Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and Commentary

What's the Difference between Structured Settlements and Annuities? Why JG Doesn't Get Full Marks

by Structured Settlement Watchdog

What's the difference between structured settlements and annuities?

JG Wentworth gets partial credit in a recent Facebook post, but the 800 lb gorilla gets an incomplete for dropping the banana on structured settlements:

• Annuities are an insurance product designed to secure a fixed income stream,
  starting either immediately or in the future.
• Structured settlements are a type of annuity that results from a lawsuit.

Why doesn't JG Wentworth Get Full Credit?

1. A structured settlement IS NOT an annuity

2. According to IRC 5891,  the section of the Internal Revenue Code that is the "Mack Daddy" at the core of the stuctured settlement factoring business,  JG Wentworth's business:

With all due respect to Axar, who indeed is their Daddy, what does JG Wentworth's Mack Daddy  (IRC)  say?

 

IRC 5891 (c)(1) states "The term “structured settlement” means an arrangement—

 

A) which is established by—

(i) suit or agreement for the periodic payment of damages excludable from the gross income of the recipient under section 104(a(2), or (ii) agreement for the periodic payment of compensation under any workers’ compensation law excludable from the gross income of the recipient under section 104(a)(1), and

 

(B) under which the periodic payments are—

(i) of the character described in subparagraphs (A) and (B) of section 130(c)(2), and

(ii) payable by a person who is a party to the suit or agreement or to the workers’ compensation claim or by a person who has assumed the liability for such periodic payments under a qualified assignment in accordance with section 130.

 

So no, we're NOT speaking about

1. An arrangement of flowers

2  dead gourds for the harvest arrangement (after all it is almost the season), or

3. an arrangement of music, such as the Viking chorus in JG Wetnworth's commericals

 

A structured settlement is not an annuity but it is often funded with an annuity.

 

In the context of structured settlements an annuity is one of the acceptable forms of qualified funding asset [ see IRC 130(d)]

 

 

 

 

 

 

 

 

"Mission Opossum-able" | How Would-Be JG Wentworth Bashers Trashed Themselves

by Structured Settlement Watchdog

Possums are known for ransacking trash bins and feeding on garbage when desperate for food. Smelly trash cans attract these

"Never be afraid to laugh at yourself, after all, you could be missing out on the joke of the century"

creatures, and they’ll feed on any leftovers, soda, stale milk, etc. The scent of food scraps inside your garbage cans attracts these scavengers, and they will find the smell. If the trash can has no food or edible substance, they make it messy. Possums are opportunistic feeders and will scatter your garbage for a free meal.  Source: Insectcop.com

Instead of bashing JG Wentworth, the t shirt displayed below and found in various "false parallelograms" all over the Internet, is a font of misplaced feigned outrage. If you have a structured settlement, you're likely receiving stable tax-free income, so why the heck would you need to rummage around in smelly trash cans trying to score more trash, while playing dead?  

 

JP Junksworth, seeing the possible in the "Opossumable"?

 

 

Structured Settlement Company | "A Funny Thing Happened on the Way to the Forum"

by Structured Settlement Watchdog

So structured settlements are NOT a dirty word after all? 

A "Periodic Pumpkin"  Carving Tax Free Smiles Annually

"A Funny Thing Happened On The Way to the Forum"

A year and a half after a settlement planner trashed structured settlements in a missive sent to trial lawyers on one day, while the next day promoting buying factored structured settlement payment streams from a structured settlement factoring intermediary (that the settlement planner is co-founder of and operates out of the same address as the settlement planning firm), the lines continue to blur.

The structured settlement factoring intermediary firm, for whom said co-founder often appears as a voice in written articles on its behalf published in a legal publication, appears in a Google Ad proclaiming itself a "Structured Settlement Company". My my my, as my late granny used to say.  Moreover, one can easily observe through a Google search that the settlement planning firm has also optimized the key word "structured settlement experts" to promote itself.  I don't know about you but I'm filing this under structured settlement humor. for the naturally curious.

As an observer, it's actually quite a flattering gesture to JG Wentworth if I may say so. As I reported in May 2021, the 800 lb gorilla from Chesterbrook Pennsylvania has been all in on structured settlement key words.

See It's Thursday and JG Wentworth/Peachtree Go Fluid as a  "Structured Settlement Broker"

Chegg's Trick Question on Structured Settlements in Present Value Exercise

by John Darer CLU ChFC MSSC CeFT RSP CLTC

"You have a structured settlement and need cash now!" says Chegg, an American education technology company based in Santa Clara, California. "Suppose  you call J.G. Wentworth to sell your structured settlement, which is an annuity paying you $80,000  per year for the next 22 years. If the discount rate is 5%, what do you expect the annuity is worth if you sell it today?" asks Chegg.

