Opinion
No. 104958/2011.
08-28-2014
In the Matter of the Petition of STONE STREET CAPITAL, LLC for Judicial Approval of Transfer of Structured Settlement Payment Rights In Accordance with Article 5, Title 17 of New York General Obligations Law, Petitioner, v. Gregory HOLT, American Home Assurance Company and American International Life Assurance Company of N.Y. n/k/a United States Life Insurance Company in the City of New York, Respondents/Interested Persons Pursuant to GOL § 5–1701 et seq.
Opinion
Gregory Holt seeks the transfer of certain structured payments due to him under a structured settlement agreement in accordance with 26 U.S.C. 5891 et seq. and GOL § 5–1701 et seq. Under the terms of the structured settlement, Mr. Holt seeks to sell: 52 guaranteed monthly payments of $375.00 from January 1, 2016 through and including April 1, 2020; one lump sum of $5,000.00 due and payable on April 1, 2015; and one lump sum payment of $5,793.00 due and payable on April 1, 2020. The aggregate of those payments is $30,293.00, and in his petition Mr. Holt seeks to transfer the payments for the purchase of $12,586.00. That purchase price has since been increased to $16,371.00 as discussed in further detail below.
Mr. Holt previously sold a portion of his structured settlement payments to Stone Street Capital, LLC. In exchange for a lump sum payment of $20,000.00, Mr. Holt transferred his right to 180 monthly payments of $375.00 due and payable November 1, 2010 through and including October 1, 2015 as well as one lump sum payment of $5,000.00 due and payable on April 1, 2005.
Mr. Holt has already received $10,686.00 from this transaction, because his application was mistakenly believed to have been prepared and filed with the court, but in fact was not. Indeed, the law firm that previously represented Stone Street, Paris & Chaikin, PLLC, tendered a short form order to Stone Street dated August 16, 2011 under Index Number 104958/2011 and bearing the signature of Judge Jane Solomon approving the transfer. That order, in turn, was served on American Home Assurance Company and American International Life Assurance Company of New York, the annuity issuer. Based on that order, which was later determined have been fabricated by a “rogue” paralegal in Paris & Chaikin's office, petitioner made the lump sum payment of $10,686.00 to Mr. Holt.
The $10,686.00 figure that Mr. Holt received accounts for the purchase price of $12,586.00 minus commissions, fees, and other expenses totaling $1,900.00. Those fees have been waived (see Updated Disclosure E-mail dated August 5, 2014).
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Accordingly, this Decision, Order and Judgment supersedes any prior Decisions, Orders and Judgments made with respect to the transaction at issue, including the purported Order of Judge Jane Solomon, dated August 16, 2011.
As amended by an updated disclosure e-mail dated August 25, 2014, the new purchase price for this transaction is $16,371.00 ($10,686.00 of which Mr. Holt has already received). As such, the net amount that Mr. Holt will receive in exchange for his future structured settlement payments represents 61.27% of the estimated current value of the payments based upon the discounted present value of $26,718.88 using the applicable federal rate of 1.80%. (See Updated Disclosure E-mail dated August 5, 2014). Originally, the transaction was the equivalent of interest payments to petitioner of 13.79% annually, but has since been amended to the equivalent of interest payments to petitioner of 9.00% annually. Id.
Mr. Holt's affidavit reflects the following: He is 56 years old, resides in New York City, and is presently unemployed. Mr. Holt's sole source of income is approximately $800.00 in unemployment benefits that he receives monthly. Mr. Holt intends to use the money that he receives from the transfer of his structured settlement payments to pay-off outstanding bills and to pay for basic living expenses not covered by his current income.
The court met with Stone Street's counsel and Mr. Holt on the scheduled return date for the Order to Show Cause, April 16, 2014. On that date, Mr. Holt expressed that he currently pays $160.00 a month in rent. Mr. Holt also expounded on his desire to pay-off his outstanding debts and reiterated to the court that his present unemployment benefits are not enough to cover the cost of past-due electricity bills, rent, and his other monthly living expenses. Mr. Holt also stated that he does not have any other assets or credit resources to achieve his desire of being debt-free without this transfer.
The court finds that the transaction herein is both fair and reasonable and in the best interest of Mr. Holt. The additional $5,685.00 that Mr. Holt will receive ($16,371.00 offset by the $10,686.00 that he has already received) represents 61.27% of the estimated current value of the payments. The annual discount rate of 9.00% is also fair and reasonable, and is in Mr. Holt's best interest. Indeed, when Mr. Holt initially sought approval for this transaction, the, the annual discount rate was 13.79%. Here, however, given the much more favorable rate of 9.00%, it would not be in Mr. Holt's best interest for the court to disapprove this transaction, especially when Mr. Holt has already received $10,686.00 and might be required to return that amount or have it offset against future payments.
It is hereby
ADJUDGED that the petition is granted; and an Order is signed simultaneously herewith.