by John Darer CLU ChFC CSSC
In a recent post on its Structured Settlements Wire, DealFlow Media informed its readers about an otherwise newsworthy recent decision in New York where a factoring attempt was denied by the Court for failure to satisfy the "best interest test". Unfortunately DealFlow media made the pedestrian mistake of referring to certain structured settlement payments as "lump sum awards". That mistake is something one usually associates with "pay per posters!"
If it is to be a credible source of information its writers and editors will have to bone up on the reality that you cannot be awarded a structured settlement. A Court, jury or arbitration panel makes awards. A structured settlement is created as part of a compromise- "a meeting of the minds". Of course, that's why it's called A SETTLEMENT! A structured annuity that is used to fund an award is called a structured judgment. In New York a structured judgment, pursuant to statutory guidelines in CPLR Articles 50A or 50B, would not contain lump sum future annuity payments.
Here's the DealFlow Media quote, with its error emphasized in shocking pink!
"In the third case, which was heard last month, Lebous took into account the previous transactions and disapproved the $100,000 payment that Ciemielewski was attempting to transfer to Lump Sum for $10,000, utilizing his staggered lump sum awards that included a $50,000 payment that is due on May 17, 2019, and one-half of a $100,000 payout that is due on May 17, 2024".
Incidentally, our sources tell us that the market price for Cimielewski's cited payments is AT LEAST 3 TIMES THE AMOUNT that Seneca One was willing to pay. WOW! How about a hand for the Honorable Judge Ferris D. Lebous?
The term "paternalistic" may be used derogatorily to characterize attitudes or political systems that are thought to deprive individuals of freedom and responsibility, only nominally serving their interests, while in fact pursuing another agenda. While some factoring brokers and companies might snort about New York Judges being "paternalistic", in doing his job Judge Lebous created an opportunity for at least an additional $20,000 to get into the tort victim's pocket.