The Houston Business Journal has reported that Texas appeals court has dissolved and reversed a temporary injunction against the RSL Funding LLC which had prevented it from competing for Peachtree Settlement Funding’s U.S. clients.
Peachtree, now JGWPT, aka J.G. Wentworth, had accused the Houston structured settlement factoring company of offering its customers more money for their annuities. RSL admitted they did offer their clients more money therefore the trial judge sided with Peachtree thereby preventing RSL from competing in the secondary marketplace.
The decision was reversed by a Texas appellate court because the ruling was “an unreasonable restraint on trade.” This reversal should help other factoring companies when they compete against industry giant J.G. Wentworth/Peachtree in the future.
While RSL may have won this court case, they still have other pending legal issues. Last week MN District Judge, Robert Blaeser ordered the company to comply with an investigation by the state attorney general’s office into their business practices. Blaeser ruled that RSL has 15 days to respond to the attorney general’s demand for information.
Peachtree Financial merged with J.G. Wentworth in July and had lain off 90% of its Boynton Beach, Florida location. The remaining 10 percent were offered positions at J.G. Wentworth’s Radnor, PA based corporate headquarters.
Hennepin County, MN—A District Judge, Robert Blaeser, has ordered RSL Funding, LLC to comply with an investigation by the state attorney general’s office into their business practices. Blaeser ruled that RSL has 15 days to respond to the attorney general’s demand for information.
The state's attorney general is investigation whether RSL Funding violated Minnesota's Structured Settlement Protection Act requiring court approval on all transfers of structured settlement annuity payments. The investigation involves Tasheeka Griffith, 21 who sold most of her annuity for a fraction of its future value.
The office has accused RSL of not cooperating with its inquiry because they did not responded to 3 separate requests for the identity of its Minnesota customers and the names of the companies it uses for marketing in the state.
A structured settlement is a financial arrangement that allows court-awarded compensation to be paid in regular installments rather than in one lump sum. Typically these payments provide money for a fixed period or lifetime. They may also include some money upfront.
Once a settlement has been reached the only way to alter it is to sell some of the future payments on the secondary market to factoring companies at a discount. Discounting is the process of reversing the value of the future payments back to the present value of the money today. The result is you will have a lump sum of cash at its present value.
In order to protect the rights of the annuitant in these cases, forty-six states and the federal government have enacted additional consumer protection statutes that establish strict conditions for these transactions.
Under the federal law, court oversight and approval is required for individuals who chose to sell payments from a structured settlement to a third-party company. The details of the statues vary by state but the courts approval is necessary to protect the annuitant and to ensure that the annuitant is receiving a fair amount for their payments.