Now that LM Funding is going public, taking their debt collection circus on the road, it’s important to understand just what their business model is as articulated in their prospectus filed as part of going public, in addition to understanding the serious allegations that are raised against LM Funding, particular as those allegations are raised in lawsuits filed in federal courts. This blog posts puts some of those pleadings and lawsuits in one place. It should be noted that the lawsuits are merely allegations, but carefully considering those allegations is very important.
I first came across LM Funding and the Business Law Group when a client of mine was sued for an homeowner’s association foreclosure dispute. When we peeled back the layers….and after we took depositions of the board members of my client’s homeowner’s association, it turns out that the homeowner’s association former president did not actually want to pursue a foreclosure against my client. In fact, the former president of the association, (the homeowner’s association was the Plaintiff in the lawsuit) said that my client was a good guy that was trying to do the right thing and that they did not want him to be sued. The very curious and frankly problematic thing was that even though they, the plaintiff said this, the named plaintiff was the homeowner’s association.
I’ve got the depositions and I’ve got the pleadings and what the alleged plaintiff (remember the party that was adverse to my client?) had to say about the real party that was pushing the litigation was very, very problematic.
The thing that most people…even the lawyers who are pursuing these very serious lawsuits…don’t really understand is the problem with representing to a court that a homeowner’s association has assigned the right to sue one of its own members to another entity entirely….More on that later, read the latest story from the Tampa Times:
The firm — which buys the rights to collect delinquent homeowners association dues — is under attack in two lawsuits accusing it of illegal practices.
One suit, filed by a Miami condo association, alleges that LM Funding concocted a “criminally usurious lending scheme” that targeted struggling community associations.
The other suit, by a company that buys distressed assets, accuses LM Funding and its CEO, Tampa attorney Bruce Rodgers, of demanding payment of fees to which they are not entitled.
Both lawsuits seek status as class actions, a move that could vastly expand the number of plaintiffs trying to collect from LM Funding.
Rodgers on Friday called the claims “baseless and without merit.”
“All of the things they are alleging we do are on behalf of community associations comprised of ordinary citizens that have to pay more if these lawsuits succeed,” he said. “We really are defending the little people here.”
Here are those lawsuits:
Complaint for Avoidance of Fraudulent Transfer