• Lifetime Security
• FORGE is Proud to Offer 9/11 Pro Bono Structured Settlements
• Forge Consulting LLC announces national launch and its new Georgia office

Lifetime Security

Published on September 27, 2003
Author: DAVID ROBINSON - News Business Reporter
The Buffalo News Inc.

It's one thing to win a big settlement in a lawsuit. It's a whole other matter to manage that money the right way to make it last.

That's why there's a growing trend in legal circles to use structured settlements with sizable lawsuit payouts. Instead of a lump sum payment, the settlement can be arranged to provide regular income for the victims for 20 years or more. The advantage for injury victims or other lawsuit victors is that the structured settlement give them greater long-term financial security by assuring them a stream of income for many years.

That helps ease one of the main risks of lump sum settlements: That the victim spends or invests the money unwisely and blows through their nest egg in a matter of years, leaving them with continued medical expenses or other costs, without a steady source of income.

"Instead of getting $1 million in cash, they're getting lifetime security," said John T. Bair, the president of Forge Consulting, a Buffalo structured settlement company that opened earlier this year.

They also get a major tax break. Under the current law, passed 20 years ago to give beneficiaries who won big payouts after being severely injured or disabled a big incentive to use structured settlements to guarantee them a long-term source of income, the payments are free from federal and state taxes.

The settlements can be structured any number of ways, from simply providing a steady stream of income, to giving the victim a portion of the award as a lump sum and putting the rest toward a structured settlement, or arranging it so larger sums are available at certain points in the future, such as when a child's college tuition bills will come due. Most settlements are invested in annuities.

"A structured settlement can tie into your life in ways that no lump sum can," said Randy Dyer, executive vice president of the National Structured Settlements Trade Association in Washington, D.C.

Structured settlements also have gained popularity as a less expensive way for insurance companies to settle lawsuits, since $1 million paid out as a stream of income over 20 years is less costly than $1 million paid out in a lump sum.

"What a structured settlement does is allow greater flexibility," Dyer said. "It bridges that gap (during settlement negotiations) between offer and demand."

As a result, more settlements are being made as structured settlements, with about $6 billion in annuity premiums written on the annuities issued as part of structured settlements last year, the trade group said.

While Bair said structured settlements can make sense for any award of more than $10,000 -- and for any payout involving a child -- the option becomes more common. A 1997 survey by the Insurance Services Office found that structured settlements were used by nearly 30 percent of all claims of $1 million or more, but less than 7 percent of the time on losses of $75,000 to $99,000.

Bair, a West Point graduate and former Army helicopter pilot, started out in the structured settlement business at the suggestion of a friend's father and opened the Buffalo office of a national settlement firm four years ago.

Bair, who grew up in Oregon and came to Buffalo after marrying Amy Foschio, the daughter of U.S. Magistrate Leslie G. Foschio, then founded Forge with three other partners, including Howard T. Saperston III, earlier this year.

Forge, which now has 15 employees and is based at 737 Main St., gets about half of its clients from court cases in Western New York, but the company also has offices manned by other partners in Georgia and Mississippi to expand the firm's reach. The firm also has an office in Oakville, Ont.

The key to getting business is establishing relationships with lawyers, which is why Forge is active in legal trade groups and organizations.

That approach also helps the company gain exposure in national legal circles while keeping its base in Buffalo.

Bair said Forge, which mostly works with injury victims, ideally prefers to get involved in a case in the early stages, even when it's far from certain that a case will produce a substantial damage award. The firm typically receives a 4 percent fee.

"We're the settlement adviser and lay out the choices for them so they can make a good choice," he said.

"It's about taking these people through a life planning event," Bair said. "You try to coach them into something that is going to serve them well."

A bill signed into law earlier this week by Gov. George Pataki allows structured settlement firms to waive their commissions on agreements crafted for the families of victims from the Sept. 11 terrorist attacks. More than 50 consultants, including Forge, have agreed to handle 9/11 settlement cases for free, Bair said.

"This is not about sales," he said. "It's about doing what's right."

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FORGE is Proud to Offer 9/11 Pro Bono Structured Settlements

New York State Bill A07356 was recently signed into law by Governor George E. Pataki. Forge Consulting started a pro bono campaign within the structured settlement industry championing this legislation.

The legislation permits brokers and consultants to waive their commission or other fees for structured settlement awards resulting in additional compensation to individuals or relatives of individuals who were killed or physically injured as a result of 9-11. The bill also allows these individuals to contribute the waived amounts to charitable organizations.

