the administration of
justice into disrepute. Delay should not be indulged merely for the convenience of the advocates, or solely for the purpose of
frustrating an opposing party's attempt to obtain rightful redress or repose. * * *Va. Rules of Professional Conduct R. 3.4, Cmt. 6 (emphasis added).

As then-Circuit Court Judge D. Arthur Kelsey observed two decades ago: Implicit in § 30-5 is the good-faith duty of a lawyer-legislator not to accept representation 'where it is clear that a party may be seeking out a legislator to act as a lawyer simply to have the opportunity to take advantage of the legislative continuance for purposes of delay.

In Commonwealth v. Foulks, 56 Va. Cir. 449,455 n.l (Suffolk Cir, Ct., Oct. 19, 2001) (quoting Guidelines on Legislative Continuances, House of Delegates Committee on Rules^ (April 21, 1998)). Judge Kelsey emphasized that, "[t]he lofty purposes behind § 30-5—as historically sound and jurisprudentially valid as they may be—are not furthered by defendants who deliberately seek out legislator-lawyers as a means of tapping their near-automatic delay
powers." Id. at 455 n. 1.

Stan's The Man

After referring to the delays as "shameful" in an October 2021 hearing, Judge Maxfield permitted the assignment of Senator Bill Stanley, who prompt;y filed for legislative privilege and the hearing was postposed yet again, this time for more than 8 months.

Other Information of Interest

It has been a bone of contention in the case that Terrence Taylor was not in fact a VIrginia resident but a West Virginia resident . According to the public court filing, two of the investors, Massachusetts investor Allen Grosnick and Income Stream Funding Partners were each named as beneficiaies of life insurance policies on the life of Terrence Taylor, with Nationwide and Sagicor. The  insurance was arranged by a broker arranged by SAF. When investors buy life contingent payments, life insurance is often purchased as protection to hedge their investment in case the seller dies prematurely.  Whether Taylor was in fact a resident of West Virginia or Virginia may have an impact on the case. The two apps for the life insurance were taken in West Virginia and documents were signed in West Virginia according to the filing. Yet the structured settlement transfer petitions in dispute were filed in Virginia. 

Structured settlement factoring companies were "blessed" to be in a business with little regulation, lax enforcement in certain juridictions and a lack of regulation of sales practices. 

Cue a certain Curtis Mayfield song, metaphorically speaking..."

In the meantime all eyes on Fairfax County Judge Charles Maxfield who is sitting in on the Portsmouth Circuit, after the whole panel of judges there were recused.  

 

 

 

 

 

 

 

 

 

 

 

 

 

Funny Typos I Have Known | Structured Settlement "Epxpert" Eugene Ahtirski

by Structured Settlement Watchdog

I thought I'd lend a helping hand to Van Nuys California attorney Eugene Ahritski who provides advice concerning structured settlement transfers and now holds himself out as a Structured Settlement "Epxspert". In"gene" ious!

Came up in a Google search 8-23-2022

 

You know I aced phonics back in the day...

Mr. Ahtirski has close to 20 years of experience in the transfer of structured settlements from "A to Zebra" and a good sense of humor.  Good on ya mate!

We Pay More Funding Another Press Release Fail

by Structured Settlement Watchdog

 

It's the Watch "Dog Days" of August and I have to nip at We Buy Payments' Rhett Wadsworth's heels again.

What a Pity!

 

The Wilton Springs Florida company led by Wadsworth issued another press release, that misrepresents a structured settlement transfer as an annuity sale. Oh dear!  I wish I could say it was abject ignorance, but Rhett Wadsworth's company keeps doing it over and over again. 

