by Structured Settlement Watchdog
Judges reviewing structured settlement transfer petitions in Westchester County and elsewhere, must be vigilant at attempts to skewer selling annuitants for more than the rates that they could get from their own annuity issuer as well as potential misinformation about comparisons required under the New York Structured Settlement Protection Act.
Let's look into the Matter of the Petition of Peachtree Settlement Funding, LLC, Petitioner and First Berkshire Hathaway Life Insurance Company, BHG Structured Settlements, Inc. and Alvaro Anton Rubio as Interested Persons pursuant to GOL 5-1702 (NY Supreme Ct., Westchester County Index 56838/2020). Hon. Mary H. Smith is the presiding judge. The Petition was submitted July 2, 2020.
According to his affidavit signed June 26, 2020 and submitted July 2, 2020 Mr. Rubio is employed earning approximately $83,200 annually with 3 dependents, aged 17, 16 and 10, but is 7 months behind on his mortgage and utility bills. He plans to us the $45,238.02 from Peachtree to catch up on these bills with about $9,936.02 for home renovations. Wouldn't it be nice if Mr. Rubio had to sell less or could get more for what he is selling?
The Court was alerted to the fact that Berkshire Hathaway offers its annuitants a discount rate of 6.5 % as part of its Annuitant Hardship Exchange and on May 8, 2020 denied a prior petition under Index 52718/2020. Peachtree's numbers need to come in below that, in my opinion. Charging 2% higher on the current petition is cynical and opportunistic.
NY G.O.L. §5-1703 (d) requires "the price quote from the original annuity issuer or, if such price quote is not readily available from the original annuity issuer, then a price quote from two other annuity issuers that reflects the current cost of purchasing a comparable annuity for the aggregate amount of payments to be transferred". There is no such quote(s) in the Peachtree disclosure associated with the current petition. In the Petition associated with Index 52718/2020 filed in February 2020, which was denied in May 2020 by Judge White, Peachtree's avoidance of a quote from Berkshire Hathaway was highly misleading. As part of one of the largest settlement purchasing companies in America, Peachtree cannot deny knowledge of the Berkshire Hathaway program. Yet Peachtree's statutory disclosure used comparable quotes from MetLife Investors Life and New York Life Insurance Company in the failed attempt to justify a then 19.83% discount rate. If Mr. Rubio had spoken to Berkshire Hathaway as his affidavit attests, then where is the quote from Berkshire Hathaway? Where is the letter that shows what they would pay? The provision in the statute is not intended to be mere window dressing.
Ultimately Berkshire Hathaway responded to the earlier 2020 petition and indicated Rubio would only have to sell $716.25 of his monthly payments in that petition as oppose to $963 per month that Peachtree proposed. See affidavit of Brennan Neville Download 52718_2020_Peachtree_Settlement_F_v_Peachtree_Settlement_F_EXHIBIT_S__13 Affidavit of Brennan Neville 3-13-2020
Rubio stated in his current affidavit that he looked into comparable quotes and purportedly looked into the Annuitant Hardship Exchange program, but alleges in his affidavit to the latest petition, without specificity that this would take 6 months and he cannot afford to wait that long. In the interest of doing the right thing, I spoke with an executive of Berkshire Hathaway this morning and confirmed that the 6 month wait is simply untrue. According to Berkshire Hathaway their petitions take no longer than anyone else. With a stable 290 month cash flow starting right away, Berkshire Hathaway is excellent paper and no doubt a comprehensive search of the market would find other possibilities willing to beat Peachtree's offer as it currently stands in the Petition. Even CrowFly advertises an average discount rate of just over 6% and JG Wentworth, Peachtree's sister company could do better.
There is an order to show cause return date of July 31, 2020.