Changing How We Look at Structured Settlement Transfers
In my March article, I wrote about the Cordero case, which remains well-known in the relatively small and insular structured settlement industry. Lujerio Cordero had sold, in six separate transactions, the majority of his guaranteed income streams from a structured settlement annuity to third-party factoring companies.
June 22, 2023 at 12:20 PM
8 minute read
Insurance LawIn my March article, I wrote about the Cordero case, which remains well-known in the relatively small and insular structured settlement industry. Lujerio Cordero had sold, in six separate transactions, the majority of his guaranteed income streams from a structured settlement annuity to third-party factoring companies. The structured settlement payments arose from a tort action brought by the parents of Cordero, who was then a minor, against his then-landlord due to the alleged exposure to lead paint. The annuity that funds those income streams was owned and issued by an AM Best top-rated insurance company. Those factoring transactions were approved by different courts who, at that time, arguably had jurisdiction to hear each matter under the applicable state Structured Settlement Protection Act(s). Years later, a remorseful Cordero (and his sophisticated counsel) did not sue the third-party factoring companies to try and get his money back. Instead, Cordero sued the life companies who own and issue the annuity contract for which he was payee, arguing that the underlying settlement documents and the language therein prohibiting assignment give rise to some fiduciary obligation on the part of the owner/issuer to enforce that language and stop the factoring before it happens.
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