 

Rhett Wadsworth is no rookie, he was the Sales Manager and Director of Sales for Structured Asset Funding and liason to Terrence Taylor, the African-American amputee burn victim, a vast swath of whose very large structured settlement was (figuratively speaking) "Gone With the Wind" in 24 months in a Portsmouth Virginia court.  The company Rhett Wadsworth was the Sales Director/Manager of had the lion's share of the transactions. Taylor's legal case has been pending for 7 years, thanks to SAF's propensity to hire lawyers that are members of the Virginia leglsature, who then make judicial use of legislative privilege.  Justice delayed is justice denied.  Taylor's plight has been the subject of a December 27, 2015 expose in the Washington Post (which mentions Wadsworth's role) and a Wall Street Journal expose in March 2015. Next week, unless its postponed again for another 8 months, one of dozens of motions pending, some for 7 years (yes 7 years!) will be heard. It was scheduled to be heard December 2021, but after Steve Heretick was disqualified as counsel for SAF, SAF replaced him with another VIrginia legislator who could claim legislative privilege.  But I digress...

 

1. " We Pay More Funding Helps Individuals Sell Their Annuities"

 

Comment

 

I call BS on We Pay More Funding as to structured settlements and lottery payments, in that the annuity that funds the structured settlment is not owned by the payee, it is owned by the qualified assignment company. In a structured settlement transfer, the annuity does not get transferred or purchased. What is bought and sold is the structured settlement payment rights

 

2. "Most annuity sales require court approval, which can be a tedious process."

 

Comments:

 

No, annuity sales do not require court approval, because Wadsworth's business and it seems I can articulate it better than he can  (which doesn't exactly inspire confidence), involves the transfer of structured settlement payment rights not annuity sales.

 

"The National Council of Insurance Legislators’ (NCOIL) model law for state structured settlement protection acts stipulates that transfers of structured settlement payment rights may not be approved unless the court finds that “the transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents.” 

Now its time for Annuity.org to fall off their chair. That means you Kim Borwick!

 

 No court approval is required if you are selling payments from a retail annuity purchased through an insurance company.

 

by Structured Settlement Watchdog

 

It's the Watch "Dog Days" of August and I have to nip at We Buy Payments' Rhett Wadsworth's heels again.

What a Pity!

 

The Wilton Springs Florida company led by Wadsworth issued another press release, that misrepresents a structured settlement transfer as an annuity sale. Oh dear!  I wish I could say it was abject ignorance, but Rhett Wadsworth's company keeps doing it over and over again. 

 

Rhett Wadsworth is no rookie, he was the Sales Manager and Director of Sales for Structured Asset Funding and liason to Terrence Taylor, the African-American amputee burn victim, a vast swath of whose very large structured settlement was (figuratively speaking) "Gone With the Wind" in 24 months in a Portsmouth Virginia court.  The company Rhett Wadsworth was the Sales Director/Manager of had the lion's share of the transactions. Taylor's legal case has been pending for 7 years, thanks to SAF's propensity to hire lawyers that are members of the Virginia leglsature, who then make judicial use of legislative privilege.  Justice delayed is justice denied.  Taylor's plight has been the subject of a December 27, 2015 expose in the Washington Post (which mentions Wadsworth's role) and a Wall Street Journal expose in March 2015. Next week, unless its postponed again for another 8 months, one of dozens of motions pending, some for 7 years (yes 7 years!) will be heard. It was scheduled to be heard December 2021, but after Steve Heretick was disqualified as counsel for SAF, SAF replaced him with another VIrginia legislator who could claim legislative privilege.  But I digress...

 

1. " We Pay More Funding Helps Individuals Sell Their Annuities"

 

Comment

 

I call BS on We Pay More Funding as to structured settlements and lottery payments, in that the annuity that funds the structured settlment is not owned by the payee, it is owned by the qualified assignment company. In a structured settlement transfer, the annuity does not get transferred or purchased. What is bought and sold is the structured settlement payment rights

 

2. "Most annuity sales require court approval, which can be a tedious process."

 

Comments:

 

No, annuity sales do not require court approval, because Wadsworth's business and it seems I can articulate it better than he can  (which doesn't exactly inspire confidence), involves the transfer of structured settlement payment rights not annuity sales.

 

"The National Council of Insurance Legislators’ (NCOIL) model law for state structured settlement protection acts stipulates that transfers of structured settlement payment rights may not be approved unless the court finds that “the transfer is in the best interest of the payee, taking into account the welfare and support of the payee’s dependents.” 

Now its time for Annuity.org to fall off their chair. That means you Kim Borwick!

