The class action lawsuit that has been filed in federal court against LM Funding and Business Law Group contains very serious allegations….and the claims are being brought by very powerful lawyers who know the ins and outs of consumer law and class actions.
Read here here the outline then scroll below for the full complaint:
33. BLG was previously owned by Bruce Rodgers (“Rodgers”).
34. Rodgers’s wife, Carollinn Gould, founded LMF in January, 2008.
35. BLG and LMF share office space and common expenses.
36. LMF became a wholly-owned subsidiary of a newly formed publicly-traded
corporation, LM Funding America, Inc. LM Funding America, Inc. filed a Form S-1 and
multiple amendments (the “Form S-1 “), which provides substantial detail about the business
model, ownership and profitability ofLMF.
3 7. Rodgers is Chairman of the Board and CEO of LM Funding America, Inc.
38. From its inception through June, 2015, LMF has purchased receivables relating to
approximately 11,000 units across nearly 500 Associations.
39. Pursuant to the Purchase Agreement, the Association authorizes LMF to retain
6. LMF is a specialty financing company that buys or otherwise assumes delinquent
receivable accounts from condominium associations and homeowners’ associations. A
delinquent account occurs when an owner within an association fails to pay the monthly
assessments required for association membership. In exchange for funding each of its
association clients, LMF receives an assignment of the proceeds of the delinquent receivable,
which includes the right to retain BLG to collect the receivable.
7. LMF, through its affiliated collection entity BLG, earns most of its revenue by
recovering the interest, late charges, and fees on the outstanding assessments, rather than the
outstanding assessments themselves.
8. When an association property is sold after a foreclosure, the Florida Statutes
define a purchaser’s liability to an association for the debts ofthe previous owner.
9. Despite the clarity of the relevant statutes, Defendants customarily demand sums
in excess of a purchaser’s statutory liability.
I 0. Defendants’ practice is illegal and results in Defendants being unjustly enriched at
the expense of purchasers like Plaintiff.
11. The Plaintiff Class seeks to enjoin Defendants’ illegal practice and the Plaintiff
Subclass seeks to recover damages sustained as a result of the illegal practice.