Following is an interview with Patrick J. Hindert upon his appointment as executive director of the Society of Settlement Planners. Hindert is co-author of the leading textbook, Structured Settlements and Periodic Payment Judgments, published by American Lawyer Media, which is required reading to be certified by the National Structured Settlements Trade Association (NSSTA). An attorney by profession, he served as a consultant to the National Conference of Commissioners on Uniform State Laws (NCCUSL), which adopted the Model Periodic Payment of Judgments Act of 1980 and the Uniform Periodic Payment of Judgments Act of 1990, the latter being adopted by the American Bar Association. He was also the only person to testify before a congressional committee when structured settlements were first codified in the Periodic Payment Settlement Tax Act of 1982 (Pub. L. 97-473). He has served as NSSTA president and owned a successful structured settlement brokerage, which he sold to be merged into another company.

Q. Why did you, Patrick J. Hindert, accept the position with SSP?

A. SSP represents the future of the structured settlement industry. As executive director, I am honored and challenged by the opportunity to assist SSP and SSP members to improve and grow the structured settlement industry.

Q. You came from a staunch defense background, as owner of a structured settlement brokerage. What made you decide that the plaintiff should have the rights to select the funding asset provider and the person to handle the transaction?

A. From 1977 until 1999, I had the privilege of representing and working with many outstanding defendants including government agencies, insurers, reinsurers and defense attorneys in the United States, Australia, England and Canada. In many important respects, defendants developed the structured settlement industry. As United States insurers now become financial and insurance holding companies, they all have a potential role to play in the future of the structured settlement industry.

Since 1999, I have had the opportunity to study, write and think about recent significant legal and business developments relating to structured settlements. In my opinion, these developments require and permit all participants to rethink the most fundamental structured settlement issues. These issues include rights, duties and responsibilities as well as documentation and business practices. Working with SSP encourages and permits me to study and write about the new rules of structured settlements from the perspective of personal injury claimants and their families.

Q. What are the most important events affecting structured settlements to occur over recent years? Legislation? Litigation? Product development?

A. Many recent significant events have occurred. Legislatively, in the U.S., the Financial Services Modernization Act, the Victims of Terrorism Tax Relief Act, and the state Structured Settlement Protection Acts are all important. Australia's new federal structured settlement tax legislation continues the international development of structured settlements.

Concerning case law, the James Gibson case provides a sad example of problems that still exist with structured settlements and highlights the need for improved structured settlement regulation and education. (Editor's note: James R. Gibson, of East St. Louis, Ill., formed a trust to take assignment of periodic payment obligations using U.S. Treasury bonds as the qualified funding asset, which is permitted under IRC § 130(d). However, he misappropriated the assets of the assignment company for other business ventures. Gibson was convicted of conspiracy to commit mail and wire fraud and is incarcerated. Most structures are funded by annuities and held by an affiliate of the issuing life insurance company.)

The developing laws of privacy and unfair claim practices will have an important impact on the U.S. structured settlement industry.

Although the Internet has had a limited impact to date on the structured settlement industry, that situation will change. The Internet will change structured settlement business processes significantly and introduce a host of new structured settlement products including knowledge products. SSP is committed to understanding the Internet and its applications to SSP members and the structured settlement industry in general.

Q. What effect does IRC § 5891 have on structured settlements?

A. IRC § 5891 (enacted as part of the Victims of Terrorism Tax Relief Act) has a fundamental impact on structured settlements in the United States. IRC § 5891:

Defines "structured settlement" for the first time in the federal Internal Revenue Code, and provides other definitions relating to structured settlement and factoring transactions.

Confirms favorable tax treatment for the originating structured settlement participants in the event of factoring transaction provided Internal Revenue Code requirements are met.

Defines and legalizes structured settlement financing transactions.

Defines a state-run system for approving factoring transactions.

Q. What activity do you see the SSP engaging in to advocate plaintiffs' rights?

A. SSP will work with all parties within the structured settlement industry:

To understand and comply with the federal and state laws impacting structured settlements.

To develop business standards, practices and documentation consistent with those laws

Tto identify and enact any new or revised laws needed to improve performance within the structured settlement industry.

Q. Do you see the concept of structured settlement brokerage changing? New products? Etc.?

A. The Internet will change the concept of structured settlement brokerage, including: the products and services to be brokered; the brokerage location; how the products and services are packaged and distributed; who purchases and sells the products and services and to whom; and how brokerage compensation is determined. Structured settlement knowledge products and tools will become much more important on the Internet.

Q. What is the difference in approach between a structure being handled by someone invited by the defense and a by settlement planner engaged by the claimant?

A. From the perspective of a structured settlement broker, the most significant differences include:

Conflict of Interest - A broker owes his loyalty and primary professional duty to his principal or client. Whenever a conflict exists between a defendant and a claimant, the conflict also exists for the structured settlement broker.

Rights and Duties - In a specific structured settlement, a broker's rights, duties and responsibilities depend upon the rights, duties and responsibilities of his principal or client. Structured settlement rights and duties are different for defendants and claimants.

Trust and Access - A principal or client will generally have more trust and provide greater information and access to his/her own broker than to the adversary's broker.

Q. Expand on what is meant in the SSP mission statement by elevating "the profession of settlement planning through education, certification, and knowledge transfer among its members and to assist personal injury victims through providing information to them, their attorneys and advisors, judges, product providers and others."

A. As structured settlements become more complex and more important, the need for improved knowledge management among industry participants also increases. Using Internet and related technologies to identify, capture and share critical knowledge and information among structured settlement participants is the key to improving performance within the structured settlement industry.

Written by: Richard B. Risk, JD, CSSC is the owner of StructuredSettlements.org

WASHINGTON, DC, December 20, 2004 � The IRS and Treasury issued regulatory guidance for Section 409A exccluding structured attorneys fees from Section 409A, making it favorable to structuring attorney fees.