 

 No court approval is required if you are selling payments from a retail annuity purchased through an insurance company.

Genex Capital Arizona Structured Settlement Investment Litigation Update

by Structured Settlement Watchdog

Time for a quick update on the Genex Capital structured settlement investment litigation in Arizona, an important case to follow for investors in structured settlement payment rights or, contemplating making investments in other people's structured settlements (or parts thereof), and their advisers.  If you are an injury victim who is evaluating whether or not to apportion your settlement recovery to a structured settlement, this article is not for you, unless your settlement planner is recommending that you invest in other people's structured settlement payment rights.

In my June 11, 2022 blog, I reported that the Court in its June 9, 2022 under advisement ruling, declined to enter a partial summary judgment in favor of Defendants against Genex Capital Corporation in its lawsuit against New England Annuity Associates, Bulbrook-Drislane, Seeley Capital Management Inc., Income Stream Funding Partners, LLC, John Bulbrook/Jane Doe Bulbrook, and Christopher Seeley (collectively, “Defendants”)

1. The Court found that Genex Capital presented sufficient evidence demonstrating that factual disputes remain as to what damages Genex may have suffered. As a result, the Court declined to enter summary judgment on the issue of damages. The Court found that Defendants have not shown an absence of any genuine issue of material fact regarding causation. Based on its conclusions, the Court declined to enter summary judgment on the issue of damages or causation of damages.

2. The Court found that the Keefer Plaintiffs are entitled to a declaration that they are the owners of and have the right to receive payments arising from the Payment Streams and that Genex has no material right, title, or interest in the Keefers’ Payment Streams.

The Court further reasoned that although the  RPA (Genex Receivables Purchase Agreement) is clear regarding the Keefers’ interest in the Payment Streams, the RPA is equally clear regarding restrictions on reassignment. Section 3.4 of the RPA states: “Buyer shall not have the right to further assign or sell the Receivable and must keep the Receivable for the balance of its term unless otherwise expressly approved by Genex.” Statement of Facts, Ex. 1, RPA § 3.4. The Court found that Genex is entitled to a declaration that the RPA does not permit reassignment of the Receivables without Genex’s consent, but denied all other relief.

Following the June 9, 2022 under advisement ruling, Genex Capital requested reinconsideration of the ruling. Subsequently the Court requested New England Annuity Associates Defendants to file a response. New England Defendants filed an amended counterclaim in July to which Genex has filed a response. 

The latest is that local counsel of record for  Genex Capital Corporation and its CEO Roger Proctor filed to withdraw as counsel.

Pursuant to Rule 5.3(a)(2)(B)(ii) of the Arizona Rules of Civil Procedure, Timothy J. Eckstein, Jeffrey B. Molinar, William D. Furnish and BriAnne N. Illich Meeds of the firm Osborn Maledon, P.A. move to withdraw as counsel of record for Genex Capital Corporation and Roger Proctor. The undersigned attorneys seek an Order granting their withdrawal on the ground that the clients failed substantially to fulfill an obligation to the lawyer regarding the lawyers’ services and has been given reasonable warning that the lawyers will withdraw unless the obligation is fulfilled.

On September 13, 2022, The Court granted the Motion of  Timothy J. Eckstein, Jeffrey B. Molinar, William D. Furnish and BriAnne N. Illich Meeds of the firm Osborn Maledon, P.A. to withraw as Counsel for Genex Capital Corporation and Roger Proctor.

GENEX CAPITAL CORPORATION, a Delaware corporation; Plaintiff,
vs.
SEELEY CAPITAL MANAGEMENT,
INC., a Massachusetts corporation; et al.,
Defendants. __________________________________

RICHARD L. KEEFER and VICKI L.
KEEFER, et al.,
Plaintiffs,
vs.
GENEX CAPITAL CORPORATION, a
Delaware corporation; et al.,
Defendants. __________________________________

AND RELATED COUNTERCLAIMS.
Case No. CV2020-004958
(Consolidated with CV2020-013796 and
CV2020-002266)

Why You Should Follow the Arizona Litigation

The Arizona litigation is perhaps the most significant case about the limitations and transactional risks of investing in structured settlement payment rights. It is well worth taking the time to understand what has happened with the investors. 

