Judge “deeply troubled” by company offer to buy Flint water leases

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FLINT, MI – New York company offers some sort of payday advance to those with Flint water crisis claims, and federal judge says she is “deeply troubled” by the development .

MC Law Funding is soliciting residents who have signed up to file claims under the proposed $ 641 million water crisis settlement, offering to pay them now in exchange for the right to their claims against the state of Michigan, the City of Flint, the McLaren Regional Medical Center, and Rowe Professional Services.

U.S. District Court Judge Judith Levy and Special Petty Officer Deborah Greenspan said Wednesday, August 25 that the regulations themselves prohibit payments to third parties and suggested that residents of Flint could deceive themselves even if the company was allowed to conclude transactions.

Levy, who has yet to give final approval to the settlement, heard Greenspan’s report on MC Law’s solicitations at a status conference on Wednesday, August 25.

“Here is my concern. I am deeply disturbed by this part of your report, ”Levy told Greenspan, whom she appointed as a special master to develop and implement the water crisis resolution program. “Before being appointed a judge, I was in contact with organizations like MC Law Funding, (which) were trying to solicit or work with… victims in the cases I was carrying.

“My experience in these cases – and it was not MC Law – was that the entities were paying pennies on the dollar of what might be a claim, and the individual forfeited his right to full recovery if he s ‘was engaging with them, “Levy mentioned.

MLive-The Flint Journal was unable to immediately reach a representative from MC Law for comment on Thursday, August 26.

The company says on its website that it “provides money to customers through a partnership in your case.”

“We provide you with the funds to pay your legal fees, medical bills or whatever you need. You get peace of mind and a partner in your legal action, ”the website says.

MC Law says it funds a variety of legal claims, including those related to traffic accidents, slips and falls, and civil rights. A section of the website is dedicated to Flint’s water claims and includes an online payment application.

“These types of deals are meant to generate a profit for the company providing the upfront payment,” said Greenspan. “I know there is a … app for people to learn about selling their receivables, which is basically what it (is).”

Greenspan said the settlement itself prohibits payment to a third party and “contains other provisions protecting settlement funds from surrender and modification to protect those funds.”

The proposed settlement, nearly 80 percent of which would be paid to children who were under the age of 18 when they were first exposed to the water from the Flint River, also contains strict controls over claims filed on behalf of minors.

The sale of these claims “appears to be in violation of these protective provisions,” according to Greenspan, who said the claims administrator “is prohibited from issuing payments directly to anyone other than the approved claimant” or his lawyer.

Michigan Attorney General Dana Nessel said in a statement to the Journal that residents should ignore solicitations that offer to prepay them less than what they are entitled to collect.

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

“It is also relevant to point out that Michigan law provides protections for minors that could prohibit or significantly limit the sale of a minor’s debt. I urge anyone who files a complaint to ignore these types of ads. They will only inflict more hardship while being disguised as additional support. “

Levy granted preliminary approval for the water by-law in January and conducted a fairness hearing before deciding whether or not to grant final approval. She said she wondered if the regulations meet the minimum requirements of being fair, adequate and reasonable.

More than 85,500 people have signed up to file claims for a portion of the $ 641 million, but legal authorities have said about 35,000 of those records appear to be or could be duplicates or were filed after the deadline. March 29.

Learn more about MLive:

Youngest victims of Flint’s water crisis to receive 80% of historic $ 600 million settlement

Judge gives preliminary approval to settle $ 641 million Flint water crisis

More than half of Flint residents have signed up for part of the water crisis settlement

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