Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews

"NSSTA Has Softened Its View Of Factoring" -Patrick Hindert Report To SSP April 28 2009

According to our sources who attended, author and NSSTA legal committee member stated that "NSSTA has softened its view of factoring" during his presentation at the Society of Settlement Planners meeting in Washington DC yesterday.   I wonder what that means. I'll bet a whole slew of trial lawyers do as well.

Hindert's outrageous statement, in the same breath as reporting that factoring discount rates have increased from an average of 10% to an average of 20%, if proven true, would be both a credibility destroyer and potential self destruct button for the NSSTA.

The NSSTA established a Branding Commitee in June 2008 to examine ways to increase the structured settlement brand in a space dominated by the once bloated advertising budget of JG Wentworth and others and to counter blatant false advertising.

The settlement industry credibility on factoring is unfortunately, already on tenterhooks given that

 

1.  Patrick Hindert reported on October 26, 2008 in NASP Annual Meeting-3, that prominent settlement planners Michael Upchurch and Jack L. Meligan said that "the "bad" part of factoring results from non-professional ("cash now") advertisements promoted by many factoring companies.  Such advertisements (characterized as "Jerry Springer-type" commercials) are unprofessional and damage settlement planners' relationships with plaintiff attorneys and reduce structured settlement sales. Meligan and Upchurch allegedly said that not only do plaintiff attorneys dislike "cash now" advertisements, they are also less likely to recommend structured settlements if they believe their clients will eventually sell their payment rights. They recognize and disapprove of the temptations created by such advertising. Meligan and Upchurch both predicted continued negativity toward the secondary market from the primary market so long as factoring companies continue such advertising.

2. 95% of the industry not participating in a grass roots structured settlement transparency initiative. NSSTA disclaimed the initiative by memorandum to its membership

3. Little to no industry disclosure of factoring activities by industry members.

4. An industry member advertised that it was purchasing structured settlements in 2006. Download Forge Pay Per Click-Structured Annuity Buyer 9202006 and Download Forge Pay Per Click-Google-Structured Annuity Buyer 9212006 A principal of that firm is membership chairman of NSSTA.

5. The domain name of a factoring company was registered on the down low by an NSSTA member, until exposed by this blog.

6. NSSTA and a number of its members ostensibly attack the manufacturer of a viable structured settlement alternative, a product whose embodiment holds no need or ability to factor (and it's selling like hot cakes).

7. Rumors persist that a member of the industry has ownership interest in a factoring company.

 

Is there a cover up some where?  I'm not making this stuff up!

IRC 130 Qualified Assignment Blooper By Forge Consulting

It's time to correct yet another blooper by Forge Consulting, LLC, the firm that brought us "plantiffs",  "depending on the time of deferral, the sole benefit (of structuring attorney fees) is equivocated guaranteed interest rates  at approximately 15%",  the John Edwards "pay for testimonial" scandal, the "cover up", and the "ethical scoliosis" that it is perfectly OK to sign an affidavit under penalty of perjury that conflicts with your print and broadcast advertising.

On its website Forge Consulting claims that "Section 130 specifies the requirements to establish a qualified assignment":

• The company assumes the liability from the defendant, who then takes the case off of their books.
• An agreement must be made between the plaintiff and defendant that the payment schedule cannot be altered.
• The annuity may be excluded from the recipient's gross income.
• The injury must be physical in nature.
• A financially sound funding asset, which is usually an annuity, must fund the payments.

COMMENTARY:

Definition of to specify to name or state explicitly or in detail

First, IRC 130(a) states that any amount received for agreeing to a qualified assignment shall not be included in gross income to the extent that such amount does not exceed the aggregate cost of any qualified funding assets.

Then, in defining "qualified assignment" IRC 130(c) states:

The term ''qualified assignment'' means any assignment of a liability to make periodic payments as damages (whether by suit or agreement), or as compensation under any workmen's compensation act, on account of personal injury or sickness (in a case involving physical injury or physical sickness) -
(1) if the assignee assumes such liability from a person who is a party to the suit or agreement, or the workmen's compensation claim, and
(2) if -
(A) such periodic payments are fixed and determinable as to amount and time of payment,
(B) such periodic payments cannot be accelerated, deferred, increased, or decreased by the recipient of such payments,
(C) the assignee's obligation on account of the personal injuries or sickness is no greater than the obligation of the person who assigned the liability, and
(D) such periodic payments are excludable from the gross income of the recipient under paragraph (1) or (2) of section 104(a).

Forge Consulting is clearly mistaken with what is says is the specifics of Section 130

Among other things to correct from the Forge Consulting misrepresentation of the "specifics" of IRC 130:

1. 104(a) refers to personal physical injury OR physical sickness  IRC 104
   
2. Qualified assignments are a tool that is not limited to law suits. "whether by suit or agreement" means that qualified assignments may be sue to resolve cases that are not in suit, where there is no defendant but a respondent.
3. The annuity is not excluded from the recipient's gross income, the periodic payments are. IRC 130(c)(2)(D)
   

Don't you think it is essential to tort victims, trial lawyers and judges to be able to TRUST that those upon whom they rely for financial advice possess the ability to properly articulate the subject matter of their expertise?