Structured awards for victims of 9-11 will help affected individuals put their lives back together by planning their financial futures based on lifestyles and needs, including college education for their children. Settlements (which are not restricted to claims associated with the Victims Compensation Fund) are secure, low-risk, long-term investments with an important difference -- the interest from a structure is tax-free.

Are you interested in a structured payout? Procedures and deadlines you'll need to be aware of:

If you are interested in a structured payout, you must notify the US Department of Justice www.usdoj.gov/victimcompensation in writing before they issue a substantially complete letter. It is imperative that you advise the Fund of the following before you receive a substantially complete letter:

1. the fact that you are interested in a structured payout
2. who is going to get the structured payout and the percentage of the net award
3. life insurance carrier and assignment company that will be used to fund the structured payout, and
4. description of the payment stream (duration and interval: monthly, quarterly, annually for x years) to the designated beneficiary(s).

If you have already received a substantially complete letter, please notify the Justice Department immediately if you are still interested in a structured payment option.

Please note that your election for a structured payout is irrevocable. However, the Fund retains the right to decline to make structured payouts. In which case, the award will be paid in a lump sum.

How Do You Determine if the Structured Payout Option is Right For You?

Statistics indicate that nearly 90 percent of all lump-sum awards — regardless of their size — are completely exhausted within five years. As a result, the long-term security advantages of a customized structure annuity over a lump sum payment cannot be overstated. With the average 9-11 recovery estimated at $1.8 million, the average one-time commission that will be waived (applied to the victim or family member's premium or contributed to charity by the annuity company) is projected at $40,000 per award. In addition, the victim/family member will save as estimated $300,000 over a 30-year period by working with a pro bono structured settlement consultant as opposed to a fee-based financial advisor.

Forge Consulting can help you to determine what percentage of the award to place into a structured settlement, at no cost to you. We work closely with top-rated, financially secure life insurers. Let Forge Consulting assist you with a strategic life planning analysis that addresses your long-term medical, household or college tuition needs, including adjustments for inflation. Contact Forge Consulting today, 877-683-0259.

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Forge Consulting LLC announces its national launch and its new Georgia office

Originally Published in The Hartwell Sun
Hartwell, Hart County, Georgia

Forge Consulting LLC announces its national launch and its new Georgia office.

H.H. Spooner Phillips IV and Charles T. Schell, two of the company's three principal owners, established the new company in January 2003.

Forge Consulting is the first new national plaintiff's firm in the structured settlement industry in more than a decade.

The company's mission is to bring the tax benefits of periodic payments to a wide range of clients including personal injury victims, wrongful death claims, workers compensation cases and participants in mergers and acquisitions. Attorneys can also structure their fees on settlements.

Both Phillips and Schell have been proponents of structured settlements. Brokers were brought in predominantly by the defendant rather than the plaintiff, thus stacking the deck in favor of the defendant.

In a move to change the status quo, they teamed with Forge's CEO John T. Bair, with the goal of putting power back into the hands of plaintiffs.

With agency licenses in all 50 states, Forge ensures that their clients receive the best possible settlement, individually structured to meet their particular financial needs. Working pro bono, Forge has led the way to structured settlements for the victims of the Sept. 11 attacks.

In little more than eight months, Forge Consulting has grown to a 15-member company.

As active supporters of Trial Lawyer Associations nationwide, Forge is a partner in advocacy of the Trial Bar and the only structured settlement company in the U.S. to be designated a board member of the Robert L. Habush ATLA endowment.

Spooner Phillips, a graduate of Rutgers University, where he played varsity football, most recently worked with Moreland Altobelli Associates, a regional consulting company.

During his eight years with MA, Phillips provided innovative financial management solutions to both private and government sectors.

His areas of expertise include complex project management, innovative financing, capital investment strategies, and environmental impact avoidance and remediation.

He lives in Hartwell with his wife, Denise, and their two children. Spooner's younger brother Cory Phillips, an assistant coach with the University of Georgia football team, also works with Forge promoting its services.

Charles Schell is a graduate of North Georgia Military College and has won national awards and presidential citations for his problem-solving and negotiating skills.

He served as a military pilot for nine years primarily flying the AH-64 Apache. His last active duty post was as the Senior Operations Officer for 1-11th Aviation Regiment, a 400 man unit with 18 facilities in three different states.

Schell's service did not end when he left active duty; he is politically active in the ongoing fight for a citizen's constitutional right to an unrestricted trial by a jury of peers.

He is a HYDRA board member and was recently selected for promotion to major in the U.S. Army Reserves. He lives in Hartwell with his wife, Kelli, and their two children.

The company is headquartered in Buffalo, N.Y. , with offices in Georgia, Mississippi and Canada.

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