Under this Treasury/IRS guidance, the new section 409A, deferred compensation rules will not apply to arrangements between an attorney and his or her client, where the attorney is actively engaged in the practice of law and provides legal services during the year to two or more clients who are unrelated to the attorney as well as to each other.

Section 409A was enacted as part of the American Jobs Creation Act of 2004 and is generally effective the first of 2005. Many questions have arisen since the enactment of Section 409A as to the impact it would have on structuring attorney fees.

The guidance, which is published as IRS Notice 2005-1, is in the form of 38 questions and answers that address certain aspects of the scope and mechanics of Section 409A. [IRS Notice 2005-1, Q&A-8 (copy attached for reference), to be officially published in 2005-02 Internal Revenue Bulletin (January 10, 2005).]

GFY Foods, Inc. Announces Diversification into Financial Services Market; Anticipates Immediate Return on Investment with Residual Revenue Growth

BUFFALO GROVE, Ill. (BUSINESS WIRE) Dec. 13, 2004 GFY Foods, Inc. (OTCBB: GFYO) announced today that the company intends to diversify its business focus by moving into the Financial Services market through the purchase of Viaticals, or Life Settlement Policies.

As previously announced GFY Foods plans to diversify the companys products and services in the coming weeks and months. In a step toward accomplishing that, the company has now started to move into the financials services market through the purchase of Viaticals, or life settlement policies. Ed Schwalb, the CEO of GFY Foods, Inc. states We feel that this market may offer us a way to generate a significant and fixed return on an initial capital outlay that is understood at the start of the transaction. Our intent is to leverage the financial resources that we have available as a public company to purchase a number of life settlement policies. Ed Schwalb continued to state, We anticipate these policies will generate a residual revenue stream. These purchases will provide the company and its shareholders diversification within the food and financial services market.

The move into financial services is part of the new strategic plan that is being put into place. The company's intent is to diversify its focus and to build a business services division that it hopes will make a significant contribution to its bottom line by the close of calendar 2005. The move into Viaticals is a step in this diversification process. The company hopes to announce additional products and services in 2005.

About GFY Foods, Inc.

Founded in the spring of 2003 by Ed Schwalb GFY Foods is currently operating three restaurant locations. The company believes in the importance of providing high quality foods at affordable prices that are healthy alternatives to food that is now being sold to the American public.

For more information please contact Investor Relations at (973) 351-3868.

This release contains forward-looking statements within the meaning of the Securities Litigation Reform Act. The statements reflect the company's current views with respect to future events that involve risks and uncertainties including uncertainties related to successful negotiations with other parties, closing of transactions, capital availability, operational and other risks, uncertainties and factors described from time to time in the company's publicly available SEC reports. In light of these risks and uncertainties, the forward-looking events described in this release might not occur.

As many of you know, the NSSTA (National Structured Settlement Trade Association) and their insurance company membership has declared war on the cash flow industry. Their goal is to stop all sales of structured settlement payments, thereby putting settlement purchasers totally out of business.

To accomplish their goal, they have introduced legislation known as H.R. 4314. This legislation is presently under consideration by the House Ways & Means Committee. H.R. 4314 imposes a 50% excise tax on the sale of structured settlement payments. If this bill passes, our industry will cease to exist.

What does that mean for clients?
If H.R. 4314 becomes law, anyone who wishes to sell all or part of their structured settlement payments will no longer be able to do so. This is what the insurance companies want to make it impossible for you to sell your payments or get advance money from your settlement. Insurance companies want to take these options away from you permanently.

Why?
Insurance companies make a HUGE amount of money on structured settlements. In the process of helping people sell their payments, settlement purchasers are educating people about the realities of structured settlements, including the time value of money and what your settlement is REALLY worth. Insurance companies DO NOT WANT YOU to learn the true nature of the structured settlement industry. They have a vested interest in keeping you in the dark. Settlement Purchasers are putting a serious crimp in their style, shedding light on a subject that they want to keep off limits, and offering the public alternatives when their situations have changed. The NSSTA and their membership insurance companies are committed to stopping this trend by stopping us and you from ever selling another payment!

We believe that people should be informed of their rights and their options. We believe the choice as to whether or not to sell a structured settlement payment belongs to the injured party, or their representative not to inflexible insurance companies. The settlement purchasing industry was created in answer to the needs of recipients whose situations had changed. Our industry has been providing choices for people who need to gain access to their money now. But, should H.R. 4314 pass, YOU WILL NO LONGER HAVE THOSE CHOICES!

H.R. 4314 will take away your rights to ever sell your payments, no matter what the circumstances.

DON'T LET THIS HAPPEN!
The NSSTA and their member insurance companies want to strip you of your rights in order to protect their cash cow! If you want to stop them, you need to act now! The House Ways & Means Committee is hearing arguments and testimony on this bill as we speak and a vote is soon forthcoming. The only way to protect your rights is by speaking up. Let congress know how you feel. Should the insurance companies be trusted to decide what is best for you and your money? Or, would you like to have some say in the matter?

Our organization, the National Association of Settlement Purchasers, has been fighting the insurance companies on all fronts, but we need your help. If you want to keep your rights, you must tell congress.

Here Is What You Need To Do:
Call your Congressmen and your Senators. Urge them to strongly oppose the H.R. 4314 bill. Write or email your Congressmen and Senators. Tell them how you feel about this legislation. The names, addresses, telephone numbers and email addresses are easily found on the internet at www.congress.org.

Send your message directly to the House Ways And Means Committee. Individual members of this committee can also be located simply by going to www.congress.org.

If you have had occasion to sell a structured settlement payment, or know someone who has, share with your congress how this has positively impacted your life. Many of you have shared with us how you purchased a home, got out of debt, started a business or paid for higher education using these monies. These stories should be made available to your representatives so that they have a clearer picture of what is really happening here.

Please do not let this matter pass without taking some action.
H.R. 4314 is a bill based on insurance company greed and should not be allowed to become law. Your letter, your phone call, your email could make the difference in ensuring that your rights are upheld. Let your voice be heard. Make your congress listen!

