Judge warns Flint’s water seekers not to take advances on settlement money

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U.S. District Judge Judith Levy on Thursday cautioned Flint’s claimants against partnering with companies offering what amounts to a cash advance on their share of the $ 641 million water crisis settlement.

Levy noted in his order that part of the settlement agreement, which has yet to receive final approval, prohibits the buying and selling of debt to third parties “including pre-settlement finance companies. or post-settlement factoring companies “.

Levy’s order came after Special Petty Officer Deborah Greenspan expressed concern to the judge at a hearing Wednesday over a website advising plaintiffs they could “get paid now” instead of waiting their part of the settlement.

Last Friday, a website for MC Law Funding, the site offering the advance, was the first ad result to appear after a Google search for “Flint Water Crisis”. The site offers an app portal for people damaged by Flint’s lead water crisis who want to “get paid now.”

A call and message to MC Law was not immediately returned.

MC Law Funding has also contacted Flint’s claimants directly via text message, said Michael Pitt, the group’s lead co-counsel for the claimants in the case.

The practice is quite common and particularly profitable for litigation finance companies, which often charge far more than the money advanced, said Pitt, who added that he universally advises clients against selling their debt.

“You give the litigation finance point a huge chunk of your settlement,” he said. “I’ve seen a number of these contracts, and some really ask people who are desperate to make oppressive contracts. Almost everyone who has done it and whom I know regretted doing it.”

Attorney General Dana Nessel on Friday urged applicants to ignore announcements of advances, arguing that they “would only inflict more hardship while being disguised as additional support.”

“To see a company view this historic settlement as a business opportunity is deeply troubling, but not surprising,” said Nessel. “We anticipated this and prepared accordingly by ensuring that the settlement agreement itself contains provisions prohibiting payments to these types of companies.”

The MC Law website home page offers “fast and convenient litigation funding”.

“The pre-settlement and post-settlement advances put money in your pocket immediately,” the site said. “No need to wait for your case to be settled and paid. And because the money is refunded from your settlement, you can get it now, risk-free, cost-free, and your credit score is a factor. “

Connie Harris of Flint, left, protests against litigation attorneys offering to receive a third of the $ 641 million Flint Water civil litigation settlement.  Attorney General Dana Nessel advises Flint claimants against taking advances on their share of the settlement.

Aside from the prohibition in the regulations, advances on Flint payments are risky as each person’s eventual payment will differ based on age, place of residence, or level of injury.

The settlement has not received final approval and it is also unclear how much each applicant will be paid, but it is likely that any applicant attempting to receive an advance will make it to the funding point much more than they do. ‘will receive some, Pitt said.

“What if the settlement doesn’t come as soon as you expect you to be charged extra money for the delay,” Pitt said.

Additionally, advances to or on behalf of minors – who will receive around 80% of Flint’s settlement – are likely to jeopardize or complicate their eventual payment, as many of the children involved in the case will receive money through structured trusts or settlements that do not lend themselves easily to cash advances.

“The judge was well aware of the matter and the prohibitions of the main settlement agreement,” Pitt said of Wednesday’s hearing. “Alone, she gave the order.”

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