rsl funding llcs first amended counterclaim - march 27, 2012

8/2/2019 RSL Funding LLCs First Amended Counterclaim - March 27, 2012

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CAUSE NO. 2006-23366

EVELYN E. FRANKLIN, SIMMIE

BERNARD KING, SETTLEMENT

FUNDING, LLC and PEACHTREE

SETTLEMENT FUNDING, LLC

vs.

RAPID SETTLEMENTS, LTD.,

RAPID MANAGEMENT CORP.,

RSL FUNDING, LLC, and

STEWART A. FELDMAN

vs.

SETTLEMENT FUNDING, LLC,

PEACHTREE SETTLEMENT

FUNDING, LLC, J.G.

WENTWORTH S.S.C. LIMITED

PARTNERSHIP, JGWPT

HOLDINGS, LLC, JLL PARTNERS,

INC., and DAVID MILLER

IN THE DISTRICT COURT

OF HARRIS COUNTY, TEXAS

113TH

JUDICIAL DISTRICT

RSL FUNDING, LLCS FIRST AMENDED COUNTERCLAIM

Defendant/Counter-Plaintiff RSL FUNDING, LLC files this First Amended Counterclaim,

and in support thereof would respectfully show the Court the following:

DISCOVERY CONTROL PLAN

1. Level 2 discovery controls this counterclaim.

PARTIES

2. Defendant/Counter-Plaintiff RSL Funding, LLC (RSL Funding) is a Texas limited

liability company with its principal place of business in Houston, Harris County, Texas.

3. Plaintiff/Counter-Defendant Settlement Funding, LLC is a Florida limited liability

company and has appeared herein.

Filed 12 March 27 PChris Daniel - DistricHarris CountyED101J016798324By: daunshae n. will


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4. Plaintiff/Counter-Defendant Peachtree Settlement Funding, LLC is a Nevada limited

liability company and has appeared herein.

5. Counter-Defendant J. G. Wentworth S.S.C. Limited Partnership (J.G. Wentworth)

is a Nevada limited partnership organized and existing under the laws of the state of Nevada, with its

principal place of business located at 40 Morris Avenue, Bryn Mawr, Pennsylvania, 19010. At all

times material to this action, J.G. Wentworth was engaged in business in the state of Texas, and as

more particularly described below, but does not maintain a regular place of business in the state of

Texas and has not designated an agent for service of process in Texas. Accordingly, J.G. Wentworth

may be served with process by serving the Secretary of State of Texas, 1019 Brazos Street, Austin,

Texas 78701.

6. Counter-Defendant JGWPT Holdings, LLC (JGWPT) is a Delaware limited

liability company and maintains its principal place of business at 201 King of Prussia Road, Radnor,

Pennsylvania 19087, and has designated National Registered Agents, Inc., Dover, Delaware 19904

as its registered agent, but does not maintain a regular place of business in the state of Texas and has

not designated an agent for service of process in Texas. Accordingly, JGWPT may be served with

process by serving the Secretary of State of Texas, 1019 Brazos Street, Austin, Texas 78701.

7. Counter-Defendant JLL Partners, Inc. (JLL Partners) is a Delaware corporation

which maintains its principal place of business at 450 Lexington Avenue, New York, N.Y. 10017-

3904, and has designated The Corporation Trust Company, Corporation Trust Center, 1209 Orange

Street, Wilmington, Delaware 19801 as its registered agent, but does not maintain a regular place of

business in the state of Texas and has not designated an agent for service of process in Texas.

Accordingly, JLL Partners may be served with process by serving the Secretary of State of Texas,


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1019 Brazos Street, Austin, Texas 78701.

8. Counter-Defendant David Miller is a resident of the State of Pennsylvania. He may

be served with process at his usual place of business, JGWPT Holdings, LLC, 201 King of Prussia

Road, Radnor, Pennsylvania 19087.

