Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

Securant Bank & Trust Troubling Stats | 4th Biggest Loss of Wisconsin Banks

Wisconsin Banks continued their steady improvement in the second quarter of 2012, but Securant Bank and Trust, whose trust operations are promoted by certain settlement planners and national marketing organizations,  continues to suffer some of the worst losses, according to this article in Milwaukee Wisconsin Journal Sentinel on August 28, 2012. The Journal Sentinel cited an August 28th report released by the Federal Deposit Insurance Corporation (FDIC).

This author conducted some additional research and discovered some absolutely shocking financials

A. Troubled Assets increased by 25% from $16.14M  Q1 2011 to  $20.58M  Q1 2012. Securant's troubled asset ratio has steadily increased in the last 5 years and now exceeeds 105. The national median is about 17% of Securant's trouble asset ratio.

Troubled Asset Ratio is derived by adding the amounts of loans past due 90 days or more,  loans in non-accrual status and other real estate owned (primarily properties obtained through foreclosure-see below) and dividing that amount by the  bank's capital and loan loss reserves. It is reported as a percentage.

See How Healthy Is Your Bank? Securant Bank & Trust     

Source: banktracker.investgativereportingworkshop.org American University

B. Other Real Estate Owned doubled year over year!

C. Capital Decreased by about one third from $19.75M to $12.97M

D. Assets shrunk by 12%

Related Reading

"When a Bank Fails , Are Trust Assets At Risk?

Securant Bank & Trust's Texas Sized Texas Ratio; Very Weak Weiss Rating "E" ek!"

 

 

Protect Your Lawsuit Recovery | Avoid Penny Stock Pump and Dump Manipulators

There is a growing body of evidence that elaborate social media networks are being used in dubious link building and to fabricate testimonials,  to promote certain purchasers of structured settlement payment rights and fabricate complaints and documents with the in tent to harm competitors and others whose business interests are not aligned with the beneficiaries of the scheme .

But social media is being used by "actors' to augment the traditional approach to the classic 'pump and dump" stock promotion scheme. Based on what I have just seen and heard it is time to sound the alarm bell. 

I received a call the other day from a Los Angeles California area based company that was pitching penny stocks (a/k/a microcap stocks). As I heard it, the scheme  works like this:

Step 1

Company A contacts and draws interest from lead investors who each agree to buy 10,000 shares in a touted penny stock to show to others that there is interest. The pitch from company A lays out the scheme and Company promises that it will let the lead investors know exactly when to get out  (2 weeks into the promotion the solicitor told me)

Step 2

Once the lead group of investors has been 'filled' Company A begins to promote  ("pump") the stock through the Internet,  drawing in the secondary group of investors

Step 3

Company A stops promoting the stock and the stock plummets. Secondary investors and greedy initial investors lose their shirts.

The promoter who contacted me related some "recent examples of recommendations" that included a stock that they "recommended " at 17 cents" that went to $2.40 and then down to 5 cents between April 2012 and June 2012. I was shown three examples whose charts looked like a squished bell curve.

Plaintiffs should be aware of pump and dump schemes. Protect your recovery! Know one when they hear the approach and AVOID.

SEC Website Information About Pump and Dump Schemes

 

 

Bearberry Suit | Purchaser Sues Structured Settlement Annuity issuer

Does a structured settlement purchasing company's rights under a structured settlement annuity sale and assignment agreement trump a structured settlement annuity issuer's right to service its own annuitants (and offer them a better and possibly less costly deal?)  A  structured settlement purchasing company called Bearberry Square Funding, LLC apparently thinks so and sued the annuity issuer.

In the complaint of BEARBERRY SQUARE FUNDING, LLC, Plaintiff,  v BERKSHIRE HATHAWAY LIFE INSURANCE COMPANY OF NEBRASKA, a Nebraska Corporation, and Does 1 through 10, Inclusive, Defendants.2012 WL 872312 (2012) Superior Court of California. Los Angeles County, Plaintiff alleges that

"On September 17, 2011, Plaintiff entered into Structured Settlement Annuity Sale and Assignment Agreement with Kristen Lucas (“Assignment Agreement”). Under the Assignment Agreement, Mrs. Lucas agreed to sell or transfer to Plaintiff her remaining payments under an annuity contract with Defendant BERKSHIRE HATHAWAY LIFE INSURANCE COMPANY OF NEBRASKA in the amount of $163,000 in exchange for a lump sum purchase price of $67,428.00

Upon receiving notice of the Assignment Agreement, Defendant BERKSHIRE HATHAWAY LIFE INSURANCE COMPANY OF NEBRASKA, through its representatives, contacted Mrs. Lucas and offered to “accelerate” the payments due under the annuity contract and thereby unlawfully and tortiously induced Mrs. Lucas to rescind the Assignment Agreement...

