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SuttonPark Structured Settlement Payment Servicing "2 Week Delay", "Nobody Returns Calls"

by Structured Settlement Watchdog

Structured Settlement Sellers Experiencing Payment Delays From SuttonPark on Remainder Payments?

I have received a number of calls from anxious structured settlement annuitants, who have sold only partnot all of their structured settlement payments and are affected by the troubles at SuttonPark See 777 Managing Partners Resigned in May | Mary Walsh Substack a Must Read - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com)

Lenders to 777 Partners accused it of fraud, claiming that the Miami-based investment firm borrowed against $US350 million ($530 million) of assets that it did not own, did not exist or were already promised to someone else. There has been plenty to unpack. My concern turns to structured settlement annuitants.

SuttonPark "has been late since January. Now 2 Weeks Late and Nobody Returns Calls"-Payee  

Today I received a call from a worried payee, a lady from Georgia who stated she sold only a portion of her Pacific Life structured settlement payments to Sempra Finance in 2019  [My readers may recall the name Sempra Finance as the structured settlement factoring company in the 4th deal in the Barber case, a disgraceful factoring exploitation of a Pennsylvania minor  (for background on Barber  see Structured Settlement Investors' Bad Hair Day in Barber Case as PA Superior Court Quashes Appeal - Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews (typepad.com) ,  case opinion---affirmed (1) 2021 and Download 2022-251-wal-2021 Barber case Sempra Finance petition to appeal denied)]

The payments from the June 2024 Georgia caller last week, were subject to a servicing agreement with SuttonPark, a substantial if not the largest servicer of structured settlement receivables. The payments were on time, or subtantially ontime, until January 2024 she relates. Now she reports that the portion of payments that she did not sell are two weeks late and nobody returns her calls regarding status of payments.

Late payments from the payment servicer and no communication from the payment servicer are not acceptable business practices.

Why Does Structured Settlement Servicing Exist?

• Servicing exists primarily due to unwillingness of some current and former structured settlement annuity issuers to split or dice structured settlement payments. Ostensibly the frictional transaction costs are passed on to the minority who choose to factor (some repetitively).
• Servicing is legal and very common in real estate loans for home mortgages. You take out a mortgage with one company (the originating company) and then you're notified a short time later that another bank is servicing the loan and directing you to make your mortgage payments to the servicer instead of the original lender.
• With structured settlement, servicing may be something forced by the structured settlement annuity issuer, OR it could be something driven by investors seeking privacy. A structured settlement factoring transaction involves a court proceeding. While the structured settlement factoring business is legal, the undeniable ick factor means that certain investors might not want the public or their other customers know that they are investing in structured settlement receivables.
• Some structured settlement factoring companies have both a servicer AND a back up servicer.
• Sometimes servicing is used increase operational efficiencies on a discontinued line of business. For an example, please see my recent article on the decision by Everlake Life (formerly Allstate Life Insurance Company)  Everlake Life Structured Settlements (4structures.com)

Can't You Just Call the Annuity Issuer When Payments Are Being Serviced?

When payments are being serviced following a partial structured settlement transfer, the structured settlement annuity issuer customer service channel is generally unavailable to the customer. If customers were to call the annuity issuer when payments are being serviced, they would likely be referred to the payment servicer. 

I have previously raised questions of how payment servicing affects an insurer's brand and maintain my longstanding concern where there are partial transfers. Structured settlement payments may stretch for years into the future. Interactions happen throughout the customer journey and give insurer brands an opportunity to connect with customers, understand their needs, and enhance the structured settlement customer's experience. 

Is a New Structured Settlement Payment Servicer in the Works to Replace SuttonPark?

According to one of my sources, a backup servicer is being arranged with DRB Capital purportedly in the mix. While one should stay tuned, I will raise again that questions were asked by me in an October 2009 podcast with Dallas bankruptcy attorney Bruce Akerly about what would happen if there was compromised servicer viability. Now here we are. What could the industry be doing better?

