Re-cycled Structured Settlement Payment Rights

In 2013, both the SEC and FINRA issued warnings to individuals about the risks of buying and/or selling “re-cycled” structured settlement payment rights.

Against the backdrop of an increasing number of cases seeking to void transfer orders, a recent case (Wall v. Carona Capital) serves as a warning (i.e., not only to downstream buyers of recycled structured settlement payment rights, but also to those who may consider using such rights to fund a structured settlement) that, yes, there are certain hard-to-assess risks baked into the secondary market.

Release 65 of "Structured Settlements and Periodic Payment Judgments" (S2P2J) summarizes this case which highlights some, but not all, of the potential problems and risks potentially involved with these types of cases.

The book devotes a section to the dangers of “re-cycling” structured settlement payment rights after they have been “factored” as well as an entire chapter addressing “transfers of structured settlement payment rights.