Investment News

By: Darla Mercado

JGW Holdco’s bankruptcy filing points to problem for consumers and investors.

A recent bankruptcy protection filing by a provider of life settlements raises concerns that consumers in the midst of selling a policy, as well as investors, may get a raw deal in this and similar situations.

Last Monday, a Delaware bankruptcy court allowed JGW Holdco LLC and two other non-operating holding company affiliates, J.G. Wentworth LLC and J.G. Wentworth Inc., to emerge from Chapter 11 bankruptcy protection after the company encountered liquidity problems amid a tightening credit market.

Commentary from Michael Abraham:

I don’t understand this as it is my belief that funds must be deposited in an independent escrow account before contracts are sent out. This being the case how is the seller at risk?

http://www.investmentnews.com/article/20090607/REG/306079972

Published on 06 Jul 2010 at 05:28 am