Structured Settlement Institute: Texas Courts Again Reject Imperial Finance's Anti-Competitive Acts
BOCA RATON, Fla., May 10, 2012 /PRNewswire-USNewswire/ -- Texas courts (1) have once again ruled against Imperial Finance's continued attempts to stifle competition. A Texas court last month rejected for the fifth time Imperial's anti-consumer attempts to prohibit customers from selling their structured settlements to persons other than Imperial. Imperial sought to prohibit its customers from receiving competitive bids, requiring them to accept offers from Imperial only. Imperial Holdings, Inc. (NYSE: IFT), the publicly-traded parent company of structured settlement factoring firm, Imperial Finance and Trading, has been unsuccessfully urging the courts since 2010 that once it signs up a customer, Imperial was protected from competitors making counter offers, claiming some form of exclusivity. Imperial used this argument to support its continued overcharging consumers, despite being cited by courts for charges which were not "fair and reasonable." (2)
In an unprecedented fifth request asking Texas courts to support its position, a Texas trial court last month again rejected Imperial's arguments, telling its lawyers that the court's position was unchanged and that anyone could bid for the purchase of structured settlement payments, all despite the protests of Imperial. The arguments of L. Bradley Hancock of Greenberg Traurig's Houston office, legal counsel for Imperial, were again rejected. Greenberg Traurig, which itself is not free of controversy having seen several of its partners indicted in the past over billing issues and having paid multi-million dollar fines, (3) and L. Bradley Hancock have been making similar allegations in other courts (4), so far without success.
Texas courts have continued to uphold the annuity recipient's right to continue seeking competitive offers. According to Stewart Feldman, a member of the Structured Settlement Institute and CEO of competitor RSL Funding, LLC: "Imperial has been claiming that it has an enforceable contract when in fact it does not. The allegations of Imperial's deceiving customers carry through to multiple lines of business of Imperial. Imperial has long used this threat to underpay sellers of structured settlements for their future payments."
Industry competitor Imperial's woes are seen in its other business units. As of mid-April 2012 Imperial's stock price has fallen 82%, earning it the distinction of being the 2nd worst performing IPO of 2011 (5). A 2011 state and federal inquiry into its business practices lead to the recent termination of employment of one of its founders and now board member, Jonathan Neuman, who served as president and COO (6). As part of the non-prosecution agreement, Imperial acknowledged misrepresentations related to its financing life insurance and agreed to pay an $8 million penalty and exit the premium finance business, according to published reports (7).
"For the fifth time, Texas courts again this month confirmed that Imperial's competitors can vie for sellers of annuities and provide competitive offers that are clearly in the customers' best interest," commented Paul McHugh, Vice President of Sales and Marketing for RSL Funding. "RSL Funding will continue to actively pursue owners of structured settlement payments to make competitive offers, leaving the customers and the courts to ultimately decide whether it is in the payees' best interest to receive more money than less," says McHugh.
The ruling by the Texas court on April 2, 2012 comes on the heels of a Texas appellate court ruling (8) striking down a similar attempt by another industry competitor, Peachtree Settlement Funding, LLC, to thwart competition in the secondary market for structured settlements. Peachtree is an affiliate of industry participant JG Wentworth, itself a unit of JLL Partners. Together JG Wentworth, Peachtree and Imperial control about 70% of the U.S. secondary market for structured settlements.
Repeated inquiries to counsel for Imperial, such being L. Bradley Hancock of Greenberg Traurig's Houston office resulted in either no comment or a request that this information not be brought to light.
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) Case No. 2010-49166, 55th Judicial District Court, Harris County, TX.
(2) See In the Matter of the Petition of Imperial Structured Settlements, Petitioner, SUPREME COURT OF NEW YORK, QUEENS COUNTY, 2009 NY Slip Op 51625U; 24 Misc. 3d 1226A; 899 N.Y.S.2d 60; 2009 N.Y. Misc. LEXIS 1981, July 23, 2009.
(3) See http://www.law.com/jsp/article.jsp?id=1173101898582&slreturn=1 ; http://www.abajournal.com/news/article/greenberg_traurig_indicted_in_guam ; http://en.wikipedia.org/wiki/Greenberg_Traurig_LLP_and_Greenberg_Traurig_PA .
(4) See Settlement Funding LLC dba Peachtree Settlement Funding vs. Rapid Settlements, Ltd.; in the 113th Judicial District Court of Harris County, Tx.
(5) See http://www.cnbc.com/id/45729156/The_Best_and_Worst_Performing_IPOs_of_2011
(6) See Wall Street Journal, April 30, 2012. http://online.wsj.com/article/SB20001424052702304868004577376300558555854.html?ru=yahoo?mod=yahoo_itp
(8) Rapid Settlements, Ltd. v. Settlement Funding, LLC, 358 S.W.3d 777 (Tex. App. Houston 14th Dist. 2012)
Structured Settlement Institute
Boynton Beach, FL
1-800-409-1975
[email protected]
SOURCE Structured Settlement Institute
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