Business
Companies buy rights to L.A. County abuse-settlement payouts
Private funding companies are offering immediate cash to some survivors in exchange for the right to collect future installments from Los Angeles County’s $4-billion settlement.
More than 180 claimants nationwide have moved to sell their payout rights to roughly a dozen companies in recent months, a lead plaintiffs’ attorney told the Los Angeles Times. The offers arrive as some survivors face financial pressure and delays in receiving settlement money.
Settlement: $4 billion covering thousands of claims against Los Angeles County
Reported transactions: More than 180 claimants and about a dozen funding companies
California review: A judge must approve a transfer after finding it is in the claimant’s best interest
Cash now in exchange for future installments
The Times reviewed court filings showing that most participating claimants would receive a lump sum equal to about 80% of the payment rights they are selling. The report also found some proposed deals with steeper reductions, while one funding-company executive said his company’s discount rates range from 9% to 11%.
Claimants told the newspaper that payment delays, housing instability, medical bills and other immediate needs contributed to their decisions. Some also questioned how companies obtained their contact information because many underlying lawsuits were filed under pseudonyms.
L.A. County criticized the arrangements as another way third parties could reduce money intended for survivors. Funding-company representatives defended the transactions as a way to provide earlier access to cash. Court approval is required before settlement-payment rights can be transferred in California.