Chegg gives you 4 choices, neither of which is the correct answer in the real world

A. $1,053,040

B. $1,025,680

C. $1,760,000

D. $3,080,400.

Why is the Chegg structured settlement question a trick question?

1. A structured settlement is not an annuity. 
2. A structured settlement is a form of settlement in which some part of the consideration for the release of liability is comprised of future periodic payments.
3. A structured settlement may be funded with an annuity, which is a contract issued by a life insurance company.
4. An annuity is a " qualified funding asset", which could neither be owned by any of the tens of thousands of students that Chegg poses the question to, nor any plaintiff who is receiving such structured settlement payments in the real world.
5. Neither J.G Wentworth, nor any company like J.G. Wentworth could ever buy a structured settlement annuity in the real world, unless it were a defendant self funding a settlement obligation to a plaintiff.
6. Price elasticity comes into play as well as does the cost of money, which varies vendor to vendor.
7. The question asks for worth, not present value. Worth may hinge on the amount of market competition encountered by J.G. Wentworth, because a prospective seller has shopped around. A Consumer Affairs review of JG Wentworth retrieved on September 21, 2021  claims their fees range from 9-15%
8. Therefore the purported "expert answer" offered by Chegg, is not correct.
9. 

   Chegg's trick question on structured settlements. Their " expert" answer" is wrong on many levels

 

 

 

 

Is J.G. Wentworth a Structured Settlement Consultant or is It Misleading?

by Structured Settlement Watchdog

J.G. Wentworth is the 800 pound gorilla of the Pennies on the Dollar League  ("Piddly" or the "call sign" PDL for short). J.G.

JG Knows Piddly, but George Is Not Amused

Wentworth's value proposition, like others in Piddly, is to pay more pennies on the dollar than its competitors.  And it does a great job of dominating its competitors if pushed hard enough.  But the fact remains that neither J.G. Wentworth, or any of its sister companies (such as Stone Street Capital or Peachtree) can do better than pennies on the dollar.

In recent times one can observe that J.G. Wentworth (itself or through its related companies) has chosen to "culturally misappropriate"  terms such as structured settlement broker. Now it appears to have misappropriated term "structured settlement consultant".

Does J.G. Wentworth have an insurance license in any state?  Do any of its public facing employees have any licenses or professional designations that could justify its use of the term " structured settlement consultant"? 

Frankly I think that J.G. Wentworth's advertising team are a bunch of comedians, but the laughs are at consumers' expense

See my May 12 2021 post JG Wentworth and Peachtree Financial Now Each Identify As "Settlement Consultants"?

Dockery v Heretick et al. | Amended Motion for Class Action Certification Denied and Summary Judgment Granted

by Structured Settlement Watchdog

While structured settlement annuitant lawsuits against structured settlement factoring companies have increased in the last half decade or so, they've met with mixed success. 

In Dockery v Heretick, et al  US District Court E. PA  Case 2:17-cv-04114-CFK, a civil RICO case, plaintiff Larry G. Dockery alleged the existence of an unlawful scheme between companies who purchase future structured settlement annuity payments, an attorney who represented those companies in connection with such transactions, and other persons, to obtain annuities (actually structured settlement payment rights) from unsophisticated annuitants on unfair terms. Having survived a motion to dismiss on his RICO claims and after engaging in some discovery, Plaintiff sought certification of a class of annuitants who, like him, sold their structured settlement payment rights to companies in exchange for lump sum cash payments and allegedly received less than their worth.

In a 70 page Memorandum Decision dated September 1, 2021, Judge Chad F. Kenney ruled that "because Dockery cannot satisfy each applicable requirement of Rule 23, his Amended Motion for Class Certification will be denied.  Accordingly, the Court need not consider whether Dockery’s claim is typical of the class"

Federal Rules of Civil Procedure 23(a) states:

One or more members of a class may sue or be sued as representative parties on behalf of all only if

(1) The class is so numerous that joinder of all members is impracticable
[numerosity];
(2) There are questions of law or fact common to the class [commonality]
(3) The claims or defenses of the representative parties are typical of the
claims or defenses of the class, and
(4) The representative parties will fairly and adequately protect the
interests of the class.

The Purchaser Defendants argued "that Dockery is not an adequate class representative because his lack of credibility, as evidenced by his contradictory testimony during his two depositions and his admitted severe memory issues, will be a detriment to the class members’ claims. They also argue that Dockery is an inadequate representative because he is not subject to a release signed by putative class members in 2000 that would bar those class members’ claims and because he testified that he only blamed himself for his decision to sell his payments. Heretick further claims that Dockery’s memory issues and inability to read render him an inadequate representative because they preclude him from showing that he is willing to vigorously or fairly represent the class".

