by Structured Settlement Watchdog
Seneca Originations, LLC pulled an "if you like my Boddie and you think $25,000 is sexy, c'mon Judge-y let it go" (through) with the Supreme Court of the State
of New York in Chenango County last summer. The deal involved Catherine A. Phillips who would sell $104,000 in structured settlement payments from Metropolitan Life Insurance Company structured settlement for $25,000. Worse than 25% for payments from an insurer that has been in business and keeping its promises since 1868!
Selling your structured settlement is, without exception, a pennies on the dollar money losing value proposition. Our sources tell us that Catherine Phillips should have been able to get $45,000-$50,000 for her payments with a 6.1%-7.0% discount rate.
What was shocking was the Affidavit Support o signed by Rod Boddie , the General Counsel of Seneca Originations, LLC on June 6, 2019, a lawyer and member of the Maryland Bar under oath under penalty of perjury that the what he declared is true and correct. As they say "Every picture tells a story don't it?""
Boddie Affidavit Submitted to Chenango Court Misrepresented Brokerage and Investment Banking Firms as Insurance Companies
"...the assumption that companies such as the settlement obligor and annuity issuer are financially solid and credit worthy may be misguided, and one needs to look no further than to the recent plight of American International Group and the material downgrades of its ratings as evidence thereo, dozens
of insurance carriers (including those that issue structured settlement payments) have gone into receivership, liquidation or rehabilitation. For example, Reliance Insurance Company, Executive Life Insurance Company of New York and Confederation Life Insurance Company were once highly rated insurance carriers and all are now either in receivership, liquidation or rehabilitation. As reported by Moody's Services and Standard and Poor's, over the last few years, many insurers have suffered material downgrades In their credit quality, e.g., State Farm Life Insurance Company, Wachovia Corporation, Washington Mutual Inc., The Bear Stearns Companies,Inc., Lehman Brothers, American International Group, ING Life Insurance and Annuity Company, USF&G, CNA Insurance, Safeco Life Insurance Company, Royal Insurance Company of America, and State Farm Mutual Automobile Insurance Company. Downgrades of credit quality adversely affect the credit facilities employed to fund the purchase of structured settlement payments. These downgrades also affect transactions even after completed, which ultimately drives up the costs incurred by purchasers in financing the acquisition of structured settlement payments. [see Boddie Affidavit para 6 6-6-2019]
Why is Rod Skewered?
- None of the above yellow highlighted companies thrown into Boddie's junk pile of misdirection in his affidavit, is/was a insurance company!
- Metropolitan Life Insurance Company has been in business keeping its promises since 1868.
- At the time of Boddie's affidavit, Metropolitan Life Insurance Company was and still is rated A+ by AM Best Aa3 by Moodys
- Not a single AIG subsidiary life insurance company annuity funded structured settlements has failed to make payments to structured settlement payees.
- Confederation Life was inherited by Pacific Life in 1999 and as a result we have one of the industry's finest companies
- Boddie essentially frames "recent" as a time frame of between 11 and 27 years.
- How many times has JG Wentworth filed for bankruptcy since 2009? The Answer is Two.
The same month as Boddie's affidavit, Stan Fitzpatrick, then of Rightway Funding, a Fort Lauderdale company that brokers structured settlement factoring transactions and a competitor of Boddie's company, contacted a New York structured settlement annuitant that I know and misrepresented to the client and to me, that Metropolitan Life Insurance Company was going out of business.
Boddie's Affidavit submitted to Chenango Supreme Court Was Way of the Mark on Range of Possible Discount Rates
Because of the cost associated with purchasing structured settlement payment rights, the secondary market for the sale of structured settlement payment rights is small. There are a handful of companies currently purchasing these rights. Competition in this market place dictates the discount rates that can be obtained given the cost of acquiring these payment rights. Although competition exists among companies that acquire payment rights, because of the expenses involved the typical effective discount rate charged to the seller is between 15% and 25%.
Why is Rod Skewered?
- The National Association of Settlement Purchasers states that an acceptable range of discount rates is a lower between 9% and 18%. NASP also says one should contact more than one funding company.
- An online calculator for Crowfly, LLC a Buffalo based online platform that acts as a purported exchange for sellers and buyers indicates that the deal was worth an estimated $55,345. There was tons of fat in Seneca Origination's crappy deal for the seller. Other sources said $45,000-$50,000 was possible for an educated seller with proper independent professional advice. Either way puts Seneca Originations in the dust.
- Boddie's affidavit to the New York Supreme Court in Chenango County contains an admission that "the true value of Assigned Payments in the present case is properly based on what a willing buyer would pay a willing seller in this factoring market" If that's the case then the true value is twice what Seneca paid Phillips. Why would a lawyer try to defend his company's crappy rate by mispresenting the market?
Boddie Attempted to Further Justify Seneca Origination's Above Market Rate by Comparing It to Credit Cards
Boddie stated that "the effective interest rate of Catherine Phillips' transfer which is favorable in comparison to industry standards and is comparable to major credit card rates. As a comparison, Wells Fargo Cash Back card features an APR range of 16.24% to 28.24% and the U.S. Bank Cash+ Visa Signature Card featured an APR range of 16.24° to 25.74%. The $25,000.00 that Catherine Phillips is receiving is the present fair market value for this type of transaction". [see Boddie Affidavit para 11}
Why is Rod Skewered?
- Using credit cards as a way to justify Seneca's above market rate is deceptive because credit card loans are not secured by a 151 year old insurer.
- Industry standards in an industry that is unregulated and no licensing is currently required.
During Boddie's tenure as General Counsel of Seneca One, at the same address as Seneca Originations, LLC
- Seneca One shafted Lauren Nesbitt for in excess of $1 million in profit spread
- Seneca One marketed two cans of high grade bullshit known respectively as the National Structured Settlement Registry and the National Settlement Registry. Nobody needs to register their structured settlement with anyone.
- Seneca One mispresented itself as being a Better Business Bureau Accredited Business with an A+ rating, at a time when it was unrated and not accredited.
- Represented unlicensed individuals as Annuity Specialists
- In 2018, Seneca One undermined the entire structured settlement secondary market in a single tweet that quoted hedge fund titan Paul Tudor Jones "Don't focus on making money, focus on protecting what you have". Protection in the form of doing pennies on the dollar deals.
- Seneca One sent mailings out under the trade name " Settlement Accounting"
Case Cite: Seneca One Originations, LLC, Petitioner v MetLife Tower Resources Group, Inc., Metropolitan Life Insurance Company and Catherine A. Phillips, Respondents Supreme Court of the State of New York County of Chenango, Index 2019-5284 Download Boddie Affidavit in Phillips case