- Lawsuit
financing
- Selling future structured settlement payments
- Arranging new commercial mortgages for
yourself or a client
- Helping my clients grow their
businesses.
- What funding do you have for
health care clients?
- Seller-financed
real estate notes
- Seller-financed business notes
Lawsuit financing
Sometimes additional resources are needed
to maximize the amount that can be obtained in a lawsuit.
·
As an example,
a plaintiff has had injuries and lost work time. Bills have piled up,
and his mortgage is in default. The insurance company knows that and
offers $100,000. The plaintiff’s attorney tells him that's
ridiculous and recommends refusing the offer because it's worth
$200,000. The plaintiff is desperate and takes the $100,000. We
can arrange for an advance to the plaintiff of a few thousand dollars to
clear up the default and provide living expenses. If necessary, we can
arrange for additional advances each month until the insurance company makes
a reasonable offer.
·
An attorney
may have an especially expensive case that is expected to produce a big
payoff. Class action and intellectual property cases are
typical. The attorney can receive funds for expenses, such as expert
witnesses.
These advances require a very strong case
because the advance is non-recourse. If the plaintiff doesn’t
collect, neither does the funder. Due to the high risk, the advance is
very expensive compared with bank rates. The plaintiff and attorney
should view the cost as an investment. In the first bulleted paragraph,
how much would it be worth paying to get the additional $100,000? In an
intellectual property case worth millions, how much is it worth paying to be
able to carry on the suit? It's an investment with no risk to the
plaintiff and/or attorney.
In addition, an attorney who needs financing to improve a personal injury
practice can get an advance. The
attorney will have to have some caseload already, since the cases will secure
the repayment of the advance.
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Selling future
structured settlement payments
A former plaintiff may be receiving future
payments as the result of a settlement in an earlier suit. Payments can
be monthly, annual, or even every few years. No matter how carefully
the settlement was planned, the annuitant (seller) may now have unforeseen
circumstances which necessitate selling those payments.
Most states allow sales of structured
settlement payments. The most important feature is that a court order
is obtained. The order guarantees that the payments will be made to the
investor (or buyer) who buys the payments. It also meets the legal
requirements to make the sale tax-neutral, i.e., the proceeds for
payments which were not taxable are not taxable. All legitimate buyers
of payments know how to arrange the court orders and can either work with the
seller’s attorney or hire their own to get it done.
Normally, the payment seller will have no
out of pocket payments before the court order is complete and will be paid
within days after the court order is received. Most
investor/buyers cover all the costs. Whether the seller is dealing with
a broker or directly with a buyer, the offer received will be a bottom line
amount after all expenses have been deducted.
Be a little suspicious of any buyer who requires any out of pocket,
including the costs of the court order, and ask extra questions.
You can find hundreds of brokers and maybe
5-10 actual buyers on the internet. How do you choose? You can
try to find an investor, but investors have expenses they normally leave to
brokers. The result is that they usually have a wholesale price for
brokers and a retail price for you. Sellers have called KG Funding after getting a quote from
a buyer they saw on TV. We always have gotten them a better price,
often from the same source! Experience is important. KG Funding
knows all the buyers and always gets the best price and service for the
seller.
How experienced is Mike Schaul of KG Funding? Unfortunately, our
home state, North
Carolina,
has a law that makes selling payments more difficult than most states.
Mike fought the law when it was passed in 1999 and wrote the definitive
article about it in the Campbell Law Observer. In 2006, Mike is
still the leader in working to bring NC’s law in line with the rest of
the country, starting with another article (2005) in the Campbell Law
Observer that alerted NC attorneys of the status. To judge his
expertise, read Mike’s articles. KG Funding continues to arrange
structured settlement purchases in NC and other states.
Information
needed to make you an offer: We need the exact dates and amounts of the payments, the
name of the company making the payments and whether the payments are
guaranteed if the annuitant dies. Tell us whether the annuitant has
another source of income. Because sometimes it is advantageous to you
or required by the purchaser, we might only buy part of the payment stream.
Let us know if a specific amount is needed for a specific purpose. If the
person receiving the payments is a minor, most purchasers will be reluctant to
get involved.
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