2013 Genex Capital receivables purchase agreement posted on aurorafreelance.com as a typical example that sheds more light on the risk of purchasing structured settlement investments (also known here and there as "recycled structured settlements" and by the misnomer "secondary market annuities") and the deal complexity that is far different from a CD, far different from actually buying a retirement annuity, or far different from accepting a structured settlement when your personal injury, wrongful death, workers compensation or employment liability case is settled.
In bold print at the top of the signature page appears:
- "Risk of Default on the part of the Issuer or Owner and that in the event of default, you may be unable to recover your investment".
- "We (Genex Capital Corporation) undertake no obligation or liability toward you for any failure of the Issuer, Servicing Company, or any other Person to make payment in respect to the Annuity or Receivable or to perform any other obligations under the Annuity or Receivable. You waive your rights to claim against us (Genex Captital Corporation) in these circumstances as set out in Section 5.1 of part 2"
Section 5.1 of the 2013 Genex Capital receivables purchase agreement Version 4 reads:
"Genex undertakes no obligation or liability towards Buyer for any failure of the Issuer, Servicing Company or any other Person to make any payment in respect of any Annuity or Receivable or to perform any other obligations under the Annuity or Receivable. Buyer waives any right it may have to make any claim (for damages or otherwise) against Genex, any other member of the Genex Group and any of their Representatives (the “Released Parties”) arising out of or in connection with any such failure and releases the Released Parties from all such claims, except to the extent resulting from the willful default or gross negligence of any of the Released Parties."
Section 5.2 of the 2013 Genex Capital receivables purchase agreement Version 4 reads:
"Collection of Receivables. Genex will cooperate with Buyer and will provide Buyer with such
reasonable assistance as may be requested by Buyer from time to time in order to allow Buyer to
collect payments under any Receivable. Buyer will indemnify Genex for all Losses which Genex may incur as a result of or in connection with anything done by Genex in pursuance of this section 5.2. In no event will Genex be required to institute any legal proceeding under this section 5.2. unless Genex is entitled to select and employ its own legal advisors and Buyer has indemnified and secured Genex to Genex’s satisfaction against all Losses that may be incurred by Genex in connection with such claim. Genex may, in its sole discretion, require Buyer to take conduct of any proceedings arising under such claim on behalf of Genex, subject in all cases to Genex being indemnified by Buyer against all Losses that may be incurred in connection with such claim and being kept informed and consulted in regard to the progress of the claim.
Section 5.3 of the 2013 Genex receivables purchase agreement reads:
Buyer may, from time to time, receive marketing materials, offers or other communications from competitors of Genex who obtain Buyer’s contact details from public records available as a result of the publication of a court order or other information in respect of a Receivable Transaction or otherwise. Buyer hereby irrevocably appoints Genex its attorney and authorizes Genex to contact any such competitors on Buyer’s behalf in order to demand the cessation of all such communications and to take all such legal or other action as may be deemed reasonably necessary by Genex to stop such communications and seek other relief, including damages. Buyer will cooperate with Genex in connection with the enforcement by Genex of its rights under this section, including by
providing Genex, upon request, with copies of all such offers or other communications from competitors
According to Wikipedia, a certificate of deposit (CD) is a time deposit, a financial product commonly sold in the United States by banks, thrift institutions, and credit unions, but may be sold by wire houses that sell securities (brokered CDs).
CDs are similar to savings accounts in that they are insured and thus virtually riskfree; they are "money in the bank". CDs are insured by the Federal Deposit Insurance Corporation (FDIC) for banks and by the National Credit Union Administration (NCUA) for credit unions. They are different from savings accounts in that the CD has a specific, fixed term (often monthly, three months, six months, or one to five years), and, usually, a fixed interest rate. It is intended that the CD be held until maturity, at which time the money may be withdrawn together with the accrued interest
Last time I checked, the process to buy a certificate of deposit was simple, it can be bought directly at the branch of your bank and it is insured by the FDIC. This latter is one very important distinction. Structured settlement payment rights ARE NOT insured by the FDIC. Neither is a returement annuity or life insurance. The Plymouth, MA financial planning firm should know better.
Canine image: Dreamstime.com