The following pages contain information about H.R. 4314, what the insurance companies are saying, and the affect that this bill will have. If you would like further information, you can contact the National Association of Settlement Purchasers at (202) 828-6050 or fax them at (202) 429-5113

A broker bought policies to help his customers, leading his firm into the new resale market and to rapid growth recently.

That lemons to lemonade thing certainly worked for Alan Buerger.

When a few life insurers whose policies he had sold failed in the 1980s, he bought the policies and took over the claims, rather than stick his customers with the hassle of getting their money back.

More than good business, it turned out to be a great business opportunity.

From those occasional purchases, Buerger's Coventry First L.L.C. began in 1998 focusing on the nascent market of insurance policy resales.

He buys from affluent retirees life insurance policies that no longer suit their needs. Most are investment-oriented policies that have had disappointing results. Buergers institutional investors can profit handsomely when the original policyholder dies.

The firm based in Fort Washington, Montgomery County, recently made its second appearance on Inc. magazines list of the 500 fastest growing private companies, climbing to No. 10 from No. 12 in 2003.

Coventry's revenue jumped 63 percent last year to $268 million from $164 million in 2002. Buerger expects revenue this year to have grown 50 percent to about $400 million.

Coventry is beginning to shake off some of the negative effects on the resale market of a different approach to buying insurance policies.

So called viatical settlement companies buy life insurance policies from the terminally ill and sell interests in them to investors, who would benefit from their early death.

Booming in the early years of the AIDS epidemic, as patients sought cash for their remaining days, many of the companies went bust when treatments began extending lives.

Some companies turned to fraud. In one scheme, companies obtained policies on individuals who were already ill and sold them to investors even though the insurers were unlikely to pay.

Coventry sailed above the fray, courting affluent retirees as sellers and institutional investors as buyers, Buerger said. We want to make certain that our policyholders are sophisticated sellers, he said.

Coventrys sellers unload policies they no longer need for estate planning or tax purposes, or that require unexpected premium increases to compensate for bad investment markets.

It's not that they want to get rid of insurance, Buerger said. They want to get rid of premiums.

Before a resale market sprang up, the only choice was to sell the policy back to the insurance company surrendering it for its cash value, in insurance parlance.

Coventry can pay more than the cash value in about 20 percent of the cases it sees, Buerger said. Reviewing medical records and determining life expectancies for prospective sellers, the firm works backward from the death benefit to determine what it will pay.

Paying policyholders $375,000 for a $1 million policy, for example, the buyer would earn an annual return of 15 percent if the person dies in seven years, obliging the insurer to pay $1 million.

Buerger will not say how much Coventry earns on these transactions, except that his revenue depends on how well his investors do.

Buerger says his institutional investors earn 10 percent to 12 percent a year after assuming premium payments and other expenses.

American International Group Inc., one of the worlds largest insurers, has been described as his principal backer. Buerger and AIG officials would not comment.

The sellers have made out as well, Buerger said. Buying $3.5 billion in policies since 1998, Coventry has paid policyholders $350 million more than they would have received by surrendering their policies, he said.

The practice has its critics. The transaction is going to create a financial interest in your quick death, said Joe Belth, a retired Indiana University insurance professor.

There are no controls over who the buyer can sell the policy to, he said.

Buerger says his institutional investors face no greater moral dilemma than do insurers who promise to mail monthly annuity checks to retirees, and thus also have a financial stake in when they die. In addition, Coventry's contracts oblige it to protect sellers identities, he said.

Standard & Poors Rating Services recently gave Coventry a strong ranking as a provider of consumer financial services, the first review of its kind in the life settlement business.

Coventry faces growing competition, said Patti Brennan, a financial planner in Westtown, Chester County, who advises clients to shop their policies. There are 30 or 40 companies now. There will be a hundred eventually, she said.

Senior Settlements L.L.C., of Cherry Hill, sells securities to investors backed by packages of resold life insurance policies, for example.

To stay ahead, Coventry is now buying underperforming variable annuities investment contracts featuring death benefits and adding other services for policyholders.

Coventrys workforce has grown from 94 last year to 135 now. Buerger expects it to reach 300 to 400 by early 2007.

Buerger and his wife, Constance, Coventry's chief operating officer, have no plans to sell shares to the public. Right now, we're having more fun than anyone should be allowed to have, he said.

Written by Todd Mason of Phillynews.com

Everyone knows that National Capital Corporation has been a leading business note buyer for years. While we originally started out just like you as brokers, we began buying real estate notes shortly thereafter. Our interest in the diversified segment of the secondary market lead us to business notes as well other “off the wall” note types (as in mobile home paper without land, etc.).

Recently, we were approached by a national group that represented intermediaries (we’d call them brokers) that are involved in extremely large corporate transactions, primarily mergers and acquisitions. We’re talking about deals that typically exceed $10,000,000.

While a typical buyer for a business of this nature has the financial strength to arrange the complicated financing required for large deals, quite often a seller, in addition to cash, stock and other considerations, receives paper as part of his compensation. Forget the fact that we’re dealing with sophisticated buyers and sellers for a moment and realize that they, like most noteholders of the world, are not aware of the options they have with the cash flow they are presently receiving.

Like the Ma and Pa noteholders we all deal with on a regular basis, these corporate noteholders often have cash requirements over and above what the cash received can satisfy. While the discounts, as always, on a full liquidation are steep, quite often a partial or split payment (or split payment partial) will provide the sellers with exactly the amount of additional capital they require right now while allowing them to retain future income from the portion of the note not touched at this time.

Those of you who have attended my sessions on closing techniques at different conventions or spent the day with us at our national sessions on seller-financed business notes know that our focus with business note sellers, large or small, is to supplement the cash they received to date through one of the alternative to full liquidation (unless we’re talking about less than a couple years of payments where the discount will not be too severe). By demonstrating how they can use this income stream much like their own personal line of credit, pulling out only what they need now and retaining the Lion’s share of the note from the future income not touched at this time, a seller will always be better off.

