LexShares Case #1098: The 31-Payment Settlement
A medical finance fraud case settled quickly — then took 2.5 years to pay out in installments
The Numbers
| Invested | $30,000 |
| Returned | $50,703 |
| Net Profit | $20,703 |
| MOIC | 1.69x |
| IRR | 65% |
| Holding Period | 1,061 days |
| Payments Received | 31 |
The Case
A Florida investor spent seven years building a relationship with a specialty finance company in the medical lien receivables industry. Starting in 2009, he made 39 cash advances totaling $13.5 million — his retirement savings, his daughters’ money, everything.
The defendants allegedly:
- Promised consistent returns while providing no accounting or financial records
- Sent quarterly email updates claiming the business was “performing extremely well”
- Deferred interest payments or automatically reinvested them as new principal
- Made personal guarantees they never honored
- By December 2016, ceased all communications and refused to repay anything
The plaintiff, an elderly investor who had trusted these defendants for years, filed suit seeking to recover $20 million+ in unpaid principal, interest, and profits.
Timeline
| Date | Event |
|---|---|
| Oct 2019 | Lawsuit filed in Florida State Court |
| Feb 21, 2020 | My investment — $30,000 |
| Mar 2020 | Discovery begins; defendant requests mediation |
| May 2020 | Settled at mediation — 3 months after funding |
| Aug 2020 | First installment payment received |
| Jan 2021 | Principal paid off (payment #6) |
| Jan 2023 | Final payment (#31) — $12 |
Why It Worked
Speed to settlement. The defendant requested mediation almost immediately after LexShares funding arrived. Within 3 months of my investment, the case had settled. That’s unusually fast.
Clear paper trail. Seven years of emails, quarterly updates, and written personal guarantees. The defendants couldn’t credibly deny the loans existed or their promises to repay.
Sympathetic plaintiff. An elderly investor who lost his entire retirement savings, his defined benefit plan, and money set aside for his daughters. This plays well in front of a Florida jury.
Defendant had assets. Medical lien finance companies handle real receivables. Unlike judgment-proof defendants, there was something to collect from.
The Unusual Structure: 31 Installment Payments
Most litigation settlements pay in one lump sum. This one paid out over 2.5 years in 31 separate installments:
| Phase | Payments | Amount |
|---|---|---|
| Initial (Aug 2020) | 1 | $15,657 |
| Monthly ~$1,026 (Sep-Dec 2020) | 4 | $4,104 |
| Principal payoff (Jan 2021) | 1 | $10,252 |
| Monthly ~$862 (Feb 2021-Dec 2022) | 24 | $20,688 |
| Final cleanup (Jan 2023) | 1 | $12 |
| Total | 31 | $50,703 |
Why installments? The defendants likely didn’t have liquid assets to pay a lump sum. An installment plan ensured some recovery rather than chasing an uncollectible judgment.
Collection risk was real. Each payment could have defaulted. The fact that all 31 arrived — including that final $12 — was not guaranteed.
Return Breakdown
| Item | Amount |
|---|---|
| LexShares funding | $1,130,000 |
| Bridge loan fees & broker costs | ($63,000) |
| My investment | $30,000 |
| My share of fees | ($2,727) |
| Ownership % | 2.41% |
| Total distributions received | $50,703 |
What I Learned
Quick settlements happen. The defendant requested mediation within weeks of funding. Sometimes cases resolve faster than expected — this one took just 3 months from investment to settlement.
Installment plans extend duration. The case “settled” in May 2020, but I didn’t receive my final payment until January 2023. My IRR calculation uses 188 days (to first distribution), but capital was tied up for nearly 3 years.
Collection risk persists post-settlement. A settlement agreement is just paper. The defendant still has to pay. Each of those 31 installments could have defaulted.
Elderly plaintiffs with clear documentation win. A retiree who lost everything to fraud, with seven years of emails and written guarantees, is a sympathetic case. Defendants settle to avoid a jury seeing that.
Medical finance companies have assets. Unlike some defendants who are judgment-proof, companies that handle medical receivables have real money flowing through. That makes collection more likely.
This was my 16th LexShares investment. The case settled in record time, but the 31-payment installment plan meant I watched money trickle in for nearly 3 years. Every check that arrived was a reminder that collection risk doesn’t end at settlement.
