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Chronovo Could be Promoting Annuities Using Red Sox Legend Instead of Bobby Bonilla, NY Mets Madoff Misery

by Structured Settlement Watchdog

Chronovo, which is  based in a suburb of Boston Massachusetts continues to promote annuities using "Bobby Bonilla Day", a “holiday” of sorts celebrated by baseball fans, who use memes and jokes to talk about how the New York Mets pay someone who hasn’t been on the field since 2001 over a million dollars every year until 2035 when there are far better and more relevant choices to illustrate the value of annuities using other baseball players and other sports figures.

The Gratuitous Trivialization of Madoff to Promote Annuities

Why would a rerun of "Creepend at Bernies" be deemed essential to Chronovo to promote the value of annuities, specifically structured settlement annuities?  Bernie Madoff's fraud was the 2nd biggest in US History. Having a value proposition that is NOT gratuitously intertwined with a Bernie Madoff victim would be more approriate. For back story see Madoff Investment Scandal and how it hit former Mets Principal Owner Fred Wilpon 

Unfortunately, but not unsurprisingly, this seems to have been lost on Chronovo, which highlighted the Madoff connection in its most recent Chronovo Chronicle celebrating Bobby Bonilla Day. At least the lack of depth perception stopped short of trivializing Joey Gargan, another convicted felon, a former structured settlement broker and company owner and "Kennedy connection", who remains incarcerated at FMC Butner, where Bernie drew his last breath in April 2021.

There's Nothing Unusual About Deferred Payments to Athletes But There Are Much Better Examples

There's nothing unusual about a team paying athletes deferred annuity payments, but Bobby Bonilla is no Ken Griffey, Jr. or
Manny Ramirez, both of whom have bigger annuities and arguably had greater career accomplishments, by quite some distance. In my opinion Griffey Jr and Manny Ramirez in particular are better examples to promote annuities for any company, let alone, a company from Boston.

I'm a lifelong New York Yankees fan, but in this case, since we're discussing annuities, I'm waxing lyrical about a Red Sox legend in an effort to change the narrative of certain annuity promoters' (at least structured settlement annuity promoters) narrative from Bobby Bonilla to other athletes who had better careers and more significant annuities. 

Manny Ramirez  was a Boston Red Sox and Major League baseball legend and 12 Time All Star.  Manny was a complete hitter, who hit for both power and average, and recognized as one of the best right-handed hitters of his generation, Ramirez finished his career with a lifetime .312 batting average, 555 home runs (15th all-time), and 1,831 RBI (18th all-time). In 111 postseason games, Ramirez posted a .285 batting average with 29 home runs and 78 RBI in being on 2 World Series winning teams.

Ken Griffey Jr.

Griffey Jr.  630 HR,  .284 BA,  1836 RBI,  184 SB, .538 SLG   Griffey, Jr. is a Hall of Famer,  a thirteen-time All-Star and one of the most prolific home run hitetrs in baseball history, 7th in MLB history. Griffey  won ten Gold Gloves as a center fielder and tied for the record of most consecutive games with a home run (eight, with Don Mattingly and Dale Long. He's been on the cover of the box of more than one variety of Wheaties for goodness sakes!

The Manny Ramirez Annuity

Manny Ramirez signed a $160M contract with the Boston Red Sox in 2008, with deferred $1.968MM/year increasing at 0.25% from  2011-2026 (16 payments) Total annuity payout $30,077,936. Here is the schedule: 

2011 — $1,968,677   2012 — $1,973,599  2013 — $1,978,533   2014 — $1,983,479  2015 — $1,988,438  2016 — $1,993,409

2017 — $1,998,393   2018 — $2,003,389  2019 — $2,008,397   2020 — $2,013,418  2021 — $2,018,452  2022 — $2,023,498

2023 — $2,028,557   2024 — $2,033,628  2025 — $2,038,712   2026 — $2,043,809  Source: Boston.com

 

Just in case you were wondering, says Chronovo, the total payout to Bobby Bonilla at the end of this road in 2035 will be $29,831,205.00.  Ouch!

 

Funnily enough, in a 2020 article Sportscasting.com reported that Red Sox Will Keep Paying Manny Ramirez Until He Turns 54

The Ken Griffey Jr. Annuity

Griffey, Jr. has even been on a Wheaties Box

Ken Griffey, Jr.  $112M contract deferred $3.59MM/year from 2009-2024. Despite being retired and not playing for the Reds since 2008,  the 13 Time All Star Hall of Fame slugger Ken Griffey Jr. is the 6th highest-paid players on the Cincinnati Reds.  Total Deferred Payout $57,440,000

Just to remind you in case you were wondering, the total payout to Bobby Bonilla at the end of this road in 2035 will be $29,831,205.00. Ouch!