 

 

 

Can a Parent Sell A Minor Child's Structured Settlement to Buy an ATV for the Minor?

by John Darer CLU ChFC MSSC CeFT RSP CLTC

With birthdays and holidays, it's not uncommon for parents to want to do something special for their children.  But does that include selling a minor's structured settlement to buy an ATV recreational vehicle?   

So what happens if a 10 year old child appeals to the parent for something like an ATV and the parent would get it for them if they could afford it right now, can the parent and guardian reach out to a structured settlement buyer and sell the minor's structured settlement payments earmarked for college, for cash now, to buy an ATV? If they could, would the deal make financial sense?

Would a judge approve the sale of minor's structured settlement to buy an ATV for a minor?

Structured settlements are common in settlements involving minors and are preferable to blocked accounts or the court's registry.

Blocked accounts and the court's registry will earn little-to-no interest from the date of the settlement until the child reaches the age of majority.  Upon reaching the age of majority, the child has unrestricted access to the entire amount of the settlement, at a time when he or she might not be financially responsible enough to make smart decisions about a substantial amount of money. 

So what happens if a 9 1/2 year old child appeals to the parent for something like an ATV and the parent would get it for them if they could afford it right now, can the parent and guardian reach out to a structured settlement buyer and sell the minor's structured settlement payments earmarked for college, for cash now, to buy an ATV? If they could, would the deal make financial sense?

Settlement Agreements and Qualified Assignments Contain a Prohibition, Unless...

If you review any settlement agreement and release or qualified assignment agreement you will see a paragraph that looks something like this:

"Acceleration, Transfer of Payment Rights. None of the Periodic Payments and no rights to or interest in any of the Periodic Payments (all of the foregoing being hereinafter collectively referred to as “Payment Rights”) can be

i.  Accelerated, deferred, increased or decreased by any recipient of any of the Periodic Payments; or

ii. Sold, assigned, pledged, hypothecated or otherwise transferred or encumbered, either directly or indirectly, unless such sale, assignment, pledge, hypothecation or other transfer or encumbrance (any such transaction being hereinafter referred to as a “Transfer”) has been approved in advance in a “Qualified Order” as defined in Section 5891(b)(2) of the Code (a “Qualified Order”) and otherwise complies with applicable state law, including without limitation any applicable state structured settlement protection statute."

Why the Restrictions?

• Tax Reasons Setting aside the part of the paragraph that deals with Section 5891, the the foundation of this language is the tax law that supports the tax exemption afforded structured settlement payees who are receiving periodic payments as damages. 
• Protection   If someone wants to sell their structured settlement payments, the transaction must be approved by a state court judge, in compliance with the settlement protection act in the state where the payee resides.  It's not a perfect system but as the Barber case shows, one cannot always rely on structured settlement factoring companies (and sometimes parents) to be trustworthy.

Does It Make Sense?

1. Unlikely to be Approved by Judge It is highly unlikely that a judge would approve the sale of minor's structured settlement payment rights for pennies on the dollar to make a discretionary purchase such as an ATV for a minor.

Special needs may be considered, but only if there are no other sources available, such as insurance. Settlements involving minors must be approved by a court and can only be changed by court order, for good cause shown, and of course the petitioning party would have to convince the judge that any change is a necessity for the minor.

2. Selling a structured settlement, or part of it, to pay for an ATV for a minor makes no financial sense

Many states have laws about what types of ATV’s are approved for what ages.  For instance, in Kentucky, any operator under the age of 12 must have a helmet, parent supervision and cannot operate an ATV that has an engine size of 70 cubic centimeters (cc).  Harry Sheen addresses the subject in a 2019 article posted on Axle Addict says "When it comes to shopping for a brand new 70cc ATV, there are a lot of different models to consider from a range of different brands. ATVs this size are generally intended for kids around the ages of 6 to 10, but I would definitely recommend that you:

• check your four-wheeler manufacturer's recommended age guide)
• check for any local and state age limits for ATV riding.