Let’s look at an example:

A large manufacturing business sells from one partner to another for $15 million, receiving approximately $10 million in cash, stock, stock options, equipment trades and concessions, etc. The seller/partner allows his former partner to pay him the $5 million balance owing through a 10-year note at 9 percent, fully amortized. Monthly payments are $63,337.89. Six months have gone by at the time we are contacted by the seller. Therefore, we have approximately 114 monthly payments remaining to play with.

The seller wants to pay off outstanding debts, mortgages, etc., take a vacation with his wife and generally get as close to debt free as he can. He advises he needs (geez, I love that word) about $1,000,000.

Those of you who have been working the seller financed business note arena know that the typical investment maximum for business notes with some funding sources has generally limited the ability to help clients with notes that exceeded $750,000 to $1,000,000, although one of the inductees to the Million Dollar Club this year achieved MDC status on one multi-million dollar business note.

Some funding sources like National Capital have the ability to fund up to approximately $3,000,000, subject, of course, to all due diligence. We can also consider corporate obligation only on the debtor’s part for these larger notes (small notes, under $100K still require personal obligation). Yields are high, typically in the 28 percent to 30 percent range; however, structured correctly, you can still provide the seller with the cash he needs while not giving away the farm.

So, with that in mind, let’s assemble the numbers for this deal.

Seller needs $1 million; monthly payments = $63,337. Using a 30 percent yield you’ll find that we’d need to take an assignment of approximately 20 payments to fund the required $1 million.

The seller presently has 114 payments remaining, so when he gets the note back, he’ll still have 94 payments or approximately $5.9 million in future income he retains, which — and make sure you point this out — he can always go back to for additional cash flow should his financial situation ever dictate. So he gets $1 million now and retains $5.9 million in future income for a total of approximately $6.9 million over the life of the loan. Bring to the seller’s attention the reality that the total figure exceeds the present balance of the note. Keep in mind that the above does not include any broker fees. Obviously you always add your desired fee to the seller’s needs and present that total number to us for quoting.

The example above is obviously a straight forward partial. Many clients, while still needing the $1 million now, also need to retain some income each month from the note. In a situation like that, we simply determine how much of the monthly payment he wants to hold onto and perform our calculations with the reduced payment amount.

Where do you find these larger notes? Corporate America basically, so your marketing now needs to target corporate attorneys, merger and acquisition companies, larger accounting firms who have large clients, good-sized banking/lending institutions, etc. Additionally, when introducing your services to these entities, make sure you tell them that you’re also interested in any “Golden Parachutes” their clients may be collecting (retirement compensation) as well as straight sales or partnership buyouts where a note is in existence.

Remember, not every transaction will have paper involved, but as with any note type or marketing avenue, you need to plant seeds”, letting the world know what you can do when an opportunity where paper is involved is presented.

Written by Ed Lisogar, President of National Capital Corporation.

When the high-tech industry imploded in 2001, so did Richard Lowrys consulting business. By 2002, his company, which designed custom computer chips, had gone bust, and Lowry could no longer afford thousands of dollars in annual premiums on two million dollar life insurance policies he had taken out to protect his family and company.

When he informed his agent that he planned to let the two term insurance policies lapse, Lowry, 56, got some surprisingly good news: Rather than dropping the policies (which had no cash surrender value), he could sell them to an investor who would take over the payments and collect the benefits when Lowry dies. In return for the transaction, known as a life settlement, Lowry collected $280,000.

If someone wants to give me a lot of money for something that is worthless to me, I don't see a downside, says the Orlando entrepreneur-turned-author. Lowry used some of the cash to replace lost income, which allowed him to pursue his passion for military history and write his first book, The Gulf War Chronicles. Lowry and his wife, Vickye, also used the money to pay college tuition bills for their three sons.

A lively market
The idea of reselling life insurance policies is gaining in popularity, particularly among older policyholders who may no longer need the insurance or who can't pay the premiums. Some people use the money to buy cheaper life insurance or long term care insurance.

Life settlements are an offshoot of viatical settlements, which were created in the 1980s to buy life insurance policies from terminally ill AIDS patients. But as medical breakthroughs extended the lives of AIDS patients, investors who had been betting on their early demise saw their potential profits disappear.

Unlike viaticals, life settlements involve policyholders with life expectancies of up to 12 years. Although most candidates are at least 65 years old, Lowry qualified because he had a history of heart disease and had had triple bypass surgery. I plan to live quite a bit longer, says Lowry, who hopes to beat the odds and outlive his abbreviated life expectancy. He has a life insurance policy still in force that will pay benefits to his family at his death.

Cashing out
The size of a life settlement turns on several factors, including the policyholder's life expectancy, the face value of the policy (a minimum of $250,000 is usually required) and the premium an investor will have to pay to keep the policy in force, says W. Scott Page, president and chief executive officer of Lifeline Program, a life settlement provider based in Fort Lauderdale, Fla. Unlike viatical settlements, which link individual investors with terminally ill policyholders, large institutional investors looking for higher returns than those available in the bond markets are fueling the demand for life settlements. In 2003, sales reached more than $4 billion.

Doug Head, executive director of the Viatical and Life Settlement Association, in Orlando, says a typical life settlement yields about three times the policy's cash value, which is the amount the policyholder would get if he simply cashed it in. Term policies, which have no cash value, are also eligible for life settlements if they are renewable or convertible to cash value policies.

As long as you are not worried about your heirs and you plan to let your policy lapse anyway, you might as well find out what it is worth, Head says. The association's Web site, www.viatical.org, includes a list of life settlement brokers who will screen a policy for eligibility.

Because it is a new industry, there can be a vast difference in life settlement figures from one broker to another, warns Norman Hood, an independent broker in Rushville, Ill. Hood, who has sold insurance for more than 30 years and arranged more than 100 life settlements, says that most of his referrals come from lawyers, accountants and financial planners. He is developing a Web site www.policysettlement.com, which should be launched by year end to help potential clients and advisers learn about life settlements and shop the market.