JURISDICTION and VENUE

9. The Court has jurisdiction over Settlement Funding, LLC and Peachtree Settlement

Funding, LLC because they have purposefully submitted to the jurisdiction of this Court, and the

acts or omissions complained of took place in Texas. The Court has jurisdiction over Settlement

Funding, LLC, Peachtree Settlement Funding, LLC, and J.G. Wentworth because these defendants

regularly conduct business in the State of Texas and have readily accessed the Texas state courts on

numerous occasions. Additionally, the Court has jurisdiction over JGWPT, JLL Partners, and David

Miller because the tortious acts complained of took place in Texas.

FACTS

10. RSL Funding previously competed with Settlement Funding, LLC d/b/a Peachtree

Settlement Funding (Old Peachtree) on a nationwide basis in the market for acquiring structured

settlement payment rights, lottery payment streams, and annuities. Peachtree Settlement Funding,

LLC (New Peachtree) was formed in July 2011. Upon information and belief, a majority of the

assets of Old Peachtree have been transferred to New Peachtree, which has essentially taken over the

business operations of Old Peachtree. Upon information and belief, New Peachtree is staffed by

current and former employees of J.G. Wentworth, and is directed and controlled on a day-to-day

basis by JGWPT, J.G. Wentworth, JLL Partners, and David Miller. Upon information and belief,

New Peachtree was formed to avoid creditors of Old Peachtree. These entities are collectively


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transferred over to J.G. Wentworth.

13. On or about 2006, an employee of Rapid Settlements, Ltd. n/k/a Liquidating

Marketing, Ltd. (Rapid or Liquidating Marketing) unlawfully obtained the database of

customers then being used by Rapid. Since the theft of this database was discovered, JGWPT-

controlled entities, including Old Peachtree, New Peachtree, and J.G. Wentworth, have

misappropriated and improperly used the customer database for their own benefit and to the

detriment of the owners of the customer database and RSL Funding, which currently uses the

database in its business operations.

14. JGWPT and the entities controlled by JGWPT, including Old Peachtree, New

Peachtree, and J.G. Wentworth, have been and continue to be engaged in operations that violate the

SSPAs by offering enticements, bribes and improper gratuities to potential sellers of structured

settlement payment rights without disclosing the existence of these enticements and gratuities to the

courts that are assigned to approve these transactions. Such should lead to the reconsideration of the

$7 billion in claimed SSPA transfers done by Old Peachtree, J.G. Wentworth and by their

predecessors which are void ab initio on account of false disclosures provided to the courts.

15. In addition, Counter-Defendants have been filing pleadings with courts throughout

the United States blacking out and redacting information on the prospective transferors of structured

settlement payment rights. The SSPAs uniformly provide that the proposed purchase and sale

documents be filed with the courts. This public airing of the contract enables competitors to make

competitive offers for the benefit of the customer seeking to sell his or her structured settlement

payment rights, lottery payment stream, or annuity. Instead, Counter-Defendants redact or black out

information on their customers to undermine and prevent one of the objectives of the SSPAs in an


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effort to block competitors from offering a fair price for what Counter-Defendants believes is within

their exclusive dominion or control. Two recent examples of such redacted court filings are attached

hereto as Exhibit A. Such conduct should void the hundreds of millions of transactions done on

such basis by these companies.

16. On November 18, 2009, Old Peachtree recovered a judgment against Rapid in the

113th District Court of Harris County, Texas in cause number 2006-2336A styled Settlement

Funding, LLC d/b/a Peachtree Settlement Funding v. Rapid Settlements, Ltd. Rapid appealed that

judgment to the Fourteenth Court of Appeals, which recently reversed that judgment and remanded

to the trial court for further proceedings. See Exhibit B. Rapid did not post a supersedeas bond,

having wound down its affairs in late 2008; Rapid also changed its name with the Texas Secretary of

State to Liquidating Marketing, Ltd. to reflect its limited and reducing scope of ongoing activities.