Plaintiff is informed and believes and thereupon alleges that Defendant BERKSHIRE HATHAWAY LIFE INSURANCE COMPANY OF NEBRASKA intentionally acted to disrupt the relationship between Plaintiffs and Lucas by, including other things, offering to Mrs. Lucas to accelerate the payments under the annuity contract. Said interference was made so that the Defendants, and each of them, would gain a financial benefit at the exclusion of and to the detriment of Plaintiffs. And, in fact, as a result of said interference, Mrs. Lucas did timely rescind the Assignment Agreement  (emphasis ours)"

Comments and Questions

• I am not a lawyer but offer my observations and opinions as a structured settlement expert who has a keen interest in this area of the law.
• With a California structured settlement factoring transaction, is a deal "a done deal"  BEFORE, in compliance with the California Structured Settlement Protection Act,  a judge approves the transaction as being in the best interest of the structured settlement annuitant, taking into account their dependents? 
• Notwithstanding the discount rate 8.98% that Bearberry offered the annuitant, the Sale and Assignment Agreement, which this author obtained from the California Superior Court states.  at 5.10,that the seller should obtain independent professional advice.
• Does Bearberry Square Funding, LLC, or any other company entering into similar agreements,  have a duty to inform the structured settlement annuitant that they can and should get a competing quote from the annuity issuer, if it is known to the purchaser, or common knowledge that the annuity issuer makes such offers? 
• For example, I have personally received calls from structured settlement annuitants with contracts from Allstate Life Insurance Company or Allstate Life insurance Company of New York, who were not informed of their rights under Allstate's Advanced funding Exchange Notice by the settlement purchaser, who proceeded to offer the annuitant a rate that exceeded the AFEN discount rate. As an aside that rate is now 8%.
  
• That Berkshire Hathaway Life Insurance Company of Nebraska would take steps to assist its own structured settlement annuitants is not without precedent [See IN RE: RAPID SETTLEMENTS, LTD. and Rapid Management Corp. Rapid Settlements, Ltd. and Rapid Management Corp., Appellants, v. BHG Structured Settlements, Inc., Berkshire Hathaway Life Insurance Company of Nebraska and Bryan Cory Steele, Appellees  Texas Court of Appeals Nos. 09-06-057 CV, 09-06-155 CV September 14, 2006.  Copy of opinion here.  
• It's hard to tell on the face of it who the heck Bearberry Square Funding, LLC is,  because the company has no website. According to records on file with the State of Delaware, the company was incorporated June 29, 2011. A review of the Sales and Assignment agreement shows a buyer's representative as Robert Shapiro,  who is known to be the founder of Woodbridge. West Virginia Records show an address consistent with Woodbridge's California office.
  
• In its complaint Bearberry concedes that Lucas "did timely rescind the Assignment Agreement"'. Per California Insurance Code which states, in pertinent part,  'At any time before the date on which a court enters a final order approving the transfer agreement pursuant to Section 10139.5, the payee may cancel the transfer agreement, without cost or further obligation, by providing written notice of cancellation to the transferee" 
  

 

 

 

 

Symetra Calls Time on External Buying of Structured Settlements

Symetra has stopped buying structured settlement payment rights from external sources, according to industry sources. 

Symetra had previously purchased structured settlement payment rights through a subsidiary called Clearscape Funding since about early 2006, a move that was seen as controversial within the primary structured settlement market and was the basis for this author's request to withdraw his appointment with Symetra at the time.

Symetra continues to offer liquidity to structured settlement annuitants on structured settlement obligations that have been assigned to Symetra Assigned Benefits Service Company, a qualified assignment company which is believed to be the recipient of a notable Private Letter Ruling 200918001 which dealt with restructuring of structured settlement payments.

Offering liquidity to its own structured settlement annuitants is not a bad thing only IF the discount rates are competitive with what is offered in the secondary marketplace for structured settlement payment rights. For example, Allstate recently announced an 8% discount rate on its Advanced Funding Exchange Notice (AFEN).   

A structured settlement annuitant seeking liquidity should first contact the annuity issuer to see what options are available and then, at the very least, such annuitants could use those numbers to shop around and negotiate with external buyers for a better rate.

