On Wednesday January 22nd The New York Attorney General's office announced a settlement from a lawsuit previously filed in March of 2024 against Yellowstone Capital and their subsidiaries for exploiting small business owners with their Merchant Cash Advance businesses. According to the NYAG's press release, "The settlement includes a $1.065 billion judgment against Yellowstone, with over $534 million of that paid by canceling all outstanding debts owed by small businesses, including over 1,100 across New York state and over 18,000 nationwide."
The team at Beacon has broken down the lawsuit and shared some of the implications.
By Thomas Tramaglini, Chief Operations Officer
Partner, The Center for MCA Research
In a sweeping announcement on Wednesday, the New York Attorney General's Office announced a settlement which helps small business owners who were taken advantage of by Yellowstone Capital and its subsidiaries. The NYAG also stated that their lawsuit will continue to go after Delta Bridge Funding and Cloudfund, as well as eight individuals will continue.
If you received a small business owner who was part of the lawsuit settled by "Yellowstone or its companies for making illegal high-interest loans to small businesses disguised as merchant cash advance (MCA) transactions" the NYAG has set up this site to help you remove your judgement and file a claim.
According to the press release:
"Under the settlement announced today, the Yellowstone entities are canceling all amounts owed by merchants, totaling $534,552,724, and together with Stern and Reece, have made an immediate $16.1 million payment toward the remaining $514 million judgment that will be distributed to impacted small businesses. This cash payment will be increased to $30 million if they fail to comply with the terms of the settlement. The Yellowstone entities are required to cease all attempts to collect on balances owed by businesses they lent to, discontinue pending actions to enforce them, vacate unsatisfied court judgments, and terminate some liens on small businesses’ property. The companies and the officers will also be permanently banned from the merchant cash advance industry. The $1.065 billion total judgment is the largest consumer settlement obtained by OAG, excluding multistate settlements.
Impacted small businesses that have a court judgment or pending lien against them from Yellowstone that they would like vacated will receive information by mail on how to make these requests, which must be made within the next six months. Business owners with questions about the settlement can find more information on OAG’s website.
This settlement is the latest example of Attorney General James taking action to protect small businesses from fraud. In February 2024, Attorney General James secured a court judgment of more than $77 million against Richmond Capital Group, Jonathan Braun, and their affiliates and principals who were harming small businesses through phony merchant cash advances that were actually high-interest loans. In April 2023, Attorney General James shut down two websites that impersonated the New York State Department of State and significantly overcharged aspiring small business owners and users for services provided for free from state government. Also in April 2023, Attorney General James released a guide to help businesses adopt effective data security measures to better protect New Yorkers’ personal information."
This settlement applies only to Yellowstone MCAs. This includes Yellowstone and its 25 subsidiaries:
Yellowstone Capital LLC
ABC Merchant Solutions LLC
Advance Merchant Services LLC
Business Advance Team LLC
Capital Advance Services LLC
Capital Merchant Services, LLC
Cash Village Funding LLC
Fast Cash Advance LLC
Fundry LLC
Fundzio LLC
Green Capital Funding LLC
HFH Merchant Services LLC
High Speed Capital LLC
Merchant Capital Pay LLC
Merchant Funding Services LLC
Midnight Advance Capital LLC
Mr. Advance Capital LLC
Ocean 1213 LLC
Simply Equities LLC
TVT Cap Fund LLC
TVT Capital HR LLC
Thryve Capital Funding LLC
WCM Funding LLC
West Coast Business Capital LLC (formerly known as Yellowstone Capital West)
World Global Capital LLC
Dr. Thomas Tramaglini is the Director of Operations and Negotiation for Beacon Client Solutions, a company that supports small businesses on a host of fronts, especially MCA debt. Thomas has been a small business owner for many years, as well as held leadership positions in several organizations and companies. Thomas holds a B.A. in History, as well as Masters and Doctorates in Organizational Leadership from Rutgers University, The State University of New Jersey.
Disclaimer: Beacon Client Solutions is not an accountancy, or a law firm. We are business consultants. While Beacon works with outstanding attorneys and accountants, we cannot and do not provide legal or tax advice. All of our work is connected to those who are legally certified to give such advice. Beacon does have a longstanding body of work in MCA resolution and understands what small business owners deal with, specific to MCA. Beacon Client Solutions serves clients in all 50 states, Puerto Rico, Mexico, and Canada.
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