17. On January 19, 2010, at the offices of RSL Funding (5051 Westheimer, Suite 1875),

Houston, Harris County, Texas, Old Peachtree served a writ of execution against Rapid. In the

process of attempting to execute the writ, Old Peachtree and its counsel wrongfully seized and

removed assets owned by entities other than Rapid. The assets seized by Old Peachtree are not

assets owned by, leased by, or used by Rapid.

18. The property wrongfully removed by Old Peachtree consisted of office equipment

and furniture that was, at the time of the execution of the writ, used by RSL Funding in its business

operations. The seized property included, but was not limited to, computers, hard drives, monitors,

customer information, printers, fax machines, telephones, wall hangings/pictures, desks, chairs,

tables, air conditioners, a refrigerator, trash cans, documents and other property. Essentially all of

the property necessary for RSL Fundings operations was seized. Old Peachtree even removed


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obvious personal effects of RSL Fundings employees, the ownership of which Old Peachtree and its

counsel were advised of in advance of their taking. Old Peachtree proceeded to engage in the theft

of such property nonetheless and despite the objections of RSL Funding. RSL Funding lost the use

of the computers, office files, furniture, and other property that was wrongfully seized by Old

Peachtree, resulting in disruption of RSL Fundings business for months. Upon information and

belief, the items wrongfully seized have found their way into the custody, possession, or control of

New Peachtree, J.G. Wentworth, JGWPT, and David Miller, all of whom deliberately and without

legal basis continue to exercise dominion and control over this stolen equipment and documents,

despite demand having been made for the return of the wrongfully seized property. These companies

have acted in combination, concert, and conspiracy and continue to conspire to deprive RSL

Funding of the benefit of the use of said property.

19. As noted, RSL Funding was a fierce competitor of Old Peachtree, and is now a fierce

competitor of New Peachtree, as well as of J.G. Wentworth, in the secondary market of purchasing

long term financial instruments. Although Old Peachtree has a judgment against Rapid (but not for

any monetary damages or attorneys fees), Old Peachtree wrongfully used the Rapid writ of

execution to disrupt the business operations of its competitor, RSL Funding.

20. Old Peachtree wrongfully seized computers that contain trade secrets and confidential

and proprietary information to which Old Peachtree, a direct competitor of RSL Funding, had

absolutely no right to access, review, or copy, much less to convert and over which to exercise

dominion and control, to the detriment of RSL Funding. Additionally, other confidential and

proprietary information was removed by Old Peachtree, including pending customer information on

work in progress. The offices of RSL Funding were essentially ransacked during the execution of


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the writ.

21. Old Peachtree and its counsel were repeatedly informed orally and in writing

throughout the day of January 19, 2010 -- even prior to the property being removed from the

premises -- that the assets located at 5051 Westheimer, Suite 1875 being executed upon and

removed from the premises did not belong to Rapid. Nevertheless, Old Peachtree continued to seize

assets without regard to their ownership and removed same from the building, disrupting RSL

Fundings staff and business operations.

22. At approximately 10:30 a.m. on January 19, 2010, before the execution upon the

assets had begun, Old Peachtree and its counsel were provided Rapids balance sheet of December

31, 2009 reflecting that no tangible assets are owned by Rapid. Despite receiving written notices

that Suite 1875 did not contain assets owned by Rapid, Old Peachtree continued to wrongfully seize

and remove the property from Suite 1875 that RSL Funding was using to conduct its business

operations. These communications, made directly to Peachtrees on-site counsel, gave both Old

Peachtree and its counsel sufficient grounds to halt the execution. Unfortunately, despite these

warnings, Old Peachtree wrongfully executed on the property and significantly disrupted the

business of RSL Funding, Old Peachtrees competitor.

23. Old Peachtree and its counsel by their own admission failed to conduct any post-

judgment discovery whatsoever to determine what assets, if any, were owned by Rapid before

undertaking the seizure of and exercising dominion and control over the property located in Suite

1875. Counter-Defendants took no steps to ascertain the ownership of the property removed from

Suite 1875.