For years such receivables  (structured settlement payment rights) have been marketed to investors across the secondary and tertiary markets as if they were annuities, in some cases even insinuating, with a disclaimer, that such investors might have the same statutory protections as those who buy real annuities.  Today 37 states, who have adopted the 2017 revisons to the Life & Health Guaranty Associations Model Act (#520) have zero protection for investors in the event of the insolvency of the obligor of the factored structured settlement receivable

See Section 3A(5(c) of the 2017 Revisions tp the LIfe & Health Guaranty Associations Model Act  (#520) which expressly excludes "a person who acquires rights to receive payments through a structured settlement factoring transaction as defined in 26 U.S.C. 5891(c)(3)(A), regardless of whether the transaction occurred before or after such section became effective".

Genex Capital CEO Roger Proctor has done the structured settlement industry and consumers a substantial service in earlier responsive court filings by defining investments by the investors in this case, particularly when subject to a payment servicing agreement, as a "subset" or "the lesser subset" of payment rights.

[from 1/3/2022 Decl. of Roger Proctor in Response to Seeley Defendants' Motion for Partial Summary Judgment (at #56) IN THE SUPERIOR COURT OF THE STATE OF ARIZONA IN AND FOR THE COUNTY OF MARICOPA

GENEX CAPITAL CORPORATION, a Delaware corporation; Plaintiff, vs. SEELEY CAPITAL MANAGEMENT, INC., a Massachusetts corporation; et al., Defendants. AND RELATED COUNTERCLAIM; RICHARD L. KEEFER and VICKI L. KEEFER, husband and wife; et al., Plaintiffs,vs. GENEX CAPITAL CORPORATION, a Delaware corporation; et al., Defendants.  Case Nos: CV2020-004958 CV2020-013796 (Consolidated) at #1]

 

 

CrowFly Flies No More | Buffalo Structured Settlement Factoring Company Folds

by Structured Settlement Watchdog  (UPDATED August 26, 2022)

CrowFly, the John T. Bair principally owned structured settlement factoring origination and servicing company has played its swansong , the fat lady has sung and the curtain has come down, according to well placed sources. familiar with the situation. 

The demise of CrowFly came 4 months after a local media headline in Buffalo Business First " Fintech CrowFly hits another gear, tripling team and ramping up revenue" Buffalo Business First, Dan Miner Reporter  April 7, 2022. 

Only 4 months ago... Weird!

1. "The company’s revenue is up more than 400% annually the last two years and is in the process of nearly tripling its team to 15 employees. Co-founder Nita Bhatia was named CEO in late December (2021)"-Buffalo Business First
2. “We’re going to continue building out our org chart, which will help us continue our growth,” Bhatia said then. “We have only tapped a small portion of our potential market share and marketplace.”-Buffalo Business First
3. Huge estimated amount of daily budget in pay per click ads  

CrowFly has played its swan song

On August 25, 2022, the majority owner John T. Bair finally issued a statement "“After four years, and over a million in individual investment from me, achieving the goal of fundamentally changing the industry for the better became unviable,” Bair said"., in a post by Dan Miner of Buffalo Business First. It was unclear from the quote attribiuted to Bair if that " over a million" was before, or after, any fees earned on the sale of structured settlement payment rights from annuitants that Bair wrote while with Forge Consulting and Milestone Consulting? It's certainly reasonable to ask.

Question Of "Churning/ Attempted Churning" of Milestone and legacy Forge annuitants with structured settlement payments

CrowFly was billed as a "Fintech", part of a suite of companies in marketing materials, under the Milestone & Co umbrella  (formerly Seventh Amendment Holdings, LLC).  It really doesn't matter what they called it, there was an admission for anyone paying attention that CrowFly was a structured settlement factoring origination and servicing company.

For 4 years The Structured Settlement Watchdog, raised the natural question of whether CrowFly and other Bair associate entities targeted and mined Bair's primary market customers with structured settlement payments for structured settlement factoring.  Bair maintains however that CrowFly is a separate company despite the admission in a MIlestone Wealth's Form ADV Part 2 dated March 16, 2022 that Bair was the principal owner before the recent shuttering of the company. He also admitted in October 2018 using "we" from his Milestone email address that he was "the only primary market as well as secondary market origination firm that he knew of".