Although a life insurance death benefit is tax free, a life settlement is taxable to the extent that it exceeds the total premiums you've paid on the policy. Last summer, the National Association of Insurance Commissioners decided that any licensed life insurance agent could broker a life settlement, rejecting the industry's proposal for special training and licensing requirements. The decision is expected to further accelerate life-settlement transactions.

by Mary Beth Franklin
Article from Kiplinger.com

Twenty years ago, businesses looking to factor did not have the options of being very selective. Now, with factoring on the rise and many firms to choose from, factors come in all shapes and sizes. In considering the best factor for your business, look to factors that handle businesses like yours.

There are basically four types of factors for you to consider: large institutional factors, full service discount factors, niche factors and factoring brokers. Large institutional factors service multi-million dollar Fortune 500 types of corporations and international conglomerates. There are only a few factors of this size in the country and they are almost always owned by bank holding companies. Typically they focus on large corporations with huge numbers of accounts, factoring with recourse, and without many of the beneficial management services that smaller factors offer.

The difference between a full service and a niche factor is usually the focus of their business. Both offer relatively the same services, but a niche factor will target one or more specific industries, such as medical, construction or international trade areas. If you find a niche factor that specializes in your industry you should consider the advantages: the niche factor may understand your business better, may be more innovative with financing solutions, and may already know many of your customers. The drawback will be that niche factors are often smaller, and although they are capable of providing very personalized service, they may not be able to handle the financial volume of your invoices and they may not be as established as a larger company.

Full service factors make up the majority of the factoring companies in the country. When you deal with a full service factor, you should have a direct relationship with the decision maker. This is one of the primary reasons that dealing with a factor is traditionally easier than dealing with a bank. When you submit an application to a bank loan officer, too often he or she will come back stating the loan review committee just could not make it happen. Dealing through a middleman who has no decision-making authority can be very frustrating when you have no access to the powers that be.

When you work through a factoring broker, you should have a dialog directly with the factor. Unlike a bank loan officer, the factoring broker should not serve as a barrier between you and the factor. The factoring broker is more of a facilitator, usually located in your city, who represents a factor that may be in another city or state. Beware of the factoring broker posing as the factor. Factoring brokers can be a great asset, but only when their services are presented for what they are - access to factors.

Sovereign Funding Group is a factoring broker. We deal with the three types of factoring companies discussed above. Whether it is a niche, full service or institutional factoring company you are looking for we can quickly put you in touch with the company that can best solve your cash flow needs in the minimum amount of time.

The below article by William Garmer is an excellent editorial which tells the reader to be weary of company's like Sovereign Funding Group which tell prospects that they are entitled to a lump sum payment should they choose.

We completely agree with Mr. Garmer's opinion. Whenever we speak to a client we make sure that the advantages clearly outweigh the high costs of selling their structured settlement. Unfortunately this analysis is very rarely done in our industry.

Introduction
In 1973, Shirley Adams of Memphis, TN gave birth to a daughter, Tiffany, who was born with brain damage. After an investigation with their attorney, Mr. and Mrs. Adams determined that their daughters condition resulted from medical malpractice by the attending physician and the hospital.

In 1980, just prior to the case going to trial, the Adamses received a cash settlement of $250,000 from the insurance companies of the doctor and hospital. Despite the attorneys advice to invest this money prudently, Shirley says her husband put it into his construction company.

During the mid 1980s, that company incurred losses and Tiffanys money was gone. By 1990, the Adams separated and in 1993, they divorced. Tiffany, who lives with her mother, receives no child support.

But the story does not end there. In 1987, a manufacturing defect caused Tiffanys wheelchair to roll into the street, where she fell down face first. She sustained severe facial injuries. This time, Ms. Adams insisted that the settlement she received from the wheelchair manufacturer be taken in something known as a structured settlement. This is an under utilized option available to individuals concerned about making their one time settlement last a lifetime.

Instead of taking all the money up front and then figuring out how to invest it, Ms. Adams worked with her attorney and a financial expert to devise a long term series of payments to meet Tiffanys future needs. They took the money from the settlement and purchased an annuity that guaranteed them tax free payments to meet Tiffanys needs. Today, a decade after the 1989 structured settlement, Ms. Adams is convinced of the benefits the structured settlement has brought to her life.

Taking care of Tiffany is a full time job and requires constant attention, not to mention the financial need, she says. My structured settlement protects Tiffany from other people taking advantage of her for the whole amount of the settlement.

Guarding Your Financial Freedom
Large monetary judgments have become the most talked about aspect of Americas legal system. These awards catch the medias attention and they are the subjects of well known movies. This attention, however, overlooks a few crucial points.

1. Is the person who was injured really best served by taking a large, lump sum payment?

2. Is there any alternative to one payout?

These questions are particularly important when looking at the future well being of individuals with brain injury, who frequently are physically impaired and require expensive long term care. The reality is that many individuals with brain injury, especially the young and those unfamiliar with money management, may be poorly equipped to handle the problems of large cash payments. Family members, existing friends and unsavory new friends can attach themselves to the newly enriched individual with devastating financial consequences.

That is why, in 1982, Congress passed legislation to ease the financial worries of these individuals and those who care for them. With bipartisan support, Congress added a provision to the federal tax code that offers an alternative choice to a large cash settlement called a structured settlement. This is a benefit that I and thousands of plaintiff attorneys have recommended to clients as one of the best ways to guarantee financial security and independence.

A structured settlement involves a trade off. The individuals who were injured and/or their parents or guardians work with their lawyer and an outside broker to determine future medical and living needs, including upcoming operations, therapy and medical devices. In a structured settlement, an annuity is purchased and held by an independent third party that makes payments to the individual who has been injured. Unlike stock dividends or bank interest, these structured settlement payments are completely tax free. Moreover, the annuity grows tax free, and over time, this provides an after tax rate of return that few investors could match.

