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NEW CASE LAWS

The NEW CASE LAWS outlined below strongly defend our position and make us extremely excited share your fight against MCA funders!

  • Fleetwood v. RAM Capital, LLC. This decision is from June 6th, 2022 where the Federal Court, on a summary judgment motion, found that the MCA agreements are criminally usurious loans, that the contracts are unenforceable, and that the funding companies themselves fall under RICO.
  • Lateral Recovery v. Queen Funding Dated July 20th, 2022. In this case, the MCA funders attempted to do a motion to dismiss plaintiff’s complaint. The court did a significant analysis of the characterization of the MCA agreements. The court denied the motion of the MCA funders to dismiss. The Court also found that the RICO action, wire fraud, criminal usurious agreements all survived, and the case is currently pending. Counsel expects a summary judgment motion to be filed forthcoming by plaintiffs in early 2023.
  • GMI GROUP, INC., Debtor. GMI Group, Inc., Plaint iff , v. Unique Funding Solutions, LLC Defendant In this case, the Federal Bankruptcy Judge in Atlanta, GA also found the MCA agreements illegal and unenforceable. The Bankruptcy Court spent considerable time outlining in its written decision the predatory practices of the MCA funders, the terrible behavior of the MCA funders, and the criminal nature of the MCA contracts.
  • The Federal Trade Commission Furthermore, because the MCA agreements utilize UCC liens, the Federal Trade Commission agency (hereafter referred to as the “FTC”) started investigating MCA companies in June 2020. Please see complaint filed by the FTC with the Federal District Court for the Southern District of New York outlining the significant issues: • misrepresentations regarding financing products • unfair use of confession of judgments • unfair collection threats • unauthorized withdrawals
  • New York Attorney General Actions The New York Attorney General has been investigating the Merchant Cash Advance industry since the COVID19 pandemic. The New York Attorney General’s office has concluded that the MCA agreements are unenforceable, are criminally usurious, and have been executed with predatory practices. Please see sample of New York Attorney General complaint filed with the Federal Southern District Court of New York Lindner & Lindner, P.C. mcainfo @ lindnerfirm .com v2023.02.13 Patriot Court 205 Floral Vale Boulevard Yardley, PA 19067 (888) 818-2018 FAX: (215) 579-8570 page 2 of 4 which significantly outlines the criminal conduct, unethical conduct, and abusive nature of the MCA agreements.
  • Hi Bar Capital LLC v Parkway Dental Servs., LLC Dated August 25th, 2022, a New York State Supreme Court case before Honorable Leon Ruchelsman. This case is an example of how the new case law interpretation is being utilized. On March 5th, 2022, Judge Ruchelsman granted in favor of the MCA funders. In that decision, the court stated that these were not loans. The court used a technical procedural mechanism allowing the case to be re-argued where the Court has reversed its position. The Court vacated the default judgment on the grounds that the MCA agreements were usurious loans. The Court did a detailed analysis and identified four reasons why Merchant Cash Agreements are a sham. The Court ruled in its opinion that the three-digit interest rate per annum could be criminally usurious and therefore, repayment obligation would be deemed uncollectible under New York law.
  • Lateral Recovery LLC v Capital Merchant Services LLC Under this case, the Federal Court evaluated three different MCA contracts. The Court found one contract was criminally usurious on its face. The Court determined the second contract needed more discovery but appeared to be criminally void. However, the Court found the third contract as a legal agreement and a valid cash advance. Therefore, this case demonstrates even more clearly why the Secretary of State should not automatically accept UCC-1 lien filings based on MCA agreements.
  • Haymount Urgent Care PC v. GoFund Advance, LLC This case is a class-action lawsuit where the RICO actions and fraud actions have survived to trial from a motion to dismiss.