CCI has handled thousands of cases with settlements of every type and size. But what makes us truly different is our creative approach, which enables us to create solutions that are agreeable to all parties. Below are a few stories that demonstrate the effectiveness of our methodology.*
*Actual names are only used if we have permission to do so in writing. Otherwise names are redacted or fictitious to protect confidentiality.
Wrongful Conviction / Wrongful Incarceration / Physical Injury Cases
Plaintiff v. City, County and State.
Plaintiff was wrongfully accused, convicted and imprisoned for 25 years. During his incarceration plaintiff suffered nearly daily beatings, physical abuse and several stabbings. Following exoneration based on DNA evidence, recanted testimony of prosecution witnesses and newly discovered exculpatory evidence, plaintiff sued for damages.
Plaintiff’s counsel contacted CCI to assist in the settlement process and to create a structure that would protect the plaintiff’s income. Our goal was to underwrite a settlement annuity compliant with I.R.C. sections 104(a)(2) and 130.
Plaintiff’s attorneys, acting on the advice of the CCI Team, insisted on a structured settlement as a condition of settlement, with Creative Capital as the broker of record. During negotiations, the CCI Team worked with plaintiff and counsel by illustrating future periodic payment plans combined with an up-front sum to be managed by a financial professional.
The result? An eight-figure settlement. The team, led by CCI, locked in a tailor-made, future periodic payment plan, funded with settlement annuities underwritten by four major life insurers.
During the “document negotiations”, CCI’s General Counsel strategized with plaintiff’s attorneys and often interacted independently on their behalf with defense counsel to achieve a tax compliant and legal set of documents. As we do in all cases, CCI worked until conclusion, including the delivery of the annuity contracts.
UPDATE: Additionally, since the passage of IRC 139F tax free payouts can be designed which pay wrongfully convicted plaintiff's for the time spent in prison.
Structured Attorney’s Fee
Plaintiff’s counsel sought to defer taxation on a portion of his fee. As part of the negotiations with defendant, they agreed on future periodic payments of one-half of the fee that would have been otherwise payable in full at the time of settlement.
In so doing, plaintiff’s counsel not only deferred taxation until the years of actual receipt, but also enhanced his fee since the annuity provided a greater return than the amount of the deferred portion of the fee.
Many attorney clients of CCI have chosen to have their fees paid over a fixed period of years PLUS for their lifetime thereafter. This is a popular retirement planning tool as well as an excellent tax planning vehicle.
Non-Physical Injury Cases
Equal Employment Opportunity Commission v. Utility Company
The Equal Employment Opportunity Commission (EEOC) brought this employment discrimination case against a utility company. The EEOC represented 136 plaintiffs alleging discrimination.
The EEOC rejected the utility company’s multimillion-dollar settlement offer as insufficient. The utility company didn’t want to spend more in settlement, so the case was heading to trial when CCI began work.
Our approach included splitting the sum that the company offered, half of which was provided in up-front cash. Then we designed a formula based on age, salary and years to retirement for the balance of the money and also offered enhanced retirement benefits to the plaintiffs.
This satisfied all parties because the plaintiffs got what they wanted, and the utility company didn’t exceed their original offer.
Physician v. Life Company and U.S. Government
It began when a life company refused to pay medical payments to a plan doctor for alleged fraud. Then the federal government learned of the allegations and suspended Medicare payments to the physician. Next, the local press published the accusations. It turns out that a simple life company clerical error was the culprit: no fraud had taken place.
This simple error had ruined the doctor’s practice. He sued. The physician rejected an eight-figure cash settlement because of AMT rules under which he would not get a deduction for attorneys' fees or expenses.
Taking interest in the case, a local congressman proposed a private bill to make this settlement tax free, but it did not pass. So CCI worked out and proposed a structure that would pay the physician over time, putting him below the AMT threshold each year. Because of this, he was able to accept the settlement and net millions of dollars after taxes without any additional cost to the defendants.