Better Career Stats than Bonilla, Better Annuity than Bonilla

Ken Griffey, Jr.  $112M contract deferred $3.59MM/year from 2009-2024. Despite being retired and not playing for the Reds since 2008, Hall of Fame slugger Ken Griffey Jr. is the 6th highest-paid players on the Cincinnati Reds. 

Bonilla       287 HR   .287 BA    1173  RBI   48 SB     .472 SLG  6 Time All Star, One time time World Series winner (with the 1997 Florida Marlins)

While a quality player, Bonilla's career stats performed well below Manny Ramirez and Ken Griffey Jr,  his peers with deferred payments

Bobby Bonilla himself was quoted in the New York Post on July 1, 2022 as saying "“I’m probably more famous for that deal than the career I had” 

But for the fact the Mets and its owner were scammed by the late crooked Bernie Madoff, there would be no Bobby Bonilla Day.  Instead of "celebrating" Bonilla, perhaps Chronovo should reconsider their post given Bonilla's deferred compensation peers as a better role model for annuities. Madoff was a crook who destroyed lives and died a miserable death. 

One of the more significant and impactful parts of the July 1, 2022 New York Post article was the statement that Bonilla has never approached the Mets about receiving the funds all at once, instead opting to keep the yearly tradition going.  “I’ve never even thought about it,” Bonilla said.   This statement IS something to get in front of young people of color with structured settlements who are targeted by structured settlement factoring companies when they reach 18 and throughout their 20s. 

Think  "Just Say No. Like Bobby Bo"

Related Reading

Annuity.org Revives Tired "Bobby Bonilla Day" for the Ides of March. Why?

 

"The Cup Chronoveth Over" With Direct Pay "Prophylactic" Press Release?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

Ken Paradis of Chronovo recently remarked that “Our industry has fiduciary responsibility for over $6 billion in premium annually. Trust is our duty as well as

It "Runneth Over"

our collective currency. We must all do everything possible to protect client, claimant and carrier funds", to push its financial prophylactic "Direct Pay". It's a bit of selective exploitation of a recent event and marketing overkill in the same vein as settlement planners pushing "Grillo waivers" for the last 25 years to induce the sale of more structured settlements. "Direct Pay" is certainly not "everything possible".

What Is The Standard Practice for Structured Settlement Premium Submissions?

The standard practice applicable and effective for the vast majority of cases, is for structured settlement premiums to be issued (1) in the form of a check from the defendant, TPA or insurer payable to the annuity issuer or the qualified assignment company, or (2) in the form of a wire or ACH payment directly to the annuity issuer or qualified assignee's lock box, pursuant to wire instructions provided.

Does the standard business practice work?  

A Layer of Marketing Hype That Would Not Have Solved the Gargan case

The direct pay process promoted by Paradis and Chronovo adds an extra layer of processing and marketing hype from what it appears, but it clearly WOULD NOT have solved the problem involving a self insured using a sinking fund out of its annual operating account. 

On June 17, 2020 I thoughtfully addressed the issue of Safe Guarding Funds in an Escrow Trust right after the Gargan case broke:

"There are several options available to ensure the safeguarding of funds in an escrow trust. First is utilizing an institutional trustee versus an individual acting as a trustee. An institutional trustee will have supervision, segregation of duties, financial controls, and insurance that an individual trustee will not have.

State trust law generally provides that a "Trust Protector" can be appointed to act as an independent third-party to supervising the institutional trustee of the escrow or trust. Additionally, a Trust Protector can be empowered to review and approve all trust distributions and other types of transactions.

There can be varying levels of duties and powers assigned to a Trust Protector to reflect the specific needs of the arrangement and level of supervision required. Additionally, the title may be modified to reflect better the particular circumstances (trust advisor, distribution protector, etc.)

It is common for an entity that has a pending liability to create an escrow trust as an informal sinking fund. However, caution should be exercised such that the escrow trust remains the asset of the funding entity to avoid potential economic benefit and constructive receipt doctrine complications for the ultimate beneficiary arising from a "formally funded" trust.