24. Old Peachtree failed to conduct any meaningful investigation to determine if the


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agreement, and Parenti signed a new transfer agreement with RSL Funding. Rather than try to make

a competitive counter-offer for Parentis benefit, Old Peachtree responded by requesting and

obtaining a temporary injunction against RSL Funding.

27. On August 24, 2010, the former presiding judge of this Court signed Old Peachtrees

proposed order and granted a worldwide temporary injunction against RSL Funding and Liquidating

Marketing. A copy of the Courts order is attached as Exhibit C. Under the guise of enjoining RSL

Funding and Liquidating Marketing from interfer[ing] with [Old] Peachtrees contracts, Old

Peachtrees proposed order (signed by the Court) took the unprecedented step of limiting a partys

access to open public records by ordering as follows: RSL [and Liquidating Marketing] and/or

[their] agents shall not search court filings to find structured settlement agreements with [Old]

Peachtree that are pending approval and shall not approach any of [Old] Peachtrees existing

customers or enter into any agreements with them. See Exhibit C. RSL Funding was thus enjoined

from any interaction with Old Peachtrees customers anywhere in the world, even if those customers

initiated contact with RSL Funding seeking a better offer than that made by Old Peachtree. Since

the worldwide temporary injunction was entered, RSL Funding has been forced to stand by while

Old Peachtree offered customers as much as $50,000 less for structured settlements. RSL Funding

was effectively enjoined from competing with Old Peachtree anywhere in the world. The effect of

the Courts actions was to protect a factoring company competitor, rather than protecting the payee,

the intended beneficiary under the SSPA. As a result, Old Peachtree was enriched to the extent of

hundreds of thousands of dollars, and consumers were similarly disadvantaged. Despite this

inequity, the bond ordered by the Court remained at $500, which is the amount that Old Peachtree

had already posted. As a direct result of that injunction, Old Peachtree was free to enter into a new


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transaction with Parenti, which was approved on November 19, 2010.

28. In contrast, and by way of example, over the last few weeks alone, RSL Funding

offered more than $25,000 more to a JGWPT customer, which that customer was thrilled to receive.

The customer was lured to JGWPT with their expensive advertising and whipped between New

Peachtree and J.G. Wentworth, with their common ownership hidden from the customer, so that the

customer believed the meager offers from these companies were in fact arms length competitive

quotes. Upon information and belief, potential customers are lured into JGWPT entities with offers

of LCD TVs, vacations, home theater equipment, and cash awards, some examples of which are

attached as Exhibit D. None of these offers were disclosed to the courts assigned to approve

potential transfers of structured settlement payment rights, in contravention of the SSPAs, which

require all consideration being provided to be shown to the court.

29. RSL Funding and Liquidating Marketing appealed the Courts grant of a temporary

injunction to Old Peachtree. On January 10, 2012, the Fourteenth Court of Appeals concluded that

the temporary injunction entered against RSL Funding and Liquidating Marketing is overbroad, and

that court reversed the temporary injunction and remanded the matter to the trial court for further

proceedings. The Opinion and Judgment of the Fourteenth Court of Appeals are attached as Exhibit

B. The court of appeals concluded that the temporary injunction constituted an unreasonable

restraint on trade. See Exhibit B, at p. 15. The court of appeals also entered judgment requiring Old

Peachtree to pay all costs incurred in the appeal. See id.

30. In addition to reversing the temporary injunction, the Fourteenth Court of Appeals

also reversed the award of attorneys fees in connection with the dispute between Old Peachtree and

Liquidating Marketing relating to Simmie King, and remanded that matter to this Court for a new


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trial on attorneys fees. See Exhibit B. On March 22, 2012, the Court of Appeals issued its

mandates. See Exhibit E. Thus, at this time Old Peachtree does not have a monetary judgment

against Liquidating Marketing, and both RSL Funding and Liquidating Marketing have valid

judgments against Old Peachtree.

