Disability Law

Wentworth and Peachtree to Merge

By S2KM Limited

The owners of J.G. Wentworth and Peachtree Settlement Funding, the two largest purchasers of structured settlement payment rights, have agreed to merge the two companies according to a March 10, 2011 article published by "The Deal Pipeline".

According to the Deal Pipeline article:

• The merger of the two private-backed businesses will be structured as a stock swap.
• JLL Partners, J.G. Wentworth's current stockholders, will own most of the combined companies;
• The parties are still in talks to line up financing.
• The deal may not close for several weeks.
• DLJ Merchant Banking Partners, owned by Credit Swisse AG, purchased Peach Holdings (parent of Peachtree Settlement Funding) for $775 million in November 2006 with co-investments from LLR Partners Inc. and Greenhill Capital Partners.

The announced merger highlights a remarkable financial turnaround for J.G. Wentworth:

• On June 1, 2009, J.G. Wentworth and two affiliated companies entered Chapter 11 bankruptcy protection after the company "encountered liquidity problems amid a tightening credit market".
• Standard & Poor's Rating Services had earlier announced, at J.G. Wentworth's request, that it would no longer rate J.G. Wentworth's counterparty credit and senior secured debt.
• During this period, J.G. Wentworth laid off 120 of its 200 employees and closed its office in Las Vegas.
• According to industry sources at that time, Wentworth's $325 million of general corporate bonds were "almost worthless" and were trading, if at all, for pennies on the dollar.
• Less than six months later, J.G. Wentworth emerged from bankruptcy with an announcement that JLL Partners had invested an additional $100 million in the firm.

For S2KM's complete historic reporting about J.G. Wentworth, see this S2KM blog link.

Full post as published by Beyond Structured Settlements on March 14, 2011 (boomark / email).