 

 

 

Selling Your Structured Settlements has Facts Wrong on Hartford Life

by John Darer

Selling Your Structured Settlement (SYSS),  a Missouri based factoring intermediary,  published a "News" item on its website on July 7, 2012 entitled "Would You Take A Structured Settlement from The Hartford?'

SYSS  "reports":

"Only slightly deterred by the decision against the company in 2010, Hartford has re-entered the structured settlement annuity market vowing to expand its annuity business by sugarcoating the shady practices that caused them to hastily exit the market for five years during Spencer v. Hartford".

FACTS

1. At the time of the SYSS posting Hartford Life Insurance Company  had been 3 months post withdrawal from the structured settlement market place again. 
2. Hartford did not hastily exit the market for 5 years during Spencer v Hartford. It sold structured settlement annuities throughout the litgation. It exited the market for a little over one year, for reasons other than Spencer v Hartford. The company withdrew in November 2009 and returned in the Spring of 2011. Mark Wahlstrom and John Darer covered the story for Legal Broadcast Network on October 30, 2009 here
   
3. The withdrawal in 2012 was part of an omnibus withdrawal from the individual annuity market place.
4. "Hartford Financial Services Group Inc. has announced it will stop selling individual annuities and seek buyers for parts of its life-insurance unit" Bloomberg News March 21, 2012
5. The Hartford is the insurer for the American Association for Retired Persons (AARP)  Auto and Home insurance porgran.
   

If SYSS wishes to be a credible source and provide information of value to consumers then SYSS needs to employ writers who do better research. In this instance the reporting is grossly inaccurate and irresponsible. Plenty of information is readily available in the public domain for those seek it.

 

Municipal Bonds v Structured Settlements

by John Darer

Municipal bonds are sometimes touted to plaintiffs by financial advisors and stock brokers in competition with structured settlements. 

After all both are income-tax-free, right?

But the headwinds are brisk and rippling municipal bond red flags! Caution is warranted.

In the second quarter of this year, Moody’s downgraded some 300 U.S. municipal bonds issuers. This many downgrades of municipal bonds in a 90-day period represent the greatest number of downgrades in municipal bonds this decade. Some highlights: Moody’s downgraded $6.9 billion in municipal bonds associated with Detroit, Michigan, and cut the credit rating for Stockton, California. Stockton subsequently filed for bankruptcy on June 28th (Source:  Financial Times, August 9, 2012

U.S. municipalities are facing declining property taxes, rising unemployment and large debt loads. Property tax collection, which is considered a main source of revenue for towns and cities declined again in the first quarter of 2012. After adjusting for inflation, property tax collections by U.S. municipalities have dropped for the past six quarters. (Source: Wall Street Journal, August 13, 2012.)

According to Michael Lombard, MBA, who writes for Profit Confidential,  the majority of the municipal bonds that are issued do not carry any insurance to protect the municipal bond buyer!

Lombardi observes in a newsletter transmitted August 22, 2012, that "since the credit rating agencies such as Standard and Poor’s and Moody’s do not rate all the municipal bonds, the situation could be even direr. As a matter of fact, there were 36 times more defaults of municipal bonds reported by Federal Reserve than those reported by the credit rating agencies". He cites the August 15, 2012 Washington Post "The total market for municipal bonds is $3.7 trillion, but Standard & Poor’s tracks only $1.3 trillion worth of municipal bonds".

Do Insurance Brokers Have A Duty to Offer The Best Rates?

by John Darer

The question of whether insurance brokers are required to obtain the lowest cost insurance that meets the insured’s needs was recently addressed by the Missouri Supreme Court in the case of Emerson Electric Co. v. Marsh & McLennan Cos., 362 S.W.3d 7 (Mo. 2012).

Emerson alleged that

• Marsh attempted to steer the business to a few insurers that agreed to pay Marsh extra volume based contingent commissions.
• Marsh had breached its duty of loyalty to Emerson by not purchasing the lowest cost insurance that met Emerson’s needs because Marsh steered business to secure the alleged “contingent commissions” from the insurers involved with the ultimate placement

The Missouri Supreme Court found that:

• while Marsh owed Emerson a duty of loyalty, the duty of loyalty DID NOT include a duty to obtain the lowest cost insurance that met the insured’s needs absent a specific agreement to do so.
• the broker's duty of loyalty to the client does not require them to disclose contingent commissions to its insured.
• the broker still has a fiduciary duty to use reasonable care, skill and diligence in procuring insurance. Failure of that fiduciary duty would be legally actionable, not because it represented a breach of the duty of loyalty but because it would constitute a failure to exercise the degree of care required in procuring a policy for the insured generally

Insurance Journal carries the story here

How if anything does this decision impact the conduct of brokers of structured settlements in the primary and secondary structured settlement market?