31. On information and belief, in order to evade these judgments and other likely

judgments for its improper acts, Old Peachtree has transferred its assets to New Peachtree and

JGWPT and/or other third parties in an effort to avoid its obligations. Old Peachtrees actions

constitute fraudulent transfers under Texas and applicable law.

32. In addition, Old Peachtree, New Peachtree, and J.G. Wentworth have been operated

as shams to perpetrate fraud. Old Peachtree was undercapitalized and failed to meet its obligations.

J.G. Wentworth was undercapitalized and filed bankruptcy because it could not meet its financial

obligations. Old Peachtree, New Peachtree, and J.G. Wentworth are nothing but corporate shells,

whose conduct otherwise justifies the Courts piercing the corporate veils of Old Peachtree, New

Peachtree, J.G. Wentworth, JGWPT and JLL Partners. Upon information and belief, the shams were

orchestrated by David Miller, the CEO of J.G. Wentworth and the CEO of JGWPT, who has written

to RSL Funding falsely claiming rights under Old Peachtrees contracts with its former employees

and New Peachtrees contracts with Old Peachtrees employees. Old Peachtree, New Peachtree, J.G.

Wentworth, JGWPT and JLL Partners should be treated as one and the same. Those entities have

shared employees, shared technology, a shared office location, and they have operated in unison to

unlawfully dominate the relevant market and to violate the SSPAs throughout the country.

33. Unfazed that the Fourteenth Court of Appeals reversed the temporary injunction

against RSL Funding and Liquidating Marketing, Counter-Defendants filed another application for


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temporary and permanent injunction which is similarly overbroad and seeks the same illegal restraint

that was struck down and reversed. For purposes of this litigation, given that Old Peachtree has

wound down or ceased operations in actively purchasing structured settlement payment rights,

lottery payment streams, and annuities, there is no basis for an injunction in favor of Old Peachtree.

Additionally, given that Rapid has wound down or ceased its operations, there is no basis for an

injunction against Rapid. And unless New Peachtree or J.G. Wentworth demonstrates evidence

affecting their operations, there is no basis for an injunction in their favor either.

REQUEST FORDECLARATORY RELIEF

34. An actual and justiciable controversy exists between RSL Funding and Counter-

Defendants regarding RSL Fundings legal right to offer to purchase an annuitants structured

settlement payment rights for more money and at a better rate than was offered by Counter-

Defendants, that it is in the best interest of annuitants under the structured settlement protection acts

to receive and consider RSL Fundings offers to purchase structured settlement payment rights for

more money than its competitors, and RSL Funding has legal justification in contacting annuitants

for the purpose of offering them more money and better rates to purchase their structured settlement

payment rights. An actual and justiciable controversy exists as to the rights of the parties with

respect to who has right, title, and interest in the contractual assignment of certain future structured

settlement payment rights. RSL Funding is entitled to declaratory relief under the Texas Uniform

Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE ANN. 37.001, et seq. Therefore, RSL

Funding seeks a declaratory judgment pursuant to TEX. CIV. PRAC. & REM. CODE ANN. 37.001, et

seq. as follows:

a. That RSL Funding, LLC has a legal right prior to the entry of a final court order oftransfer approving another factoring companys agreement to offer to purchase an


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annuitants structured settlement payment rights for more money than was offered bya competitor, including but not limited to Settlement Funding, LLC and PeachtreeSettlement Funding, LLC;

b. That it is in the best interest of annuitants to receive and at least be able to consider