Forge Consulting partner, Spooner Phillips, is the membership chairman of the National Structured Settlement Trade Association (NSSTA)

The Credibility of Trade Associations

It has come to the attention of this author that the individual entrusted with the membership of the National Structured Settlement Trade Association is an individual of "exemplary" stature,  IF one considers exemplary that H. H. Spooner Phillips IV, the person signing this declaration

Download spooner_phillips_doj_declaration_332005.pdf, under penalty of perjury, that one has performed substantial services to or on behalf of defendants in each of the preceding 3 years while simultaneously marketing as plaintiff exclusive as exemplary market conduct. In my opinion it is reaches the level of absolute disgrace that is only exceeded by the Society of Settlement Planners placing a kick back paying factoring broker in charge of its membership.

When one adds this revelation to the ongoing saga of NSSTA member and former Executive Director Patrick Hindert cavorting with the factoring pirates.

OR the ill-advised appointment of Diane Swenson as Executive DIrector of NSSTA in January 2008, and the immediate scramble to cover up such appointment after her tort reform history was made public by DealFlow Media through an NSSTA leak,

OR the letter from John Stanton, NSSTA Counsel to New York Supreme Court Judge Paul Victor in September 2006 containing an unsubstantiated comparison between the provider of an alternative solution and a convicted felon (which were subsequently used by NSSTA members (including the aforementioned NSSTA membership chairman's company, Forge Consulting) in competition with this provider) which could lead to litigation against NSSTA AND each of its members,

can one be helped from wondering which is NSSTA's preferred method of self preservation?

Any NSSTA member reading this who doesn't like what I have to say need only look in the mirror and ask themselves what have they done to stay aware of how their trade association's actions affect THEIR business, and what noise have THEY personally made in protest of these things?

Isn't your trade association supposed to help your business?

How long will the lullaby of Nero's fiddle continue to be heard?.

Previous Structured Settlements 4Real posts about the NSSTA membership chairman and the business practices of the company in which he is a partner

A Matter of Preference... Would You Rather Do Business With a False Advertiser OR a Perjurer?  July 31, 2007

Scraping Out The Truth in Chicago  July 13, 2007

Well I Declare! It's DOJ Ball...  March 5, 2007

Doubts Continue That Forge Consulting is Plaintiff Exclusive as Advertised

John T. Bair of Buffalo, New York and President of Forge Consulting,LLC, sent this letter Download forge_feb_21_2007_letterny_statejohn_bair.pdf  ("John Bair solicitation")to an attorney in New York City on February 21, 2007 as part of what is believed to be a mass mail campaign. In the "John Bair solicitation", John T. Bair states that Forge Consulting acts exclusively as a plaintiff's expert.  There are serious questions of fact as to whether that is a true statement in view of the following pieces of indisputable evidence, the originals of which are in the possession of the United States Department of Justice.

• Download 2005_bair_doj_50.24 Declaration.pdf
• Download 2006_bair_doj_50.24 Declaration.pdf
• Download charlie_schell_doj_declaration_312005.pdf
• Download spooner_phillips_doj_declaration_332005.pdf

Note that John T. Bair signed the 2006 Declaration in August 2006, a few short months ago. Forge Consulting and its principals use the now disputed claim that they are plaintiff exclusive as part of an effort to convince injury victims and their attorneys to work with Forge, so that Forge can earn commissions selling annuities, trusts and investment services. Furthermore, Forge Consulting has made the outrageous and untrue claims that it is the ONLY plaintiff exclusive company in the country.

The "John Bair solicitation" of February 21, 2007 highlights use, by John T. Bair and Forge Consulting,LLC, of the testimonial of former Senator and current Presidential candidate John Edwards although, it is believed that John Edwards is not currently practicing law, nor is he currently using Forge Consulting for structured settlements. According to Wikipedia, former Senator and current Presidential candidate John Edwards was a trial lawyer before becoming a Senator. John Edwards served as senator from January 6, 1999 through January 3, 2005. Thus, there is a serious question as to whether former Senator and current Presidential candidate John Edwards  EVER used Forge Consulting for structured settlements as Forge Consulting has only been in business since 2003. Further supporting source: New York Times on John Edwards March 28, 2007

Two things we do know is that (1) Forge Consulting is a fund raiser for former Senator and current Presidential candidate John Edwards and has hosted events at its Buffalo offices and (2) that Forge Consulting is using the "endorsement" of former Senator and current Presidential candidate John Edwards to sell annuities and other insurance products, investment products and trust services. Rules concerning the use of testimonials in the solicitation of financial products exist on the state and federal level.

The manner of use of the John Edwards "endorsement" in the February 21, 2007 "John Bair solicitation" appears improper in that it implies that John Edwards is a current customer and is using Forge Consulting for structured settlements. The Forge Consulting website contains many testimonials of New York based trial lawyers. If Forge Consulting is selling annuities and other insurance products, investment products and trust services, why is it not using an endorsement from a satisfied consumer that is, directly related to the services being provided? Hmmmmm