Primary structured settlement market

Arguably the story of Executive Life Insurance Company of New York is a good example of where the "best price"  [and lack of diversification] ultimately proved to not necessarily be the best thing for the insured (annuitant), regardless of whether the advocate for best price was the structured settlement broker, the plaintiff attorney, the plaintiff themselves, or the insurer.

Secondary structured settlement market

Do the same legal principles law even apply, even though some loosely use the term "annuity" "structured settlement" and "broker" when they are talking about structured settlement payment rights?  A number of individuals or entities operating in the structured settlement factoring space claim to be able to get the best price. The question is the best price for sellers or best price for investors and what. if any duties are created. What is the consumer's or investor's expectation

Consider that New Leaf Structured Settlements, a factoring company that advertises  'Home Of the Best Price & Fast Funding Guarantees" but the fine print states the following:

*Customer must request Guarantees in writing from Company  (New Leaf)  prior to the execution of the contract to sell future structured settlement annuity payments and Company will provide both guarantees in writing as part of the transactional documents selling future structured settlement payments for a lump sum of cash. We make these offers as part of our unwavering commitment to be the best purchaser of structured settlement annuity payments.  (emphasis ours)

This seems to acknowledge the issues raised in the Emerson case.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Social Media Gaffes-4 Imperial Structured Settlements 'High Fat Diet"

by John Darer

Imperial Structured Settlements shot itself in the foot Saturday night when it released an advertisement about comparison shopping that asks this question:

"So what is the best way to compare structured settlement companies to find the best fit for you?";

followed by this answer:  "Look at this salad and think: Service, Options and Cost", and the picture below.

 Given that "cash now pusher" Imperial is known for the high discount rates* it charges to sellers of structured settlements, pictures of these  "buckets of fat" provide both a stunning and "mouthwatering" display of self-deprecation.

The fact is that "artery-clogging" discount rates mean less money for sellers of structured settlement payment rights. Perhaps this provides an explanation for the paucity of greens in the Imperial funding "salads"

* according to the form S-1 filed by Imperial Holdings on January 12, 2011, at page 3, the weighted average discount rate charged to sellers for the first 9 months of 2010 was 19.3%. moreover, the 4 year company trend was rising.

 

 

Structured Settlement Factoring PR Wagon Needs To Hitch on a New Wheel

by John Darer CLU ChFC CSSC RSP

Mr. Andrew Skaggs, the Kentucky structured settlement annuitant who I assisted pro bono (as has been our customary practice involving selling structured settlement annuitants, whether we've written them or not) before being subject  has come out again and spoken out in my favor as well as slamming the business practices of the structured settlement factoring industry. It is important to emphasize that the letter is raw and from a structured settlement annuitant recounting his experience with the structured settlement factoring process.

Here is the Structured Settlement Annuitant Andrew Skaggs 8-17-2012 letter

Someone involved with the later stages of the Andrew Skaggs transaction, or someone in their "orbit" is obviously behind the "hate JD "website 4structuressucks.com and the continued display of ongoing false and defamatory postings therein. which seek to distract from valid questions being asked of certain companies and their business practices and to neutralize the loudest public voice that brings these questionable business practices to light. 

The field is getting very narrow since there are now multiple posts that can be tied to information known to one company to the exclusion of others involved in the Skaggs transaction. The needle has swung violently towards the side of implausible deniability.

As Mr. Skaggs observed, "ALL (of)  you who are threatened by John Darer's campaign of TRUTH should have quite a lot to think about".

Thank you again Mr. Skaggs for sharing your thoughts.

 

 

"Cristina Marquez" Attacked For Lies by Structured Settlement Annuitant

In a recent post the sock puppet Cristina Marquez, who is believed is to be an imaginary character controlled by a sadistic and cowardly factoring company operative, made some pretty strong libelous accusations about me that have really fired up the structured settlement annuitant who was the subject of the post.

The annuitant in question, a Mr. Andrew Skaggs from Kentucky, contacted me back in June 2012 to have a discussion about the advisability of selling some of his structured settlement payments.  Mr. Skaggs has responded to Cristina Marquez and, by proxy, the person pulling her strings. While I gave Mr. Skaggs the opportunity to have his name redacted, he felt so strongly about the wrong of the sock puppet's August 13, 2012 post and the 4structuressucks.com website that he permitted his name to be used . The email is a long one so I have chosen to provide an extended excerpt.