Sheen says " considering your child's age and experience on a four-wheeler, you might want to get a 50cc four wheeler or even smaller for your kid".  

An ATV for child aged 10 or under, would set you back perhaps $2,500 with a helmet and all the gear.  If you have a structure with payments earmarked for college, you wouldn't want to touch that at all. Say your child has a lump sum at age 21 or 22,  the ATV would have a net cost of at least double that to net out the $2,500 after the costs and profits of the factoring company are taken into account.

Whatever you do, do not call structured settlement buyers for advice about your minor's structured settlement

If you engage any structured settlement buyers by email, phone, text or other form of communication,  you may be speaking with someone who is both unlicensed and unqualified to give advice. Furthermore, your child's information will go into their database, leaving your child open to abuse later. Stay safe. 

According to the 2018 Annual Report of ATV-Related Deaths and Injuries, published by the U.S. Consumer Product Safety Commission in February 2020, children under 12 made up 48% of child fatalities and 52 % of the injuries involving ATVs in 2018 and 44% of the fatalities over the 37 year period from January 1, 1982 to December 31, 2018.

 

 

 

NLRBFCU.Org Fraudsters Epic Fail Structured Settlements 101

by Structured Settlement Watchdog

NLRBFCU.org is a completely unreliable source of information about structured settlements 

NLRBFCU.org epic fail defines structured settlement purchasers/ brokers as

"they can arrange for a structured settlement annuity to be setup and therefore paid to the claimant who was injured. A judge or jury gives the settled amount out of court or the award to the defendant. These are also referred to as structured settlement companies or structured settlements brokers"

Why NLRBFCU.org Gets a flaming grade of F on its explanation of structured settlement purchasers/brokers

• A structured settlement purchaser does not set up a structured settlement.
• A structured settlement annuity is not "therefore paid to the claimant".  Sometimes payments are paid to a trust, such as a special needs trust or to a plaintiff or to plaintiff or claimant's distributees.
• A judge or jury does not give the settled amount to the defendant
• A judge or jury does not give an award to the defendant
• A judge or jury does not give a settled amount out of court to the defendant.
• A claimant is a term primarily used if a claim has been filed.  If a lawsuit has been filed the relevant term is "plaintiff".

 

Value Proposition of NLRBFCU.Org So Far

• Holds Itself Out As Recommended in Meta Tags Which Affect Search Results. It seems to be recommended by itself or a personal that does not exist.
• Holds Out a Person Who Appears to Not Exist as A Reviewer.  Credentials do not check out
• Changed its address from Washington DC to Savannah one week after the structured settlement watchdog exposed the fraud
• Changed the company name from one bogus insinuated affiliation to another after the structured settlement watchdog exposed the fraud.

Laura Bushnell Update

"Laura Bushnell" , who is held out  as Editor in Chief for NLRBFCU and based in Boston. NLRBFCU also states that "she held senior VP level positions in corporate finance and consumer financial planning firms. A seasoned, enthusiastic financial manager with over 20 years of experience in corporate finance, annuities, structured settlements, and financial planning".

• The fraudulent claim on NLRB FCU that the purported Laura Bushnell was a member of Charles River Rotary Club has been refuted by the Charles River Rotary Club.
• You would think there would be some trace of Laura Bushnell on the Internet with those purported credentials.  There is no LinkedIn profile. No articles. No other instance where any image with the name Laura Bushnell comes closes to the image held out as Laura Bushnell on the NLRBFCU website. 
• Oddly enough the only place where Laura Bushnell comes up is in a purported testimonial for an anonymously registered website called Themez  WP, which purportedly creates Wordpress themes. At time if publication, the Themez WP website displays Coming Soon on its Contact Us page yet has tons of  purported testimonials.  How is that possible?  How would anyone know who they were. How would any be able to leave a testimonial?