RSL Funding, LLCs offers to purchase structured settlement payment rights formore money and at better interest rates than offered by a competitor, including butnot limited to Settlement Funding, LLC and Peachtree Settlement Funding, LLC;

c. That RSL Funding, LLC has legal justification in contacting Michale Parenti and allother annuitants for the purpose of offering them more money and better terms towhich the annuitants may sell their structured settlement payment rights;

d. That any transfer right, encumbrance on the future payments, or enforceable contractrelated thereto, with a customer is subject to court approval, and before such courtapproval the factoring company can have no enforceable right related to the contract;

e. That RSL Funding, LLC is entitled, by way of example, to receive the assignedpayments from customers such as Michale Parenti, and other customers wishing tosell their future payments, subject to court approval of RSL Funding, LLCsapplication for approval of a transfer of structured settlement payment rights, andthat RSL Fundings competitors, including but not limited to Settlement Funding,LLC and Peachtree Settlement Funding, LLC, have no right, title, or interest in acustomers assigned payments until a transfer is court approved;

f. That it is an unreasonable restraint on trade to prohibit RSL Funding, LLC andLiquidating Marketing, Ltd. f/k/a Rapid Settlements, Ltd. from contacting or

interacting with any of Settlement Funding, LLCs or Peachtree Settlement FundingLLCs customers regarding the purchase and sale of particular future payments untila court has entered an order of transfer with respect to the payments at issue;

g. That RSL Funding is not now and has never been a debtor of Settlement Funding,LLC or Peachtree Settlement Funding, LLC; and that RSL Funding has nevertransferred or conveyed any property to avoid an obligation or debt owed toSettlement Funding, LLC or Peachtree Settlement Funding, LLC;

h. That RSL Funding, LLC is a separate and distinct company from, and actsindependently of, Liquidating Marketing, Ltd., and the organizational separateness

has never ceased to exist;

i. That RSL Funding is not indebted to any person for whom Settlement Funding, LLCor Peachtree Settlement Funding, LLC can then attempt to hold members of RSLFunding liable; and that RSL Funding and its members are not liable for thepurported debt of Liquidating Marketing;


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j. That any gifts or gratuities given to potential customers as an inducement to enterinto a transfer agreement must be disclosed on an SSPA disclosure statement and thatthe failure to disclose such information is a violation of the SSPA and renders thetransfer void ab initio; and

k. That Settlement Funding, LLC, Peachtree Settlement Funding, LLC, and J.G.Wentworth have violated the SSPA by intentionally blacking out or redactinginformation of prospective transferors of structured settlement payment rights indocuments filed the courts, which undermines the ability of a competing factoringcompany from contacting such person with a more competitive (higher) offer fortheir future payments.

35. Additionally, RSL Funding is entitled to its reasonable attorneys fees under the

Texas Uniform Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE ANN. 37.001, et seq.

THEFT OF PROPERTY

36. RSL Funding realleges and incorporates by reference paragraphs 1 through 35 above

as if set forth in full herein.

37. RSL Funding has a possessory right to the property seized by Old Peachtree in the

writ of execution. Specifically, Old Peachtree unlawfully appropriated the property to which RSL

Funding had the right to use for its benefit in the ongoing operation of its business. Old Peachtree

misappropriated the property with the intent to deprive RSL Funding of the use of the property.

Therefore, RSL Funding sustained damages resulting from the conduct of Old Peachtree.

38. RSL Funding has a possessory right to the customer database misappropriated and

wrongfully used by Counter-Defendants. Counter-Defendants misappropriated the property with

the intent to deprive RSL Funding of its right to use the database for its benefit in the ongoing

operation of its business. Therefore, RSL Funding sustained damages resulting from the conduct of

Counter-Defendants.

39. Additionally, given that no monetary judgment exists, RSL Funding seeks a turnover


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of the database misappropriated by Counter-Defendants and the property wrongfully seized by Old

Peachtree and the immediate return of all misappropriated goods to the owners.

CONVERSION



41. RSL Funding had a possessory right to the property wrongfully seized by Old

Peachtree in executing the writ. Counter-Defendants wrongfully exercised dominion and control

over the property in an unlawful and unauthorized manner, to the exclusion of and inconsistent with

RSL Fundings rights to the use of that property. Old Peachtree has improperly converted the

property by seizing under a writ of execution intended for Rapid assets owned by others and to be

used by RSL Funding. Old Peachtree ignored demands for return of the property. As a result of the

foregoing conversion, RSL Funding has sustained damages in an amount in excess of the minimum

jurisdictional limits of this court, for which it herein sues.