There is another benefit, too. As Don McNay, President of The Prestwick Group, a leading settlement brokerage firm, puts it, Serious injuries such as brain trauma create major legal, medical and emotional stresses. So when our brokers put together a structure, we do everything possible to make sure that these individuals do not ever have to worry about finances. That is a great relief to our clients and their parents or guardians.

Beware the Pitch for Cash Now!
As a plaintiff attorney, my first concern is the long term well being of my clients even after the final settlement. That is why I, and plaintiff attorneys around the country, increasingly have become concerned with the emergence of companies offering quick cash to individuals in exchange for their long term payment streams. You may have seen their advertisements typically 30 second spots promising fast cash. This completely undermines the federal law creating structured settlement benefits and risks the well being of thousands of individuals. I have seen cases in which people were convinced to sell more than $100,000 in future payments for less than 50 cents per dollar.

Individuals with brain injury may be at particular risk from these companies advertising. In Minnesota this year, Attorney General Michael Hatch announced that his top legislative effort was passage of a bill to stop abusive practices against persons with disability. He appeared with a 20 year old individual with brain injury who had sold $67,500 in structured settlement payments for about $13,000. According to his attorney, that was barely one third of the actual value. This summer, Minnesota Governor Jesse Ventura signed such a bill into law.

Other states also have taken notice. Besides Minnesota, nearly a dozen states have passed legislation protecting structured settlement recipients from abuses by these companies. This effort has received considerable support from consumer groups, disability advocates, trial lawyers and insurance companies. Several state attorneys general are investigating the practices of these firms.

The bottom line is that structured settlements are great tools to protect the long term financial security of individuals with brain injury. I have recommended structures to my clients for years and never have had a client express regret. I also offer a warning to watch out for companies that try to buy structured settlements for quick cash. If you are thinking about cashing out your structured settlement, first contact your attorney. As we all know, if the deal sounds too good to be true, it probably is.

Bill Garmer of Savage, Garmer & Elliott, P.S.C. in Lexington, KY, limits his practice to representing consumers who have been injured, especially in product liability and medical malpractice cases. He is a member of the Board of Governors of the Association of Trial Lawyers of America. Garmer is also past chair of the council of state presidents of the Association of Trial Lawyers of America and past president of the Kentucky Academy of Trial Attorneys. He is adjunct professor of law litigation skills at the University of Kentucky College of Law and Fellow of the American College of Trial Lawyers. Garmer has been listed in The Best Lawyers in America since 1987

Article seen here.

This is the first of a three part series designed to educate you on the elevating financial crisis within the healthcare industry and shed some light on the mysterious and relatively untapped aspect of factoring within the medical industry. We invite you to read on and learn more about how you could be the finishing piece to the healthcare cash crunch puzzle.

The climbing cost of healthcare has been among the top issues in this years elections, and it should be on your list of concerns too, because within the healthcare industry lies an immensely untapped potential for financing that is in dire need of your cash flow expertise. Allow me to explain the situation and then show you where you fit into the healthcare financial equation.

According to the Agency for Healthcare Research and Qualitys Web site, the United States spends a larger portion of its gross domestic product (GDP) on healthcare (nearly one seventh) than any other major industrialized country, and it has been one of the fastest growing areas within the federal budget for the past several years. In other words, a large portion of all U.S. economic expenditures (14 percent or $1.2 trillion) is spent on providing healthcare to Americans. On the surface, this appears to be a good thing because if more money is budgeted for healthcare, more people can benefit from it. Yet there is an underlying irony an increasing number of healthcare providers continue to operate in the red. In fact, according to the American Hospital Association, one third of Americas 5,000plus hospitals are actually losing money, while another one third are barely breaking even. So whose to blame for this financial crisis? Most would assume that healthcare institutions are the ones to blame. It is easy to jump to the conclusion that the institutions are abusing the system and that they are not using their allotted sums appropriately. However, in reality, there are a number of culprits on the playing field, and only one of them is healthcare institutions. An aging population, an increasing number of uninsured Americans, and slow paying government aid programs all play a part in cramping the budgets of hospitals, physicians, employers, and consumers.
Over the past 50 years, our nations population has aged significantly. The baby boomers are quickly approaching their 65th birthdays, which will place them in the oldest adult segment of the American population. (In fact, the U.S. Census Bureau projects that over 20 percent of the American population will be included in the oldest segment by 2050, see figure 1). According to The 2003 Chart book on Trends in the Health of Americans, the surge in elderly adults will place tremendous stress on Americas healthcare system during the 21st century because additional services will be necessary to treat and manage their chronic and acute health conditions. Over 40 million retired elderly adults will be depending solely on Medicare to cover their medical bills next year, a problem that I will delve into later in the article.

In addition to the baby boom generation getting older, our younger generation has received the short end of the stick when it comes to healthcare coverage. Medicaid usage and the percent of uninsured Americans has been on the rise since 1984. The 2003 Chart book on Trends in the Health of Americans reported that in 2001, adults aged 18 - 24 were most likely to lack health insurance coverage (16 percent went without for the year) and those 55 - 64 were least likely. In addition, the Denver Post reported that the number of uninsured young adults aged 25 - 34 jumped dramatically during 2003, from 9.8 million to 10.3 million. Rising health insurance premiums and overall poverty rates have both contributed to the 45 million Americans who went uninsured last year, as reported by The New York Times.

For example, expensive healthcare premiums make it harder for employers to afford coverage for their employees, creating an uninsured working class. According to the Washington Post, the proportion of the working class who received health insurance through their employers fell to 60.4 percent in 2003, (down from 61.3 percent in 2002,) the lowest level in a decade. Within that uninsured working class, 20.6 million people were fulltime employees. Add in the fact that emergency rooms are obligated to care for any patient that comes through their doors, regardless of whether they have insurance or not, and what do you get? Answer: Millions of uninsured people who visit the emergency room to receive medical attention and who also rely on the hospital to foot the bill.

