A company that loaned $500,000 to a former professional football player eligible for compensation under the $1 billion concussion settlement may not arbitrate a dispute over their funding agreement, a federal judge has ruled in an effort to further last year's decision invalidating all similar loans between players and funding companies.

U.S. District Judge Anita Brody of the Eastern District of Pennsylvania on Tuesday ruled that Thrivest Specialty Funding was enjoined from arbitrating the validity and terms of the agreement it entered into with former Atlanta Falcons player William White. The decision was made, according to Brody, “in order to effectuate” the settlement agreement, which she last year interpreted as barring similar agreements that “assigned” a player's claims in exchange for money.

“The court properly invalidated the funding agreements as required by the settlement agreement's terms,” Brody said. “Consequently, Thrivest cannot collaterally attack that determination through arbitration. Such an attack is an improper assault on the terms of the settlement agreement.”

In December, Brody ruled that language in the $1 billion settlement specifically forbids lenders from entering into loan agreements that require ex-players to assign over their monetary claims. The ruling rejected arguments from funders that the language only forbid assigning a claimant's tort claims, rather than monetary claims.

According to a presentation last year at least 200 class members have entered into funding arrangements, and Thrivest has funding arrangements with 42 class members.

U.S. District Judge Anita Brody

In her opinion from Tuesday, Brody said White agreed to assign and sell a portion of his monetary claim to the settlement money in exchange for $500,000, minus a $192,000 deduction for a prior tax lien and a $25,000 transaction fee charge. Under the lending arrangement, White agreed to owe Thrivest 19 percent interest per year after he received money under the settlement; however, he would not owe the company any money if he received nothing from the accord.

Although White eventually qualified for an award under the accord, the settlement claims administrator determined that his agreement with Thrivest was an assignment, so the lending arrangement was invalidated.

Under Brody's December ruling, funders whose agreements were invalidated have the option of returning the money paid to them under the principle of rescission, or the funders could execute a waiver relinquishing the assignments and then the settlement claims administrator would withhold the amount from the class member's monetary award.

Thrivest was given an April 12 deadline to respond about possibly rescinding the money, but, instead, on April 11 the company filed a demand for arbitration, seeking a declaration that the agreement was valid and that White put $750,000 into escrow.

According to Brody's opinion, Thrivest contended that arbitration was required under the Federal Arbitration Act.

Brody, however, rejected that argument, and said that, in order to “prevent collateral attacks” on the class settlement, the court needed to use its powers outlined under the All Writs Act, which allows a federal court to issue any writs that are necessary to effectuate its orders.

“The court, through the claims administrator, has the power to adjudicate whether an agreement is an assignment or an attempted assignment, and if it is, the court has the power to invalidate the agreement,” Brody said. “Under the All Writs Act, the court can take all actions necessary to enforce that determination.”

A spokeswoman for co-lead class counsel Chris Seeger of Seeger Weiss did not return a message seeking comment. Peter Buckley of Fox Rothschild, who is representing Thrivest, did not return a call seeking comment.