42. RSL Funding had a possessory right to the database misappropriated and wrongfully

used by Counter-Defendants. Counter-Defendants have wrongfully exercised dominion and control

over the property in an unlawful and unauthorized manner, to the exclusion of and inconsistent with

RSL Fundings rights to the use of that property. As a result of the foregoing conversion, RSL

Funding has sustained damages in an amount in excess of the minimum jurisdictional limits of this

court, for which it herein sues.

FRAUDULENT TRANSFER




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44. After RSL Funding filed its original counterclaim, New Peachtree was added as a

party to this lawsuit. In order to avoid the existing judgments against Old Peachtree and the

likelihood of a judgment for these improper acts, New Peachtree, J.G. Wentworth, and JGWPT

and/or other third parties have received transfers of assets, accounts, databases, and other property

directly or indirectly from Old Peachtree. The transfers were in exchange for little or no equivalent

value.

45. The transfers constitute fraudulent transfers under Texas or other applicable law.

PIERCING THE CORPORATE VEIL/ALTER EGO



47. Old Peachtree, New Peachtree, J.G. Wentworth, JGWPT, and JLL Partners have been

operated as shams to perpetuate a fraud. Specifically, Old Peachtree is the alter ego of New

Peachtree, which assumed and does business using the name Peachtree or derivations of the same

or similar names. Moreover, both Old Peachtree and New Peachtree are mere alter egos of JGWPT,

which owns and controls Old Peachtree, New Peachtree, and J.G. Wentworth, as well as other

entities used to perpetrate a nationwide scheme to evade the SSPAs with the achieved objective of

gouging customers with high prices and discounts, and preventing competition in the marketplace.

48. The Court should ignore the form of Old Peachtree, New Peachtree, J.G. Wentworth,

and JGWPT, finding their true owners, interest holders, partners and members as responsible for the

conduct of Old Peachtree, New Peachtree, J.G. Wentworth, and JGWPT under alternative theories of

alter ego, veil piercing, and other equitable claims and remedies. As such, RSL Funding asks

the Court to hold New Peachtree, JGWPT, and JLL Partners responsible for Old Peachtrees


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misconduct and, as may be appropriate, find the owners, interest holders, partners and members of

New Peachtree, J. G. Wentworth, JGWPT and JLL Partners responsible for New Peachtrees

misconduct.

CIVIL CONSPIRACY



50. Old Peachtree, New Peachtree, J.G. Wentworth, and JGWPT have acted in concert,

combination, and conspiracy to artificially depress offers to customers for the purchase of structured

settlement payment rights, lottery payment streams, and annuities from annuitants in the secondary

market. Additionally, Old Peachtree, New Peachtree, J.G. Wentworth, and JGWPT, individually, or

acting through their agents and representatives and subsidiaries and affiliates, have entered into

unlawful and improper agreements with other members of the National Association of Settlement

Purchasers (NASP), the trade association of factoring companies, not to solicit other members

deals and not to make competitive bids to customers who have signed contracts with another

member of NASP. RSL Funding is not part of this alliance, declining to engage in what it believes

is anti-competitive conduct in restraint of trade. RSL Funding is one of the few companies that is

willing to make competitive offers to annuitants who have tentatively decided to sell their structured

settlement payment rights. This industry-wide agreement to depress the market of offers for

purchase of structured settlement payment rights is anti-competitive, unlawful, and is directly at

odds with the underlying purpose of the SSPA. As a result of the foregoing conspiracy, all of which,

upon information and belief were orchestrated by and/or continued by David Miller, RSL Funding

has sustained damages in an amount in excess of the minimum jurisdictional limits of this court, for


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which it herein sues.

