Settlement company files for Chapter 11

A  Delaware Valley company known for its sometimes humorous TV advertising of  lump sum payments  for  insurance settlement  checks is looking for a settlement  of its own.

J.G. Wentworth  announced that three of its non-operating parent holding company level affiliates – JGW Holdco, LLC, J.G. Wentworth LLC, and J.G. Wentworth, Inc., -- have filed  reorganization plan under Chapter 11 of the U. S. Bankruptcy Code in U. S. Bankruptcy Court, Wilmington.

Wentworth has been affected by turmoil in the financial markets that makes it difficult to  finance the conversion of  insurance  settlements from traffic accidents, annuities  and other events from monthly checks  to lump sum payments.

The filing is what is known as a prepackaged Chapter 11 that has most creditors signing on to a debt restructuring deal.

Over 90% of the term lenders approved the plan that will allow the company to substantially reduce its debt load at the parent holding company level while providing the enterprise with $100 million of new equity to support ongoing operations. Its operating units will continue to conduct business without interruption during the reorganization process, which is expected to be completed within 30 days.

J.G. Wentworth’s decision to file for Chapter 11 followed  a eview of alternatives to address pressures from extremely challenging capital markets and high borrowing costs, and was unanimously approved by the company’s board of directors.

David Miller, Chief Executive Officer, said, "J.G. Wentworth serves a very important market niche, and we have successfully provided liquidity to tens of thousands of customers over the years. However, we have recently faced significant challenges due to the well-published disruption of the ABS market. After careful review, we made the decision to restructure the business through a Chapter 11 filing so that we can strengthen our balance sheet and be better positioned for the future. I am excited by the potential at J.G. Wentworth and believe that by taking the appropriate actions now, this business will move forward effectively. A strengthened J.G. Wentworth will offer customers more options as they seek cash for their illiquid assets, with the same great service they’ve come to expect.”

Since only senior term debt at the parent holding company level is being affected and DIP financing has been contracted for, customers completing a transaction with J.G. Wentworth will not be impacted by the filing, he said.

Since 1992, J.G. Wentworth has purchased over $3 billion of future payment obligations from consumers and is also the nation’s largest securitizer of structured settlement and annuity backed notes.

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