A formally funded account could create a “vested legal right” to funds and trigger the economic benefit and constructive receipt doctrines and thereby prevent the ability to obtain a qualified structured settlement. Ensuring that the escrow trust remains "informally funded" is generally easily accomplished by ensuring that the escrow trust assets remain subject to the claims of creditors of the funding entity while preventing the funding entity from utilizing the funds for other purposes.

Alternative to Escrow Trust

At least one major life insurance company will accept structured settlement annuity premium payments in installments".

Maybe I should have issued a press release?

 

Unfortunately Chronovo Steps on an Another Advertising Duck

by Structured Settlement Watchdog

Just one month after Chronovo's questionable "Bagging the Settlement" smartoon, Chronovo tweeted this, while hashtagging #structuredsettlements and #let's settlethis!

Not really thinking things through

"Better Call Saul" is a popular spinoff from the show Breaking Bad that airs on AMC.  The write up on the show is " Before Saul Goodman, he was Jimmy McGill. And if you're calling Jimmy, you're in real trouble. The prequel to "Breaking Bad" follows small-time attorney Jimmy McGill as he transforms into Walter White's morally challenged lawyer, Saul Goodman".  Says Michael Asimow, in Jewish Lawyers on Television, for the Journal of the Oxford Centre for Socio-Legal Studies "Presumably, however, McGill wishes to capitalize on the Jewish lawyer stereotype exemplified in All in the Family. Jewish lawyers get business because they are thought to be shrewder and less ethical than other lawyers and McGill definitely wants all the business he can get". 

There are risks in the use of stereotypes in business, particularly when ‘Better Call Saul’ only drew 1.6 Million viewers for Season 5 Premiere, according to The Wrap on February 25, 2020. The viewership is less than half of one percent of the USA population in 2018!  

Origins of the name Goodman

The name Goodman is a proud symbol of ancient Jewish culture. Before the late Middle Ages, people were known only by a single name. However, as the population increased and travelers set out on their journeys, it became necessary for people to adopt a second name to identify themselves. Jewish hereditary surnames were adopted from a variety of different sources. Two of the most common types of Jewish family names are patronymic surnames, which are derived from the father's given name, and metronymic surnames, which are derived from the mother's given name. As a Jewish (Ashkenazic) surname, Goodman comes from the male given name Gutman, which means God and man, and was a transformation of many similar sounding names. 

Source: Houseofnames.com

All in the Family

In a 1971 episode of All in the Family, Archie Bunker has an auto accident with a Jewish woman driver. After spouting his usual anti-Semitic opinions, Archie realizes that he can fake a back injury and make some real money. Clearly, this requires a smart but crooked lawyer. Archie and his son-in-law start leafing through the yellow pages looking for one and find Rabinowitz, Rabinowitz, & Rabinowitz. That’s it! But the Rabinowitz firm sends over Whitney Fitzhugh IV, its token gentile. Archie throws him out and cries “Bring me a Jew!”  Sol Rabinowitz soon arrives, but the case falls apart when witnesses (a station wagon full of nuns) declare that the accident was Archie’s fault.

Norman Lear’s inspired idea for All in the Family (1971-1979) was to put all sorts of bigotry and right wing political slogans into the mouth of the buffoon Archie Bunker as a way of ridiculing those opinions. In this episode, Lear was parodying the stereotypes surrounding Jewish lawyers—they are greedy, unethical, and more cunning than other lawyers.

Source: Asimov  (Ibid.  citing "Archie’s Aching Back,” Seas. 1, Ep. 3).

Saul the Lottery Winner is also a Old Dark Joke

So Saul, a 90-year-old Jew, wins the $300 million lottery. He's at the news conference to accept the check, and the reporters ask him if there's anyone he'd like to thank.

"Yes," he says solemnly. "I'd like to thank my brother Eli for lending me the $5 to buy the ticket, and my brother David for driving me to the Circle-K to buy the ticket.

"Lastly, I'd like to thank Adolf Hitler."

The silence was sudden and complete; you could hear a pin drop.

Finally a reporter raises a shaky hand and asks, "D-did you j-just say you w-wanted to thank H-hitler?"

"Yes, of course," Saul replies.

"Whatever for?"

Rolling his sleeve up, Saul points to the inside of his forearm. "For the NUMBERS!"

Cultural Awareness?