Dockery replied "that no memory issue impedes class certification. Reply Br. at 12. For example, the fact that Dockery does not understand himself to have been counseled by a lawyer is no surprise given that the lack of real legal advice is the point of the case. Id. And in any event, the questions to be answered on the issue of adequacy are the qualifications of counsel and whether the class representative has conflicts with the class he seeks to represent.
The Court concludes that Dockery is an inadequate class representative for a slightly different reason. The Third Circuit has noted that “[s]tatute-of-limitations issues also touch on the adequacy requirement.” In re Cmty. Bank, 622 F.3d at 294. Such an issue facing a named plaintiff “may be relevant to evaluating their adequacy as class representatives in the same way any type of defense may be relevant to that inquiry, i.e., named plaintiffs may be inadequate representatives if their claims are extremely weak as compared to the rest of the class.” Id. Therefore, “to the extent the claims of the named plaintiffs–as compared with the rest of the class–are subject to fatal statute-of-limitations defenses, that inquiry may be relevant to whether
they can adequately represent absent class members whose claims do not suffer from timeliness problems.” Id"

Sourced from: Dockery v Heretick, et al  US District Court E. PA  Case 2:17-cv-04114-CFK Document 305 Filed 09/01/21 pp 62-63 and 68-69 of 70

The decision was seen as a "fantastic outcome" by Genex Capital CEO Roger Proctor who emailed me this afternoon (shortly after the decision was published) with some good natured hectoring along with a copy of the decision. 

No word yet on whether or not there will be an appeal of the Court's decision by Dockery.

Peter Vieth of the Virginia Lawyers Weekly covered the story September 20, 2021, citing this author. See Suit vs. settlement buyers, delegate dismissed.

 

It's Thursday and J G Wentworth/Peachtree Go Fluid as a "Structured Settlement Broker"

by Structured Settlement Watchdog

Another day in Chesterbrook and JG Wentworth has chosen to identify as a  "structured settlement broker" and claims to be the industry leader?  Its sister company, Peachtree Financial has today claimed to identify as  a "settlement broker".  Yesterday they identified as "settlement consultant".  Both JG Wentworth and Peachtree are no longer a member of the National Association of Settlement Purchasers so it's all seems rather fluid at the moment.   But can these pennies on the dollar merchants truly be considered structured settlement brokers?  The pennies on the dollar has to do with the purchase of factored structured settlement payment rights, not structured settlements or structured settlement annuities. 

 

 

 

Absurd JG Wentworth Promotion

by Structured Settlement Watchdog

Social media promotion of JG Wentworth has entered into the realm of the absurd. 

"Is it just me who likes this song on CNBC?  @jgwentworth #structuredsettlement" tweets Boodajava with a link to an ancient JG Wentworth commercial.

What's absurd, in my opinion, is zaftig Vikings singing joyfully about a name associated with two bankruptcies, whose value proposition is paying unsophisticated people #penniesonthedollar for their #structuredsettlement payments.   Frankly I prefer to listen to the "Grateful Dead Gourds" than a bunch singinging "berserkers"

The "Grateful Dead Gourds"

 

JG Wentworth's Ass Backwards Approach to Consumers Selling Structured Settlement

by Structured Settlement Watchdog

JG Wentworth ass backward approach to structured settlement annuitants implies that you sell your structured settlement to them for pennies on the dollar

"On Burro'd Time"... Selling Your Structured Settlement before thinking about why is the first stop on the road to financial ruin.

and THEN think about what to do after you have that discounted lump sum. "

What Can You Do After Selling Your Structured Settlement Payments?

"Now, you can use your lump sum to achieve things that might have seemed out of reach before. Here are just a few of the things that some of our customers have used their lump sum to accomplish..." says JG Wentworth as part of its purported " Everything you need to know about structured settlements" 

Not only is JG Wentworth's " Everything you need to know" misleading because it is not literally everything you need to know about structured settlements (far from it, but one wonders why the twice bankrupted, third incarnation 800lb gorilla must resort to this nonsense. 

Read What You Need to Know About Selling Structured Settlements in 2019 '

Two essential messages from the Structured Settlement Watchdog

1. Stop and Think
2. Selling structured settlement payments is a loser 100% of the time, with no exception.

 

 

 

Court Denies JG Wentworth, Seneca One and VA Lawyer Stephen Heretick Motions to Dismiss in RICO Case

by Structured Settlement Watchdog® 

No "RICO Suave" For Defendants

 

RICO lawsuit v Stephen Heretick, JG Wentworth, 321 Henderson and Seneca One

A Federal District Judge in  Eastern Pennsylvania has denied motions to dismiss racketeering claims against Seneca One, JG Wentworth, 321 Henderson  and Portsmouth Virginia lawyer and delegate Stephen Heretick  in the matter of Larry G. Dockery et al. v Stephen E. Heretick et al. and New York Life Insurance Company, et al.Case 2:17-cv-04114-MMB.

