Judge: Douglas W. Stern, Case: 23STCP02749, Date: 2023-08-31 Tentative Ruling

Case Number: 23STCP02749    Hearing Date: August 31, 2023    Dept: 68

This Petition asks the Court to approve the transfer by E.A. of his right to receive $12,000 per month (increasing 3% per year) for 15 years, commencing August 19, 2032.  In exchange for transferring this income stream, E.A. shall be paid $25,000.  The Agreement reveals that the total of that income stream is $2,678,243.76, with a discounted present value of $1,244,525.79.

E.A. is 45 years old, employed in his own venture, and married with two children.  E.A. and his wife have a present income that places them squarely in the middle class.  There are no identified exigent circumstances revealed that justify the “need” to exchange an asset with a present value of $1.2 million for an immediate $25,000 payment.

E.A. has been the beneficiary of a number of other structured income agreements that would have paid him very substantial ongoing amounts.  One example involved a September 2016 transaction where E.A. sold his right to receive monthly payments of $40,000 (increasing 3% a year) from June 19, 2023 through July 19, 2027.  He would have received $480,000 a year for 4 years.  He received $250,000 for that income stream which over time totals $1,920,000.  (That amount has to be discounted to present value as the transaction was done in 2016, with no payments for 7 years, although it also increased 3% each year.)

[The interest he sold in 2016 would have been paying E.A. $40,000 at this precise time.  He now seeks to sell his $1.2 million asset for about 2.5 weeks of income had he been receiving that $40,000 per month income stream.]

He now apparently finds himself desiring funds so that he has concluded that for a payment of $25,000, he shall transfer an asset with a present value worth $1.2 million.

The Court requires further explanation to justify the transaction.