A little cultural awareness goes a long way. The CEO of Chronovo's response to my post in January, questioning the timing and apparent lack of cultural awareness of a member of the structured settlement industry, where both alternatives contemplated by the spear toting hunters portrayed in the Chronovo blog image involved killing animals revered in Asian cultures, when millions of animals were dying in Australian wildfires, was met with a "toys out of the pram" ad hominem attack. I regret that it's necessary to have to highlight something else, but it seems necessary, in my opinion.  I offered to review before their publication but so far they have not taken me up on it.  What a pity.

 

 

 

Market Based Structured Settlements | What's in Chronovo's Troll Blog Post? A Dreadfully Misinformed Excited Utterance

by Structured Settlement Watchdog

In  "What’s in the name? An oxymoron and a dangerous deception", Chronovo Settlement Consultants recklessly published a spooky blog by its Managing

Market Based Structured Settlements Are Part of Today's Prime Time Line Up

Director**, Christy Rivera (nee Carone) on Halloween, that reads like someone having been "jilted" at the settlement altar, whose authority is undermined by a critical missing piece of essential knowledge. 

"Jumped The Shark"

Says Christy Rivera, the intent punctuated by an image of a shark shaped shadow moving through a school of fish, "Some settlement planners believe they’ve found a way for injured plaintiffs to receive the tax-free status of a structured settlement while also participating in market-based investments. Settlement planners are now encouraging personal injury victims and their attorneys to invest in new, market-based financial products loosely referred to as “market-based structured settlements.” However, since these products lack all the critical features of a structured settlement, the misnomer is dangerously misleading".  Source: Chronovo website October 31, 2019.

According to the footer to the article it says that Ms. Rivera brings 20+ years of experience to her position as Chronovo Managing Director. My math says that Rivera has been in the settlement business since at least 1999. 

An IRS Private Letter Ruling 199943002 was published on October 29, 1999. For those paying attention, the actual question raised in the submission for what became IRS Private Letter Ruling 199943002 was:

Whether periodic payments of damages that are calculated pursuant to an objective formula based on the performance of the Standard & Poor’s 500 Stock Index and/or a mutual fund portfolio designed to achieve long-term growth of capital and moderate current income are "fixed and determinable as to amount and time of payment" under § 130(c)(2)(A)

The settlement agreement will require the defendant to make periodic payments both of a specified dollar amount (specified payments) and of a variable amount (variable payments) due on specific payment dates. The amounts of the variable payments will be calculated pursuant to an objective formula based on the performance of the Standard & Poor’s 500 Stock Index and/or a mutual fund portfolio designed to achieve long-term growth of capital and moderate current income. Under the objective formula the variable payments will increase if the net investment return of the portfolio is greater than the period equivalent of an assumed annual investment rate of percent and assumed annual equivalent expense charges of percent; will decrease if the net investment return is less than the period equivalent of percent; and will remain the same if the net investment return just equals the period equivalent of percent.

MetLife offered a variable structured settlement product called Settlement Plus for a period of time starting in 2000.  A firm that Rivera was formerly associated also offered market based structured settlements at the time of association.

According to Sean Coleman, President and CEO of Structures, LLC

Settlements Plus™ is the next evolution of structured settlements, created as a valuable tool to augment a fixed annuity-based structured settlement when discretionary dollars are available. It offers attractive options for large-dollar settlements while providing the defendant/insurer with a full release and elimination of contingent liability. A market-based solution is not the right fit for every plaintiff, but for those with discretionary settlement dollars, it can help provide a solid solution for resolving a claim. (emphasis added)

IRC Section 130(c)(2)(A) requires payments be “fixed and determinable as to the amount and time of payment”.• Internal Revenue Service refined definition in a series of private letter rulings. PLR 199943002 (variable annuities) and 201435006 (fixed annuity with index-linked adjustment rider).• Fixed obligations must be set forth in the terms of the settlement agreement; and determinable payments that can be calculated based on an objective formula.

Units: Settlement dollars are allocated as $10 units and the unit value at the time payments are due is determined by the underlying investment. At the time of the settlement the plaintiff decides how many units are to be paid and when. Payment options include quarterly, semi-annually, annually and/or lump sums. Example: $250,000 ÷ $10 = 25,000 units

Rivera's post defies Chronovo's marketing message which emphatically states "The “new time” in structured settlements has become its primetime standard.  If you label yourself a structured settlement consultant you owe it to your clients to be familiar with the "primetime line-up" and to stay current. The financial services industry of which the structured settlement and settlement planning industry is a component is dynamic. 

**Update: Chronovo has removed the troll post by Christy Rivera, who apparently has left Chronovo for another structured settlement brokerage firm.  4/15/2020

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