To make matters worse, the U.S Census Bureau reports that poverty rates have been steadily increasing over the past few years (12.3 percent in 2002, translating to 34.6 million people, see figure 2), forcing a majority of the less fortunate population to either go uninsured or rely on Medicaid to pay their medical bills. Neither option is a promising solution to the healthcare cash crunch equation because the facilities cannot count on being recompensed directly and adequately for their obligated medical actions. Hence, the increase in uninsured Americans and those who rely solely on Medicaid and Medicare has had a tremendous affect on the United States healthcare institutions. Title XIX of the Social Security Act, commonly known as the Medicaid program, is the largest source of funding for medical and health related services for Americas poorest people. However, since its launch in 1965, Medicaids costs have rapidly increased, paying an average of $3,935 per person to healthcare vendors in 2000, as reported by The Official U.S. Government Site for People with Medicare (www.medicare.gov). On the other hand, the Medicare program was created in 1965 under title XVIII of the Social Security Act. Designed to provide basic hospital and medical coverage for adults aged 65 and above who are no longer working and therefore are unable to pay for healthcare, Medicares costs have also increased rapidly, and it currently covers 41 million Americans.

Although Medicaid and Medicare programs can be beneficial for underprivileged and elderly Americans in need of healthcare, American medical institutions and their vendors dont fare quite as well in this cash crunch equation due to sluggish and inadequate payments from the above federal programs.

Because each state has its own unique way of filing for government healthcare coverage and because of capped expense amounts, federal insurance plans like Medicaid and Medicare make their payments slowly, sometimes taking months to deliver funds and in many cases, the government mandated payments do not cover the actual cost of providing care. Accordingly, healthcare institutions such as hospitals and nursing homes take a longer time to pay their own invoices. As a result of their inadequate financial resources, these hospitals and nursing homes suffer from dwindling human and technological resources. So in an effort to save money, facilities are forced to make cuts in staffing and special treatment programs, pass on costly technological advances, and start outsourcing more general positions, which creates a whole new world of vendors who sell to hospitals and nursing homes. (Think: janitorial services, cafeteria workers, temporary nurse staffing agencies, and medical transcriptionists, to name a few.)

Here is where you enter the equation. As cash flow consultants, it is your mission to make the cash flow in companies, is it not? You take it upon yourself to find businesses needing funds, and then you match the client with a company that can supply them with adequate working capital. When searching for funding, it is imperative that you understand your clients business, and it is equally as important for the actual company providing the funds to understand your clients business. A bond is made between you, your client, and the funding company, which means that all parties involved need to be familiar with the others intentions and wishes going into the deal in order to make the best financial arrangement. But with so many different types of funding to choose from, vendors look to you to help them sift through the information, which makes it even more critical for you to understand your clients business and their specific funding needs. This can be challenging when working exclusively with vendors serving healthcare institutions because it is such a specialized industry, filled with unique working opportunities, complicated lingo, and elaborate payment methods.

So, lets revisit that cash crunch equation once again. Healthcare institutions need money to help patients, increase technology, and pay their vendors. But because it sometimes takes months for hospitals and nursing homes to be paid for their services, they are forced to take additional months to pay their own vendors for their services. In the meantime, those vendors suffer because they cant make payroll or pay taxes. So they reach out to consultants like you to help them find a way to stabilize their cash flow. Lucky for you, you understand their frustrations with the healthcare financial crisis, and you are fully capable of setting up a deal with a funding company that also understands the healthcare industry. And thus, the cash crunch equation is solved thanks to you.

Want to learn how you can help even more? Please read next months article, which will go into further detail about the financing options that are available to these vendors, and find out which one holds the missing piece to the healthcare cash crunch puzzle.

From American Cash Flow Journal Dec 2004. Written by Nicole Spiezio of PRN Funding.

Bankrupt fish merchant ordered to pay 50000 compensation

A dishonest fish merchant who was convicted and imprisoned for fraud has been ordered to pay 50,000 in compensation to his victim following proceedings brought by the DTI.

Christopher Leonard Bish, of Brighton, was convicted in July 2004 after defrauding finance company Singer and Friedlander of 700,000.

Despite being made bankrupt, Bish tried to hold onto his share of a Spanish villa valued at 50,000. Because it was overseas, there was no power to seize it under bankruptcy laws.

As this was the last of his assets, the court made a compensation and confiscation order for the same amount, forcing Bish to sell up.

Bish, a director of Jelfish Ltd, made a 700,000 profit for his company by inventing a network of customers. He claimed "van men" bought and distributed fish and seafood to sell on to the public, when in fact they were fictitious.

For each fictitious sale, Bish raised a false invoice and sold the false debt at a discount to debt factors, Singer and Friedlander, who would then seek to reclaim the full amount from the non-existent debtor. This is known as a factoring fraud.

In total, Mr Bish issued more than 4,500 false invoices, with a face value of 5.5m.

Factoring agreements', as Jelfish had with Singer, are a common source of income for companies providing a ready needed cash flow solution. A company sells its book debts to the factoring company. The company forwards invoices showing money owed to it to the factoring company, together with a request for payment, which is normally made by the factoring company within three working days. The factoring company then seeks to recover from the company's debtor the full value of the debt. Jelfish paid Singer (as is usual in such agreements) a service charge for the facility interest on all borrowed monies over an agreed period of up to 120 days.

Mr Bish was made bankrupt by Singer and Friedlander in the High Court. His trustee in Bankruptcy is Mr Carl Stuart Jackson of Tenon Recovery, Highfield Court, Tollgate, Chankdlers Ford, Eastleigh, Hants. The Official Receiver at Brighton is the liquidator of Jelfish.

Where Official Receivers discover conduct by company directors that might constitute a criminal offence, the matters are reported to the Department of Trade and Industry Legal Services (Prosecution) branch, which has the power to investigate and prosecute any offences, where appropriate.

Confiscation proceedings were brought under the Criminal Justice Act 1988, which was designed to strip criminals the proceeds of crime.

