by Structured Settlement Watchdog®
Given that settlement purchasers descend on structured settlement recipients who’ve filed transfer petitions at courthouses faster than a swarm of carrion flies on a corpse, why would anyone who has entered into a structured settlement factoring deal—or filed the paperwork for one, complete with an affidavit swearing it’s in their best interest—need to hear an explanation of what a structured settlement is from a pirate?
The Novation Settlement Solutions ad features the image of three “jolly rogers” suspended from a sail over the water, call it “Parrot Sailing”.
Novation Settlement Solutions tweets “Need answers about your #StructuredSettlement?”
Then asks the question ” What is a structured settlement and how does it work?
Arrrgggh! “Hooked” by a first class non-sequitur if I might say so.
We can call go to school on the lessons that the Cedric Martez Thomas case taught us about Novation Settlement Solutions
Novation Funding LLC, in whatever life form it takes, be it Novation Settlement Solutions, or 365 Advance Services has a recent history of giving a wildly noncompetitive lump sum to a young, naive structured settlement annuitant. I can’t see how Novation did right by Mr. Thomas.
The 2015 day that Cedric Martez Thomas’ lopsided structured settlement transfer was approved in Okeechobee County is a day that will go down in Okeechobee County and National Association of Settlement Purchasers infamy
At the time of publication, Novation Funding is a member of the National Association of Settlement Purchasers, an association which attempted to sweep the “blacksploitation” hubbub about Access Funding under the rug in a wistful refrain of “it’s not us it’s them”, to divert stories of harm that a number of its members are causing consumers by their business practices.
How Badly was Cedric Martez Thomas Hosed by Novation?
Those with structured settlements and lawyers for injury victims should never forget Cedric Martez Thomas! He did business with Novation Funding (D/B/A 365 Advance Services) and most of his structured settlement payments were set adrift. Cedric Martez Thomas got approximately $1,037,000 for $6.6M in future structured settlement payments that began immediately. He could have done more than double better or he could have received the same amount and kept a significant flow of income tax free structured settlement payments. According to public records Cedric Martez Thomas invested the proceeds into 2 homes and a condo
11/20/2015 $270,000 West Palm Beach, FL condo that was foreclosed in 12/12 for $65,100; bank sold for $101,101 in 2013 and then sold to Thomas for a 168,000 plus profit in November
02/19/2016 $165,000 West Palm Beach, FL (property another buyer had bought 3 days earlier and flipped to Thomas for a $30,000 profit)
3/12/2016 $210,000 Boynton Beach Florida 4BR 4BA
Total invested $645,000 in South Florida Real Estate (not including closing costs and legal fees)
This is the lousy dealthat Cedric Martez Thomas got from Novation Funding, approved by Judge Gary Sweet, according to Okeechobee county court records obtained last October:
Structured settlement payment rights sold:
- monthly payments of $2,500.00 each, commencing January 22, 2016 through and including October 22, 2016; and
- monthly payments of $11,689.57 each, commencing November 22, 2016 through and including October 22, 2046, increasing 3% annually each November;
TOTAL PAYMENTS SOLD $6,678,633.83, for $1,037,000
According to court documents obtained by the Structured Settlement Watchdog on October 30, 2015,
the deal bore a 15.24% effective discount when the deal could have been purchased for a discount rate of more than half that and put in excess of a million dollars more in the AIG annuitant’s pocket (one settlement purchaser told us that they would have paid Cedric Martez Thomas about $2.5MM!), OR given him the same amount of cash to invest and still kept a substantial TAX FREE income stream.
The reality will surely set in for Cedric Martez Thomas in November 2016 (just a year away from the disastrous sale) when he COULD HAVE begun to receive substantial income from his structrued settlement of $140,274.84 (12 times $11,689.57), like a tax-free “job he could never be fired from”, even if he just sat on his ass and watched TV, that had a guaranteed built-in raise of 3%!.
That’s like earning almost $200,000 in a taxable job in a 28% tax bracket. Not too shabby, eh?. On an after tax basis, In 5 Years Thomas would have made the money he invested in the 3 properties; in 7 years he would have made the entire amount he got from Novation Funding for giving up $6,678,633. As the Robert Plant and Led Zeppelin refrain* goes, “It really makes me wonder“.
The lyrics that follow say “And it’s whispered that soon, if we all call the tune, Then the piper will lead us to reason”. WILL IT?
Novation’s Thomas deal also begs the question of whether Okeechobee County was becoming the new Sumter County, a new squeaky wheel among Florida courthouses
- Industry sources seem to support that. Since the Cedric Martez Thomas deal was approved in October 2015 by Okeechobee County Judge Gary Sweet, Florida amended its structured settlement protection act.
- The law now requires the annuitant to appear in person at the transfer hearing in their home jurisdiction. The question is who will do the math?
Why Cedric Martez Thomas’ Story Needed to be Told
The following was published in April 2024. It had to be said.
Read How Judge’s Structured Settlement Transfer Decision Ignited Financial Failure in 7 Years – Structured Settlements 4Real® Blog: Structured Settlements | Settlement Planning News and John Darer Reviews
* from Stairway to Heaven
Last updated May 18, 2024