Industry sources have informed S2KM that a New York law firm has falsified court orders approving structured settlement transfers in as many as 100 cases - and possibly more.
Some, if not most, of these cases apparently involve J.G. Wentworth (JGW) whose parent company JGWPT Holdings Inc. (JGWPT) completed its initial public offering of common stock November 8, 2013 with a decreased number of shares and a lower price range than originally expected.
As a result of its public offering, JGWPT raised $136.5 million, selling 9.75 million Class A shares for $14 each, according to a company statement. JGWPT is now listed on the New York Stock Exchange under the symbol JGW.
JGWPT's amended S-1 statement, filed October 28, 2013 in anticipation of its public offering, includes the following statements under a section titled "RISKS RELATED TO OUR BUSINESS OPERATIONS":
"We depend on a number of third parties for the successful and timely implementation of our business strategy and the failure of any of those parties to meet certain deadlines could adversely impact our ability to generate revenue.
"Our ability to purchase structured settlement payments and lottery receivables depends on the entry of related court orders. Our ability to complete a securitization and operate our business depends on a number of third parties, including rating agencies, notaries, outside counsel, insurance companies, investment banks, the court system, servicers, sub-servicers, collateral custodians and entities that participate in the capital markets to buy the related debt. We do not control these third parties and a failure to perform according to our requirements or acts of fraud by such parties could materially impact our business. For example, there have in the past and may be in the future deficiencies in court orders obtained on our behalf by third parties that result in those court orders being invalid, including as a result of failures to perform according to our requirements and acts of fraud, in which case we would need to take additional steps to attempt to cure the deficiencies. We may or may not be successful in curing these deficiencies and, if successful, there may nonetheless be a delay in our receipt of payment streams pursuant to the court orders and if unsuccessful, we may have to repurchase such payment streams from our securitization facilities. Any delay in the receipt of, or the invalidation of, a significant number of court orders or any delay in the closing of a securitization would significantly and adversely affect our earnings." (Emphasis added).
This falsification of New York transfer orders raises a number of questions:
- Who was responsible?
- Why did they falsify the orders?
- How many cases are involved?
- What will be the consequences?
- Will the Internal Revenue Service impose IRC 5891 excise taxes?
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