Carl Hunley Jr., a very talented artist, was commissioned to do a brand refresh for Seventh Amendment Holdings, LLC and various companies under its umbrella in 2020. As you can see from this March 28, 2020 posting on Behance, CrowFly was notably absent. I wonder why? CrowFly was in existence since 2017 and operating out of the same office.

Then came evidence found on the New York NECF IAPPS online court records system, a treasure trove of revelation.

• Our recent posts chronicle my findings. The New York court records show Seventh Amendment Holdings, LLC and United States Periodic Payment Assigment Company involvement as transferees in structured settlement transfers proposed to New York judges.  Seventh Amendment Holdings , which was renamed  Milestone & Co earlier this year, and USPPAC, are ongoing entities that participated in the factoring of John T. Bair written structured settlements.  No wonder Bair wanted a 3 year non compete and  a $100,000 liquidation of damages clause when I queried him about how he was going to manage conflict of interest in June 2018!  ( I didn't sign)
• My January 15, 2022 post discusses findings from a from New York court records search that reveal  numerous CrowFly transfer petitions, to add to the pile of petitions of the aformentioned Seventh Amendment Holdings, LLC and United States Periodic Payment Assignment Company,  the former name of holding company MIlestone & Co that was used as QSF admin and the latter a company used for qualified assignments. It would be reasonable for anyone, particularly lawyers referring cases, to question the level of "churning" of Bair written structures with all Bair related companies prior to and during CrowFly's existence. 
• What would be the result of research of court records in other states?  How many more cases would we find?  How much of the growth came from "churning" of Bair written structures?

Rising Interest Rates Hurt Factoring Companies With Thin Margins

Rising interest rates hurt structured settlement factoring originators like CrowFly. They cannot afford to get the pricing wrong on the originations, because if interest rates move up and they've priced too low to be competive, they may not be able to move the paper to investors. For example if CrowFly priced a deal at 4% and alternative investments are now paying greater than 4%, where is the room for CrowFly's margin and transaction costs?  Same thing goes for other companies. The situation grew dire for a number of firms when Sutton Park Capital, a funder of funders, reportedly turned off its funding spigot. A similar phenomenon occurred during the 2008-2009 financial crisis.  Then there were fewer splinter factions and small potatoes.

My condolences to CrowFly employees, some who find themselves out of work. It was only April 2022 when things were brimming with optimism and the company was hiring, growing to as many as 11 employees  (per Buffalo Business First]

United States Periodic Payment Assignment Company (USPPAC) Used to FACTOR Milestone Client's Structure

by Structured Settlement Watchdog

What is going on here? I thought that United States Periodic Payment Assignment Company is an assignment company, as in qualified assignments. Apparently not entirely, continued research of court records reveals!

"All in the Family"

Erie County New York Court records show that United States Periodic Payment Assignment Company (USPPAC) was used to buy structured settlement payment rights from Jerry E. Sherman, a 65 year old from Grand Island New York, a former client of Buffalo law firm Paul William Beltz PC, for pennies on the dollar in April 2017, less than two years after the structured settlement annuity was issued by John Hancock Life Insurance Company and Milestone Consulting made approximately $23,800 in commissions on the $600,000 allocated to the structure from the $2,500,000 settlement for a 1999 work related injury. Both Milestone and USPPAC have common ownership as part of a suite of companies under holding company Milestone & Co, LLC  (f/k/a  Seventh Amendment Holdings, LLC.  The holding company shares are primarily owned by John T. Bair, according to the March 16, 2022 Form ADV Part 2 filing by another subsidiary of MIlestone & CO, Milestone Wealth, LLC.

