by Structured Settlement Watchdog®
An article entitled "London to Steal Wall St. Crown" by Richard Fletcher and David Smith in London's Sunday Times on March 12, 2006 contains a byline about Peachtree Settlement Funding that is somewhat inaccurate and should be clarified. The reference to Peachtree, cited in full below, is meant to be an example to of a major underwriting deal coming to the London market.
"Meanwhile, one of America’s principal providers of cash settlements to victims of last year’s devastating hurricane Katrina in New Orleans is floating in London later this year.
Peachtree Settlement Funding, which awards lump-sum payments to clients in exchange for a share of their expected future cash flows, is understood to have appointed Bear Stearns and Collins Stewart to lead an initial public offering on the Alternative Investment Market. The float is expected to value the firm at up to £400m."
The assertion that Peachtree Settlement Funding was a principal provider of cash settlements to victims of Hurricane Katrina is inaccurate.
Peachtree Settlement Funding is a factoring company that, among other things, if court approved, pays a discounted sum of cash in exchange for a client's rights to receive structured settlement payments.
These so-called structured settlement factoring transactions (sometimes referred to as "transfers") are defined under the United States Tax Code Section 5891 ("IRC 5891"). Part of the requirements of IRC 5891 are that a court order must approve the transaction as being in the best interest of the structured settlement payment rights seller (transferror), or the transaction will be subject to a nasty 40% excise tax. Furthermore, those states which have enacted structured settlement protection acts have rules about the consummation of such structured settlement factoring transactions. The devastation of Katrina meant that the Court system in affected jurisdictions was in disarray. One example cited on Peachtree Settlement Funding's web site is that they rescheduled Court hearings (something they really had no choice but to do).They also adopted some families, made some contributions and held a fundraiser according to the September 5, 2005 company press release. They have enjoyed some positive public relations from their publication of these laudable efforts and the display of the "Thank you Quilt" it received. However despite this, it was not the case, as the above article suggests, that they awarded cash settlements as Peachtree Settlement Funding is not an insurance or adjusting company.
Peachtree Settlement Funding does not award lump sum payments to clients in exchange for a share of expected future cash flows. Only Courts can make awards.
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