All public enquiries concerning the affairs of the company should be made in writing to:

The Official Receiver, Public Interest Branch, 21 Bloomsbury Street London WC1B 3SS
Telephone 020 7637 6603
Email: piu.or@insolvency.gsi.gov.uk

Department of Trade and Industry
7th Floor
1 Victoria Street
London SW1H 0ET

Public Enquiries +44 (0)20 7215 5000
Article from CreditMan.biz

An independent team of cash flow professionals is in the process of developing a code of ethics for participants in the cash flow industry, Fred Rewey, president of the American Cash Flow Association, announced today.

Although our state and regional chapters have a code of ethics that governs relationships between cash flow consultants and their clients, we�ve felt a need to expand that code to include all elements of the cash flow industry and the relationships that exist, said Rewey.

We hope the code of ethics will alert consultants and clients to some of the problems that can arise when they encounter scam artists posing as sources of funding, but we also want respectable funding sources to recognize those consultants who have the clients best interests at heart, he added. Serving the legitimate needs of our clients is the primary motivator of all cash flow professionals.

The need for an ethics code covering all elements of the cash flow industry became apparent in recent years as more and more consultants reported working with a number of funding sources whom they soon discovered could not be trusted. Clients also complained of consultants who were promoting funding programs that promised much but provided little.

We have always felt that a self-governed industry is far better for all parties than a government regulated industry, and we have seen what happens when scam artists infiltrate the industry, drawing the justified attention of legislators and law enforcement agencies, said American Cash Flow Associations president Rewey.

The team of independent consultants and funding sources developing the code of ethics are Dr. Hikmat Abed of Mach I Funding, Roberta Standen of North American Loan Servicing, and Jeff Callender of Dash Point Financial.

Dr. Abed is a graduate of the University of California at Berkeley with a Ph.D. in electrical engineering. He has a well rounded, diversified, broad, and successful management experience encompassing operations, engineering, manufacturing, corporate/strategic planning and analysis and management consulting, in addition to significant teaching and research experience at the university level.

His extensive business experience in project operations and general management includes more than 10 years of general management of companies with activities in international markets and more than 10 years of directing multiple projects and a large staff employed in a wide range of occupational areas.

His background includes several years of teaching graduate and undergraduate courses in engineering, mathematics and physics. He is the recipient of numerous scholastic honors. He developed and published lecture notes for four university courses, several research papers, and was annually voted as one of the top ten professors for the duration of his teaching career. He participated in and conducted several seminars and training programs in business administration, management development, technical training, and power utilities operations.

He is a graduate of the International Factoring Institute (IFI), a graduate of the National Capital Institute (NCI), a Certified Factoring Specialist (CFS), a Certified Capital Specialist (CCS), a Million Dollar Club member and a Master Consultant of the American Cash Flow Association (ACFA), a recipient of the American Cash Flow Corporation (ACFC) 2002 Presidents Award, a recipient of the American Cash Flow Journal (ACFJ) 2003 Contributing Writer of the Year Award and charter president of the San Diego Cash Flow Association (SDCFA). He published several articles on business funding and factoring.

He is the founder and president of Mach 1 Funding, which specializes in helping small and medium size businesses with their cash flow by providing them with immediate cash.

Roberta Standen, the driving force behind North American Loan Servicing, was appointed as president of the Corporation in June 2000, when the Corporation decided to expand its loan servicing business nationwide. Roberta is organized and highly skilled in business management, sales and marketing and in client relations. Her leadership and problem solving ability, coupled with incredible drive, keeps the organization on track.

A licensed real estate broker since 1974, Roberta is a 1977 graduate of the Realtors Institute and holds the professional designation of Equity Marketing Specialist (EMS) and Diversified Cash Flow Specialist (DCFS). Roberta is the former President and CEO of Coldwell Banker Mother Lode Properties Inc., and a certified teacher for the Coldwell Banker University

In addition to her responsibilities with North American Loan Servicing, she is General Partner of Mariposa Financial, a commercial real estate enterprise and serves as the Managing Member of California Equity Investors. Since 1984, she has served on the Board of Directors for California Equity Corporation, a company involved in loan origination and mortgage brokering.

Her experience includes project management for several major real estate development projects throughout California, including the Acuerdo con Dios Townhouse Development and the Story Hill project, both located in Northern California. In addition, Roberta has been a long-time specialist in real estate exchanges.

Roberta has authored many articles for the cash flow industry and is a frequent speaker and seminar presenter for the National Exchange Counselors, NoteWorthy, and the American Cash Flow Association.

The daughter of a minister, she is chairperson for Christian Business and Professional Women in Imperial County, CA. She has been married for 52 years and is the mother of four sons. She has 16 grandchildren and five great grandchildren.

A former pastor, Jeff Callender is an author, speaker, and president of a factoring company and a publishing company. He became a Certified Factoring Specialist in January 1994 and soon began purchasing small receivables. He has been a speaker at Cash Flow conventions since 1995 and has been a monthly columnist for the American Cash Flow Journal since that time. He is a member of the Million Dollar Club and the recipient of the 2004 ACFA Presidents Award.

Jeff is the author of The Small Factor Series, a collection of four books about factoring. The titles in this series include Factoring Fundamentals, Factoring Small Receivables, Factoring Case Studies, and Unlocking the Cash in Your Company. His newest book is Marketing Tools for Small Factors and Consultants: A Hands-On Guide to Methods that Work. He hosts SmallFactor.com, a web portal with numerous links and resources that are especially helpful for small factors and consultants alike. He also publishes FactorTips (www.FactorTips.com), a monthly e-zine for small factors and consultants. Further factoring resources are found at DashPointPublishing.com.

Jeffs factoring company, Dash Point Financial Services, Inc., factors small accounts and provides consulting services for small factors.

When the team finishes developing the initial code, it will be presented to a board of Chapter presidents for review and modification. It will then go before the American Cash Flow Associations executive committee for further review. Finally, it will be presented to by the membership at the Associations annual convention, Cash Flow 2005, in San Francisco this May, for adoption.

Publish Date : 11/28/2004 3:51:00 PM Source : Onlypunjab.com Team