Merrill Lynch Sued in Class Action for Failure to Make Structured Settlement Payments to Injured Individuals in Personal Injury Cases.
Foley & Bezek, a Southern California law firm with a practice specializing in class actions, has filed a class action lawsuit in California against Merrill Lynch and its subsidiary Merrill Lynch Settlement Services for alleged failure to make timely payments to individuals who settled personal injury cases and agreed to accept periodic payments from Merrill Lynch Settlement Services utilizing “structured settlements.”
A structured settlement agreement is an agreement between an individual injured in a personal injury lawsuit who agrees to settle his or her lawsuit with the defendant who caused the injury, and accept a series of payments over time to be paid by Merrill Lynch Settlement Services, a subsidiary of Merrill Lynch. By utilizing a “structured settlement” through Merrill Lynch Settlement Services, the payments to the injured individual are tax free.
Merrill Lynch, through its settlement services subsidiary, Merrill Lynch Settlement Services, assumed full responsibility for these payments to the injured individuals. To accomplish this, Merrill Lynch Settlement Services purchased U.S. Treasury Bonds which it placed in trust and agreed to use the income from the bonds to make the agreed upon payments to the injured individuals. Subsequently, Merrill Lynch sold its ownership in its settlement services’ subsidiary to a third party. The third party pledged the treasury bonds to Morgan Stanley as collateral for a loan to the third party. When the third party defaulted on the loans, Morgan Stanley foreclosed on the treasury bonds to repay its loan to the third party.
Now, over 100 individuals, many of whom were disabled by their injuries, have not received the payments that Merrill Lynch Settlement Services promised to make.
In April of 2000, Merrill Lynch, without admitting liability, agreed to pay $16,900,000 in full settlement of all claims against it in the class action lawsuit. In June of 2000, Morgan Stanley, without admitting liability, agreed to pay $23,000,000 in full settlement of all claims against it. The litigation continues against Bear, Stearns & Co., Bankers Trust Company, Bank of America, Wells Fargo Bank, U.S. Trust Company and the remaining defendents.
Any inquiries concerning the Merrill Lynch class action should be directed to Foley & Bezek, LLP at (805) 962-9495. A copy of the complaint can be sent via facsimile or E-mail.