In the Amended Petition dated May 9, 2017 at #3, In the Matter of the Petition of United States Periodic Payment Assignment Company for the Approval of Transfer if Structured Settlement Payment Rights In Accordance with GOL  5-1701, Petitioner vs Jerry E. Sherman, John Hancock Assignment Company and John Hancock Life Insurance Company of New York, Respondents  Supreme Court of the State of New York Erie County  Index 804461/2017, submitted by Bernadette Weaver-Catalana, Esq, of Lavin, O'Neil, Cedrone & DiSipio, attorneys for USPPAC, it is represented that USPPAC (the Petitioner) is a " transferee" as defined in GOL 5-17021(t), which states  "transferee” means a party acquiring or proposing to acquire structured settlement payment rights through a transfer or restructuring.

In Delaware, USPPAC's state of domicile, the term "transferee" means a party acquiring or proposing to acquire structured settlement payment rights through a transfer.   

Who Reviewed The Documents Submitted to the Court?  Even the Amended Documents Raise Questions

The "Fund Settlement Agreement" states the agreement was entered into on March 16, 2015, but the parties to the agreement signed on prior dates, Jerry E. Sherman. on March 2, 2015 and the Sherman QSF Adminstrator David J. Reino, signed on March 7, 2015. ( Fund Settlement Agreement page 1 and 4)

Section 8 of the Amended Petition date May 9, 2017 raises some questions about alleged facts, stating that "the Defendant's insurer subsequently assigned its obligation to John Hancock Assignment Company", when the Qualified Assignment and Release, dated April 30, 2015, lists the Assignor as the Sherman Qualified Settlement Fund. Think 1.468B-1(C)(2), the so-called  "resolve or satisfy" requirment, a very basic fundamental of QSFs. The QSF must be established to resolve or satisfy one or more contested or uncontested claims that have resulted or may result from an event (or related series of events) that has occurred and that has given rise to at least one claim asserting liability. The Defendant would have already received a General Release when the QSF was funded .

The Periodic Payments Payment under the March 16, 2015 Fund Settlement Agreement and in the issued John Hancock annuity contract of June 11, 2015. show a payment start date of April 1, 2012.[ Sherman QSF Fund Settlement Agreement Article 3, Section 3.1.2 below]

Does anyone need to fire up the DeLorean (left) ?  The paperwork for the Establishment of the QSF was not attached to the Court record. One possible explanation (and this aspect is speculation on my part) that the QSF was established at or about the time the Sherman v Hervert C. Hales case (Erie Counnty Index 0005837/1999) was settled by pre-trial stipulation on  April 12, 2011 in front of Hon John  M. Curran. The QSF was subsequently funded in February 2012, or earlier, given the date of February 20, 2012 on the John Hancock application that bears Bair's signature. Is it possible that David J. Reino, the Administrator of the Sherman QSF agreed to advance fund the Sherman structure to protect the rates?

Copy of Fund Settlement Agreement 3-16-2015

Download 804461_2017_United_States_Periodic_v_United_States_Periodic_EXHIBIT_S__Sherman QSF Fund settlement agreement 3-16-2015

Copy of signed Qualified Assignment and Release

Download 804461_2017_United_States_Periodic_v_United_States_Periodic_EXHIBIT_S__3 QAR eff. 4-30-2015

Copy of John Hancock Life Insurance Company of New York annuity with application signed by John T. Bair,  Conclusive evidence that Bair write the Sherman annuity and together with the court filed papers in this case, present yet another example that Bair and/or companies Bair owned or controlled, engaged in factoring cases he wrote.

Download 804461_2017_United_States_Periodic_v_United_States_Periodic_EXHIBIT_S__4 Copy of JH annuity John Bair xd app

As the examples continue to present themselves in New York court records where a transaction was initiated by CrowFly, Seventh Amendment Holdings  (now MIlestone & Co, LLC) or USPPAC, one naturally wonders whether there was an active campaign to mine and market factoring services to individuals who are, or were receiving periodic payments from a structured settlement brokered by Bair/Milestone Consulting (2012-present) or Bair/Forge Consulting  (pre-2012). I've written about Bair/Milestone's mass communication to trial lawyers in April 2020, to get their clients out of annuities. 

Upon information and belief Milestone Consulting withdrew its structured settlement annuity appointments with insurers issuing structured settlement annuities in or around early June 2022.