Following are the list of motions and rulings by the Eastern Pennsylvania District Court on May 14, 2019:

Defendants' Motions to Dismiss Denied

• Count I of the Amended Complaint alleges violations of RICO, 18 U.S.C. § 1962(c), by
  Seneca, Wentworth, 321 Henderson, and Stephen Heretick  DENIED
• Counts II through IV also allege violations of RICO, 18 U.S.C. § 1962(c), but only against
  Heretick  DENIED
• Count V alleges conspiracy to violate RICO, 18 U.S.C. § 1962(d) against Defendants. DENIED

Other Motions to Dismiss

• Count VI alleges unjust enrichment against Defendants.  DISMISSED
• Count VII seeks a constructive trust against all Defendants and all Nominal Defendants. DISMISSED 
• Count VIII Breach of Fiduciary Duty and Aiding and Abetting Said Breach DISMISSED

Plaintiff Overcame Rooker-Feldman Doctrine to keep case in Federal Court in Eastern Pennsylvania

In their Motions to Dismiss, Defendants argued that Rooker-Feldman  [ see Rooker-Feldman definition below] prevents the Court from exercising jurisdiction over Plaintiff’s claims. Defendants contend that this case is essentially an improper federal appeal of the Virginia state court’s decision to grant the SSA transfer petitions". 

The Court disagreed:

"Plaintiff alleged a complicated, years-long scheme meant to take advantage of annuitants and subvert the review of state-court judges. These allegations raise claims wholly separate from an appeal of the state-court orders, and present more for this Court to consider than a plain lie or fraud on the state court". [Larry G. Dockery et al. v Stephen E. Heretick et al. and New York Life Insurance Company, et al.Case 2:17-cv-04114-MMB Document 108 Filed 05/14/19 Page 21 ]

Noerr Pennington Doctrine Does Not Shield Stephen Heretick, Says Court

The Court also reasoned "Plaintiff’s claims are not based solely on Heretick’s petitioning activities before the Virginia state court. Rather, the Second Amended Complaint alleges that Heretick took part in an ongoing scheme meant to induce annuitants to sell their SSA (structured settlement annuity) streams on unfavorable terms, strip annuitants of their rights to independent counsel, and fashion transfer petitions in such a way that they would be granted despite procedural safeguards. The Noerr-Pennington doctrine therefore does not shield Heretick from Plaintiff’s claims

_______________________________________________________________________________________________________

What is the Rooker-Feldman doctrine?

The Rooker–Feldman doctrine is a rule of civil procedure enunciated by the United States Supreme Court in two cases, Rooker v. Fidelity Trust Co., 263 U.S. 413 and District of Columbia Court of Appeals v. Feldman, 460 U.S. 462. The doctrine holds that lower United States federal courts—i.e., federal courts other than the Supreme Court—should not sit in direct review of state court decisions unless Congress has specifically authorized such relief. In short, federal courts below the Supreme Court must not become a court of appeals for state court decisions. The state court plaintiff has to find a state court remedy, or obtain relief from the U.S. Supreme Court [Wikipedia]

Unlike what has happened in Dockery, structured settlement secondary market defendants have previously been successful in arguing Rooker Feldman doctrine in Taylor v Structured Asset Funding et al., Lafontant v Imperial Structured Settlements et al to remove an action brought in federal court to state court.

________________________________________________________________________________________________________

In denying defendants' motion to dismiss the RICO claims the court reasoned " Plaintiff alleges that he was the beneficiary of an SSA (structured settlement annuity) and that, as a result of a scheme amongst Defendants, he entered into an unfair settlement on terms substantially worse than he would have obtained if he had access to independent financial or legal advice. Therefore, Plaintiff has alleged (1) a concrete loss, i.e., the difference between a fair settlement and an unfair settlement, and (2) that the scheme caused this loss through a process in which Defendants induced Plaintiff to settle without financial or legal advice and obtained judicial approved in a manner that guaranteed a lack of meaningful judicial review. This suffices for purposes of RICO standing.   Read Judge Baylson's Memorandum Decision denying motions to dismiss Dockery

Related News

Last month the judge in the Terrence Taylor case recused himself following a motion made by Genex Capital Corporation on behalf of its investors. Our understanding is that the Portsmouth judiciary felt that any decision made by any one of them would be heavily scrutinized in light of the allegations in the Dockery case. Taylor's case, which has now been pending for over 4 years, will have to wait until a new judge is appointed from outside the Portsmouth circuit. Stephen Heretick was the lawyer representing the purchasers of structured settlement payment rights from Taylor that are the subject of that lawsuit.

The outcome of all of these lawsuits should be of interest to investors who have been sold scam labeled secondary market annuities.