Here's what Mr. Skaggs says (bold emphasis is ours)

'I can't even stand to quote this post by Cristina Marquez but being how she felt she could so recklessly make a post clearly about my recent negotiations concerning MY structured settlement situation I will quote her lies so I can make it clear she has NO right nor has any knowledge of the TRUTH regarding my personal business. SO & I quote "One of John's recent client's was so disappointed with the low offer he got from... that he took the bull by the horn's & struck out on his own to find Novation Capital who offered $10,000 more than ...". This is Total BS! Complete false information!! It is nobody's business who I spoke with, what negotiations were made, & how much more I received by Novation Capital. ALL of what she posted are lies!'

'For the record & sake of the real truth John Darer had NOTHING at all to do with who I chose to call or negotiate with! John Darer was actually a HUGE HELP to me in regards to taking time with me on multiple occasions, answering all of my questions & MOST IMPORTANTLY helping me to understand the importance of "shopping" around to find the BEST deal to suit me, my family, our future, regarding the dire situation I was faced with. He always returned my calls & became a trusted confidant whom I felt gave a shit about what I was looking to get/need as far as negotiating my structured settlement. John Darer had nothing to do with my disappointment with the ... company nor did my disappointment with that company have ANYTHING to do with money in any way!'

Lastly as for this Cristina Marquez (if that's even your real name) As I looked at this structuredsettlementssucks website & seen ALL the posts from YOU, I can only conclude that you either have too much time on your hands & choose to use it only for hateful, vile, disgusting, degrading & just plain SICK posts on the internet OR you are just a disgusting human being that feels the need to be a bully & find SELF happiness in spewing lies & vile from yourself on a very alarming, overwhelming basis! For the record you truly need psychological help, serious clinical help to learn to use your time in a more normal truthful manner. Dedicating a "hate site" towards John darer is beyond anything I have ever seen in my life! It seems very clear to me that you obviously have some sick obsession towards bullying & posting sickening things without factual truth, nor any of your business behind it! I urge you to delete your 8/13/2012 post concerning MY PERSONAL business that you based on LIES!! I also strongly urge you to seek professional help asap!! It's SO easy to hide behind a computer screen typing away all your hateful comments about John Darer & lies about people you do NOT even know like myself! John Darer is a very decent human being who does NOT deserve the crap you are consistently typing up about him! Your site also states there has NOT been anyone that has sent in a nice post about John Darer, I honestly do not think you would post it if anyone has or would!! I have a lot of nice things to say about John Darer & how he took time to help me out no matter the length of time I needed as well as gave me options to think about, his honest opinions (which were always very helpful) & actually cared to listen. Unlike almost all of the structured settlement companies that were only interested in fattening their pockets at the cost of my money that I suffered greatly to earn!!
 
Cristina Marquez it should NOT be your concern in any way if John Darer is married, how he makes his money, who he sleeps with, ECT ECT ECT ECT ECT!! You should take one minute if you can even spare a measly minute away from your HATEFUL campaign against John Darer to look at yourself & think about the skeletons in your closet before making up lies & disgusting accusations towards him! I am SO DISGUSTED with this "hate site" it has the whole Mean Girl, Bully high school, immature, but twisted sick & vile theme all over it!! SHAME ON YOU CRISTINA MARQUEZ SHAME ON Y O U!!!!!!! Karma is real & is a REAL BITCH!!
 
John Darer you keep on revealing the TRUTH to all of us annuitants that deserve only the truth about the sharks & piranhas out to take all they can from us & OUR MONEY!!!!!!! Mr. Darer you have been a tremendous help to me & I look forward to continue business with you & listening to your advice! If it weren't for you I would have gotten "screwed" out of my own money as I did in the past with (...) THANK YOU & keep on keeping on!!"

I believe what Mr. Skaggs wrote (and I have a copy of the whole email ) is self-explanatory, but I' d like to make a few brief comments:

1. This is a real  structured settlement annuitant folks in the primary and secondary market, not the imaginary stuff that Marquez writes about. The actions of the factoring operative behind "Marquez" have scarred the factoring industry and it seems to me that for the sake of the industry they should conduct an investigaton and participate in seeing this nonsense is stopped.

2. Mr. Skaggs has asked Cristina Marquez to remove the August 13, 2012 posting

3. Mr. Skaggs and his wife deserve a lot of credit for doing what is right, coming forward and displaying considerably more bravery than the Cristina Marquez puppeteer. I am grateful to them for speaking out.'