Litigation

Stone Street Capital's Shame About "Factoring"

By John Darer

Stone Street Capital's Michelle (Determan) Hsu would have you believe that the Internal Revenue Code is not correct and that the word "factoring" is not appropriate to describe what "The Stoners" do for a living.  Hsu makes these statements (among others) in a Stone Street Capital blog article called "Factoring vs Secondary Market Companies":

• "Many people refer to companies in the structured settlement secondary market as ?factoring? companies. 
• "Although similar ?factoring? is not the same as purchasing structured settlement payments. 
• "However, one major difference is that structured settlement transfer transactions are approved in a court of law by a judge.  The transaction must be shown to be in the best interest of the seller.  There is no such requirement for ?factoring?.

FACT: Internal Revenue Code Section 5891 (c)(3)(A) describes a structured settlement FACTORING transaction as "a transfer of structured settlement payment rights (including portions of structured settlement payments) made for consideration by means of sale, assignment, pledge, or other form of encumbrance or alienation for consideration".

The spin by a corporate officer* of Stone Street Capital  is disingenuous considering that a number of folks in the FACTORING industry like to point out IRC 5891 was a product of collaboration between the National Structured Settlements Trade Association and the National Association of Settlement Purchasers and that includes the immediately above cited definition that includes "FACTORING"

The preceding modifier "structured settlement" as precedent to "FACTORING transaction" is all that is necessary to avoid any confusion.

More Digital Diarrhea from Stone Street Capital

Like "Cash Now" Lump Sum Settlement Process Baseless Marketing Ploy

* according to public information Michelle(Determan) Hsu is the Senior Vice- Presideent of Marketing of Stone Street Capital.

Full post as published by Structured Settlements 4Real on April 11, 2009 (boomark / email).