IFT's discount rates are unsupportable. Wentworth often buys at an 8% discount rate. IFT's SEC Form 10-Q says it has been buying at an average 18+% annual discount rate. This can't continue. IFT is one of the most expensive sources of money in the structured settlement industry. The outlook is negative in my opinion. How long will it be until naive sellers of structured settlements catch on?! FBR knew this upfront. Is this why there was a rush to take this company public?
The investment bankers know of the problems but looked the other way. I hope someone is looking at FBR who ignored the warnings.
Federal authorities raid Imperial Finance HQ in Boca Raton Date: Tuesday, September 27, 2011, 3:28pm EDT Related: Banking & Financial Services, Legal Services Click here to find out more! Related News
FHFA suit targets BofA: Who gets stuck with the tab? Gulfstream Business Bank gets $7.5M from small business fund Chase Bank building in Miami faces foreclosure Erratic stock market behavior goes back to the Depression era How Dow Jones history teaches skepticism
Brian Bandell Senior Reporter - South Florida Business Journal Email | LinkedIn | Twitter
Federal authorities raided the offices of Imperial Finance & Trading in Boca Raton on Tuesday.
The company, a subsidiary of Imperial Holdings (NYSE: IFT), had its headquarters, at 701 Park of Commerce Blvd., sealed with police tape. A man who briefly left the building said he worked for the U.S. Department of the Treasury.
A source who knows employees there told the Business Journal that the FBI raided the offices and employees were told to go home.
Shares of Imperial Holdings were down 20 cents to $6.30 on Tuesday afternoon, but market regulators halted trading at 1:42 p.m., pending the release of "material news."
A spokesman for Imperial did not return a call to his cellphone seeking comment. The company’s main phone line said its offices were closed.
Imperial Finance makes loans to life insurance policyholders based on the value of their policies. It is also in the structured settlement business, where plaintiffs pledge their legal settlements rights for cash up front.
Imperial Holdings raised $169 million in its IPO in February.
The largest shareholders of Imperial Holdings are JPMorgan Chase & Co. (NYSE: JPM), Wellington Management Co. and Discovery Capital Management.
Imperial Structured Settlements' Attempts to Thwart Competitive Bids for Future Annuity Payments Struck Down by Court
Boynton Beach, FL (PRWEB) June 30, 2011
A Harris County, Texas district court earlier this month struck down Imperial Structured Settlements' attempt to use the courts to prohibit RSL Funding from offering customers more money for their annuity payments. "Imperial's use of the court system to limit competition was recently rejected through a court imposed Summary Judgment on June 14, 2011 in the district court of Harris County, Texas (Cause No. 2010-49166)," states Stewart Feldman, speaking on behalf of The Structured Settlement Institute (SSI, http://www.structuredsettlementinstitute.org), a not-for-profit organization established to educate sellers of structured settlements regarding fair and equitable industry practices.
RSL Funding is recognized nationally for offering structured settlement recipients more money for their future settlement payments. RSL Funding is a direct competitor of Imperial's in the marketplace for the purchase of future payments. Imperial sought the court's assistance in preventing annuitants from receiving more lucrative offers from RSL Funding.
Companies like RSL Funding 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.
The Texas court upheld the annuity recipient's right to continue seeking competitive offers until an enforceable contract with the customer is in place. As a matter of law, no structured settlement company can bind a customer to a transfer agreement until an application for transfer of structured settlement payment rights has been approved by the courts and not until an order of transfer has been entered by a court. Until these contractual prerequisites are met, customers are welcome (and encouraged) to continue looking for offers that serve their best interests.
Imperial argued that its proposed transfer agreement that had not yet been approved by a court is an enforceable contract with its customer, so that any competitor offering more money to the customer is subject to a claim for "tortious interference with an existing contract," when in fact, Imperial has no legal right to prohibit competition. Courts have ruled against Imperial, striking down as unfair its sales tactics in favor of broader market competition.
In a recent securities filing, Imperial's parent, Imperial Holdings' reported that its average discount rate was 18.3% per year. According to Stewart Feldman, "Such an astonishingly high discount rate is unsustainable and is an aberration in the marketplace. It's no wonder why Imperial resorted to the courts to protect its untenable position."
According to Mr. Feldman of the Structured Settlement Institute, an educational organization, "As a result of the recent court ruling, customers are able to survey the marketplace to evaluate fair pricing for the sale of their future structured settlement payments." And as a result, RSL Funding will continue to make competitive offers to annuitants.
For further information, contact the Structured Settlement Institute (SSI) at (561) 880-0333, a not-for-profit organization established to educate sellers of structured settlements regarding fair and equitable industry practices.