On Eve of Sale, J.G. Wentworth Embroiled in Multiple Lawsuits, says the Structured Settlement Institute

New Owner Faces Hundreds Of Millions In Claims

BOCA RATON, Fla., Nov. 8, 2012 /PRNewswire-USNewswire/ -- J.G. Wentworth, the financial services company and buyer of structured settlements, has been shopping itself for upwards of a $1 billion price tag – surprising given that the company is entangled in several lawsuits in a mature industry.  The seller, an affiliate of private equity firm JLL Partners, apparently hopes that buyers overlook the pending federal lawsuits, which could lead to large scale customer refunds, IRS excise tax claims, and injunctions against Wentworth affecting its future business, reports the Structured Settlement Institute. 

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"Those most familiar with the industry aren't asking why the company is being sold," comments Paul McHugh, Marketing Director of RSL Funding, LLC, a national purchaser of annuity benefits in the secondary market and member of the Structured Settlement Institute.  "The reasons are clear:  the sale is driven by the fact that J.G. Wentworth faces an increasingly difficult business climate as rates have fallen, coupled with legal setbacks resulting from its aggressive business practices."

J.G. Wentworth was sued earlier this year, accused of engaging in deceptive trade practices.(1) It is now mired in yet another federal court suit relating to deceptive business practices which resulted in underpaying its customers.(2) The lawsuits allege that J.G. Wentworth and its sister company Settlement Funding, LLC, d/b/a Peachtree Settlement Funding (Peachtree) illegally encumber the customers' structured settlement payment rights by preventing clients from selling their structured settlements to anyone other than Wentworth/Peachtree.  Additionally, the lawsuits allege that Peachtree and J.G. Wentworth deceive consumers into believing these companies are competing with one another, when in fact they share offices, personnel, call systems, and call data which they use to support artificially inflated rates imposed on consumers. Together, Peachtree and J.G. Wentworth control about 65% - 70% of the market. 

Peachtree and Wentworth have argued to courts that the first company to sign an otherwise non-binding proposed transfer agreement has the exclusive right to negotiate with a customer.  In response to such arguments, Texas courts have upheld the right for industry maverick RSL Funding, LLC and other competitors to offer clients of Wentworth and related companies more money for their future payments.(3)  

Even more recently, on November 2, 2012, a Harris County (Houston) Texas district court(4) overruled Wentworth's attempt to block a single mother's effort to sell her structured settlement to a company other than Wentworth. "The Texas court rejected Wentworth's attempt to manipulate the structured settlement protection act, despite its ongoing arguments to the court," comments L. Andy Paredes, counsel for the successful purchaser.  "In my opinion, Wentworth's attempt to force a person only to sell to it is a violation of the protection act. It is also an anti-competitive and anti-consumer position because Wentworth attempts to stop a consumer from comparing offers from Wentworth's competitors."

JLL Partners' controlled companies have recently experienced a series of setbacks in the courts resulting from their continued anti-consumer practices.  "These companies employ a variety of techniques to undermine the spirit and the law of the state structured settlement protection acts," says Stewart Feldman, an attorney familiar with the structured settlements industry. 

Repeated inquiry to counsel for JG Wentworth and Peachtree, L. Bradley Hancock, a partner in Greenberg Traurig's Houston office, resulted in a demand that this information not be publicly disclosed.

For further information, contact the Structured Settlement Institute (SSI), a not-for-profit organization established to educate sellers of structured settlements regarding fair and equitable practices among providers of structured settlement transfers.                  

(1) Civil Action No. 12-CV-2044, United States District Court, Southern District of Texas, Houston Division
(2) Civil Action No. 12-CV- 1872, United States District Court, Southern District of Texas, Houston Division
(3) Cause No. 2009-78934, in the 334th Judicial District Court, Harris County, TX
(4) Cause No. 2012-18154 in the 152^nd Judicial District Court, Harris County, TX.

MEDIA CONTACT:
Structured Settlement Institute
Boca Raton, FL
1-800-409-1975

SOURCE Structured Settlement Institute

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