If he's trying to stir up outrage with "Unequal Rights For Those Injured By The US Government" Matt Bracy , General Counsel of Settlement Capital has failed. That is unless you count his counterpart Patricia Laborde, General Counsel at Stone Street Capital whose best recent justification is a time warp back to 2004.
In the podcast, Bracy is resigned to the facts:
That his company and others have spent considerable money in trying to fight the United States to bust up structured settlements and "courts all around the country have decided that they (the United States government) are right".
That the factoring industry has been very heavily impacted by credit freeze
That there are no resources to continue to fight the government on factoring at this time. Perhaps at a future time.
It's not exactly uplifting stuff.
A. The title of Bracy's post is a bit dubious. I'm sure we can agree that structured settlement payment rights are created in settlement documents. Let us not forget that in entering into a structured settlement with the United States (or any other defendant), the claimant, who has been represented by counsel, executes a Settlement Agreement or stipulation of settlement in which they agree to certain terms to receive consideration. Those terms may preclude factoring.
The government chooses to enforce the terms and (as Bracy admits) "courts all around the country" have agreed to uphold its rights as owner of the annuity contract. As I've previously indicated there are other owners of qualified funding assets who have chosen to do the same. Where's the outrage?
B. I have tremendous respect for Matt Bracy, however some of what he says in the podcast is simply not correct. Bracy says that IRC 5891 says that factoring of structured settlement "can be allowed on certain circumstances". That is a bit of a stretch. IRC 5891 has already been twisted, turned and stretched ad nauseum by various other commentators to suit their marketing purposes.
IRC 5891, quite simply, sets out the imposition of a 40% excise tax on the purchaser of structured settlement payment rights and the exceptions to the excise tax. See for yourself by clicking here Structured settlement factoring transactions have been done for many years prior to the effective date of this Internal Revenue Code provision which was introduced as part of the Victims of Terrorism Tax Relief Act of 2001.
C. I am most disappointed by the whining about the bad image of the factoring industry in what Bracy terms "factoring baggage", "misconceptions" and "rip offs". While Bracy's firm and a few others may be a "calmer port in the storm" is it possible that baggage is the result of years of false and annoying advertising by Bracy's firm's competitors. It may win advertising awards, but it sure DOES NOT build prestige.
Earlier today I spoke with a financial adviser who was interviewing me about potentially working together on a very large pending case and the during the discussion the adviser made particular note of his being turned off by J.G. Wentworth and its commercials. In large part it appears that the image of that slice of the factoring industry involved in the purchase of structured settlement payment rights is unfavorable. Several months ago the trade association's general counsel made a recorded statement on the legal Broadcast Network that supports a claim of advertising fraud against many of its members, yet few have changed the advertising. In its fragile state could the industry support the weight of an FTC claim?
In my opinion, since with few exceptions the factoring industry doesn't appear to give a crap about truth in advertising, Bracy's time would be better spent stressing the positives of his company as Kimba in a jungle of Hyenas