In what is shaping up to be a significant transfer of assets from Merck to the legal community, both defense and plaintiff attorneys I might add, the recent Vioxx settlement is touching off a mad scramble among banks, investment firms, legal lenders and others interested in invested those funds.
I've already seen press releases from legal finance firms offering bridge loans and financing at preferred rates to trial lawyers with large Vioxx case inventories, a flood of articles and solicitations by structured settlement firms for attorneys to structure their fees as well as traditional banks and brokers angling for the tax planning and investment windfall.
However, as Lee Corso of ESPN College football often says, " Not so fast my friend!".
If you take a look at the actual numbers and what the dynamics have been of this case it is pretty obvious the big money in the investment community is going to be made by legal finance companies who will advance fund the attorneys who stand to make big pay days on their inventory of cases, but might have to wait anywhere from 6 months to a year or longer for those funds to actually get paid. I don't think most people realize just how far into this case a lot of firms are financially and many are hanging on by their finger nails.
While it would make incredible sense for most trial lawyers in Vioxx to structure their legal fees and spread the tax hit out over several years, the reality is that most need the money now, tax consequences be damned. Other then a relatively small group of attorneys at the top levels of this litigation who stand to make considerable money the majority of firms around the country will be happy to collect their funds, in advance from a legal finance firm, and be rid of this litigation disaster that threatened the viability of many of their firms.
However, if you are one of the attorneys who is interested in structuring your legal fee, you absolutely must get with a qualified structured settlement brokers soon to begin mapping out a plan of action for your fee structure. There are sure to be a lot of dynamics at work here, among them attempts by banks and brokers to retain control of the assets as well as efforts by various structured settlement firms to control who writes the annuities. There is a long way to go in this case and as such you need to start gathering information now and making plans.
If you are a financial professional awaiting an investment windfall you better be working with some of the select guys at the top or I'm afraid you will be staring at a rather small net amount once this all gets paid out and disbursed.