Friday, January 2, 2015

Lender To Mass Tort Lawyers Claims Loan Default -- By A Few Fosamax® Plaintiffs' Lawyers -- Files Collection Suit

In some states (but not all, by any means) it is permissible to formally borrow money from a lender -- to finance mass tort litigation. In the below matter, a few of the plaintiffs' lawyers (as opposed to the clients, themselves) apparently borrowed -- to finance a portion of the Fosamax® ONJ MDL (and in some cases, at very high interest rates).

It is not clear whether the still ongoing femur fracture cases are also part of (or subject to) this lending deal. But if the lenders may only claim against the ONJ settlement fund assets, these loans may end up in a short pay situation. And that would likely be a particularly nasty fight. We shall see.

Here is a bit of the overnight local story, from -- but do go read it all:

. . . .The lawsuit says Powell and Bogert have neither repaid any of their share of the money nor made arrangements to repay it, although the Actonel litigation has been settled and the lawyers have already received more than $200,000 in legal fees. Moreover, the suit says, they are likely to receive "substantially more" when the Fosamax case's legal fees are distributed in the first quarter of this year. . . .

We will keep you posted (and I do think the ONJ disbursments will come in Q1 2015), but if almost $6 million was borrowed, and the current settlement fund -- for the whole MDL -- is around $29 million, the math is going to get pretty tight, pretty quickly. And I don't think all the plaintiffs' lawyers are obligated on the loans, so they will get their cuts free and clear -- leaving even less for this "legal funding" lender to seize.

The article goes on to suggest that some of the loans bear 24 per cent interest. Not too many sophisticated lawyers would be willing to pay that rate -- if they could get access high balance-limit credit cards -- for a lower rate, in many cases. Fascinating.

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