Litigation finance deals aren’t “loans” under New Jersey law, saving the industry from claims that 33% interest on plaintiff cash infusions violate lending regulations.
The big issue sprang from a small case—a traffic accident in which a plaintiff received $9,600 over three contracts from Covered Bridge Capital as she pursued crash damages. After paying back roughly $7,000 to Covered Bridge and discharging the rest in bankruptcy, the plaintiff sued the company claiming the deals she entered violated state lending and consumer protection laws.
The New Jersey Superior Court Appellate Division leaned on federal precedent to reject her arguments in a ...
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