Stones Thrown in the MCA Industry
In a recent Debanked article, Sean Murray writes of a settlement between multiple high-volume debt settlement companies and two financial institutions, Yellowstone Capital and Everest Business Funding, in the amount of $500,000.00 to resolve an ongoing lawsuit. According to the settlement agreement, Corporate Bailout and Protection Legal Group may "no longer offer any services to Yellowstone or Everest merchants in the future."
In the original complaint, the plaintiff's counsel posited the defendants would deliberately instruct their clients to default upon their merchant cash advances (MCA) in order to settle and pay an inflated fee to debt relief companies. While debt relief services themselves are not inherently illegal or unethical, the practice of "coaching a merchant" or client to purposely evade obligation in lieu of hardship can and likely will be considered as "tortious interference."
Yellowstone CEO Isaac Stern contested the above practice exploits the trust between a client and lender, compromising the value of long-term rapport in the process. Though exceptions through difficult circumstances are expected, the unethical actions of few can pollute the industry irreparably.
If you are an individual or corporation in need of legal assistance or advisory, considering booking a free consultation with Arnold & Smith Law, PLLC.