WRONGFUL INJUNCTION



52. The temporary injunction sought by Old Peachtree against RSL Funding and

Liquidating Marketing was designed to eliminate competition. The temporary injunction previously

issued against RSL Funding and Liquidating Marketing permitted Old Peachtree to impose

outrageous rates given that the terms of the temporary injunction order prohibited RSL Funding

from making competitive offers for structured settlement payments to individuals such as Michale

Parenti. Thus, once Old Peachtree signed up a customer, the customer was stuck with Old Peachtree,

even though, but for the restraints placed on it by the temporary injunction order, RSL Funding

would have offered the customer a better financial arrangement (i.e., more money) for his or her

structured settlement. In doing so, RSL Funding was deprived of significant business.

53. The injunctive relief that was obtained by Old Peachtree against RSL Funding was

wrongful in its inception. Old Peachtree prosecuted its claims against RSL Funding and sought the

injunction maliciously and without probable cause, and it did so by using the court system to

eliminate competition from RSL Funding in the market. Moreover, the injunctive relief now sought

by Old Peachtree and New Peachtree against RSL Funding is wrongful in its inception and is sought

maliciously and without probable cause, and they have done so by using the court system to

eliminate competition from RSL Funding in the market.

54. RSL Funding will show that as a direct and proximate result of the wrongful issuance

of the temporary injunction above described, RSL Funding sustained damages for which Old


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Peachtree and its sureties are liable.

55. Additionally, RSL Funding alleges malicious prosecution based on the wrongful

issuance of an injunction. Old Peachtree and New Peachtree have instituted and continued a civil

proceeding against RSL Funding. Old Peachtree commenced and prosecuted its application for

temporary injunction with malice, and without probable cause for the proceeding. Similarly, Old

Peachtree and New Peachtree have commenced and prosecuted their application for temporary

injunction with malice, and without probable cause for the proceeding. As a direct and proximate

result of the wrongful issuance of the temporary injunction above described, RSL Funding sustained

financial losses for which Old Peachtree is liable. More specifically, the temporary injunction

caused RSL Funding to lose profits on the transactions from which it was restrained from making

better offers to annuitants for their structured settlements. RSL Funding has suffered special

damages.

CONDITIONS PRECEDENT

56. All conditions precedent have been performed or have occurred.

JURY DEMAND

57. RSL Funding hereby demands a trial by Jury.

WHEREFORE, PREMISES CONSIDERED, Counter-Plaintiff RSL Funding, LLC prays

that upon final trial hereon, it have and recover a final declaratory judgment ascertaining the rights,

title, and interests of the parties as set forth herein; that it have and recover a final judgment

awarding actual, consequential, incidental, and special damages jointly and severally against

Settlement Funding, LLC, Peachtree Settlement Funding, LLC, J. G. Wentworth S.S.C. Limited

Partnership, JGWPT Holdings, JJL Partners, and David Miller; that it recover reasonable,


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necessary, equitable and just attorneys fees, costs of court and all other taxable or recoverable

expenses; that it recover prejudgment and post-judgment interest at the maximum lawful rates; and

all other relief, both at law and in equity, to which RSL Funding may be entitled.

Respectfully submitted,

/s/ Michael ChoykeMichael ChoykeState Bar No. 00793504WRIGHT & CLOSE, LLPThree Riverway, Suite 600Houston, Texas 77056Telephone: (713) 572-4321

Facsimile: (713) [email protected]

Attorneys for RSL Funding, LLC


22/22

22

CERTIFICATE OF SERVICE

The undersigned certifies that a copy of the foregoing instrument was served upon the

attorneys of record for in accordance with Rule 21a, Texas Rules of Civil Procedure, on this 27th

day of March, 2012.

L. Bradley HancockChristopher JohnsenGREENBERG TRAURIG1000 Louisiana, Suite 1800Houston, TX 77002

John R. CraddockE. John Gorman

The Feldman Law Firm LLPTwo Post Oak Central1980 Post Oak Blvd., Ste. 1900

Houston, Texas 77056

/s/ Michael ChoykeMichael Choyke

rsl funding llcs first amended counterclaim - march 27, 2012

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