ENGLEWOOD CLIFFS, N.J., Jan. 4, 2012 (GLOBE NEWSWIRE) -- ASTA
FUNDING, INC., (Nasdaq:ASFI), (the "Company"), a
financial services, receivable asset management and
liquidation company that specializes in the purchase,
management and liquidation of consumer receivables is pleased
to announce the formation of Pegasus Funding, LLC
("Pegasus"), a joint venture with Manhattan-based
Pegasus Legal Funding, LLC ("PLF"), an established
personal injury financing provider.
On December 28, 2011, the Company, through a newly-formed
subsidiary, ASFI Pegasus Holdings, LLC ("APH"),
executed the Pegasus Operating Agreement with PLF, in which a
subsidiary of the Company, Fund Pegasus, LLC, ("Fund
Pegasus"), will loan up to $21.8 million per year to PLF
for a term of five (5) years all of which is secured by the
assets of Pegasus. These loans will provide financing for the
personal injury litigation claims and operating expenses of
Pegasus.
Pegasus will be actively managed by experienced personal
injury litigation funders, Max Alperovich and Alexander
Khanas, who will rely upon strict underwriting criteria to
provide legal funding to personal injury plaintiffs prior to
the settlement of their claims or their resolution in court.
The Pegasus business model entails the outlay of non-recourse
advances to a plaintiff with an agreed-upon fee structure to
be repaid from the plaintiff's recovery. Typically such
advances to a plaintiff approximate 10-20% of the anticipated
recovery. These funds are generally used by the plaintiff for
a variety of urgent necessities, ranging from surgical
procedures to everyday living expenses.
Pegasus's profits and losses will be distributed at 80%
to APH and 20% to PLF. These distributions will be made only
after the repayment of Fund Pegasus' principal amount
loaned, plus an amount equal to overhead advances calculated
at 9% of principal for each case settled. While the ove-ar ll
returns to the joint venture are currently estimated to be in
excess of 20% per annum, APH reserves the right to terminate
Pegasus if returns to APH, for any rolling twelve (12) month
period, after the first year of operations do not exceed
15%.
As of today, the Company has advanced approximately $4
million in personal injury financing, along with the
advancement of
$360,000 for overhead expenses. These loans have been assumed
directly by Pegasus and the proceeds thereof assigned by the
Company to Fund Pegasus.
Gary Stern, Chairman, President and CEO of the Company
commented, "We are very excited about our financial
commitment to this joint venture, and in particular, about
the future prospects of the personal injury financing space.
During these past 3 years, the dearth of attractive consumer
credit card receivable portfolios has given management the
firm initiative to proactively seek profitable alternative
asset classes for investment. For the past 2 plus years, we
have deliberately and carefully scrutinized the personal
injury financing business, and many of the respected firms
which populate its ranks. After considerable due diligence,
we elected to enter this market by way of a joint venture
with PLF and its experienced and talented management team.
Our relatively sizable cash resources, will allow us to
continue to look into other asset classes, as a complement to
our traditional business model of acquiring distressed
receivable portfolios. This new investment in personal injury
financing, along with our new credit facility with Bank Leumi
gives us the flexibility to utilize internal resources and
external financing for future growth. We believe the business
of personal injury financing offers growth potential for us
and we will continue to explore other asset classes to
achieve this goal."
Based in Englewood Cliffs, NJ, Asta Funding, Inc ., is a leading consumer
receivable asset management company that specializes in the
purchase, management and liquidation of performing and
non-performing consumer and other receivables. For additional
information, please visit our website a h t ttp://www.astafunding.com.
The Asta Funding, Inc. logo is available at http://www.globenewswire.com/newsroom/prs/?pkgid=8464
Important Information about Forward-Looking Statements: All
statements in this new release other than statements of
historica facts, including without limitation, statements
regarding our future financial position, business strategy,
budgets, projected revenues, projected costs, and plans and
objective of management for future operations, are
forward-looking statements within the meaning of the Private
Securities Litigation Reform Act of 1995. Forwar-dlooking
statements generally can be identified by the use of
forward-looking terminology such as "may,"
"will," "expects," "intends,"
"plans," "projects,"
"estimates," "anticipates,"
or "believes" or the negative thereof, or any
variation thereon, or similar terminology or expressions. We
have based these forward-looking statements on our current
expectations and projections about future events. These
forwar-dlooking statements
are not guarantees and are subject to known and unknown
risks, uncertainties and assumptions about us that may cause
our actual results, levels of activity, performance or
achievements to be materially different from any future
results, levels of activity, performance or achievements
expressed or implied by such forward-looking statements.
Important factors which could materially affect our results
and our future performance include, without limitation,
potential regulation or limitation of interest rates and
other fees advanced by Pegasus under federal and/or state
regulation, a change in statutory or case law which limits or
restricts the ability of Pegasus to charge or collect fees
and interest at anticipated levels, plaintiff 's being
unsuccessful in whole or in part in the litigation upon which
our funds are provided, the continued services of Max
Alperovich and Alexander Khanas to source and analyze cases
in accordance with the underwriting guidelines of Pegasus,
our ability to purchase defaulted consumer receivables at
appropriate prices, changes in government regulations that
affect our ability to collect sufficient amounts on our
defaulted consumer receivables, our ability to employ and
retain qualified employees, changes in the credit or capital
markets, changes in interest rates, deterioration in economic
conditions, negative press regarding the debt collection
industry which may have a negative impact on a debtor's
willingness to pay the debt we acquire, and statements of
assumption underlying any of the foregoing, as well as other
factors set forth under "Item 1A. Risk Factors" in
our annual repo on Form 10-K for the year ended September 30,
2011 and other filings with the SEC. All subsequent written
and oral forwar-d looking statements attributable to us, or
persons acting on our behalf, are expressly qualified in
their entirety by the
foregoing. Except as required by law, we assume no duty to
update or revise any forwar-dlooking statements.
CONTACT: Robert J. Michel, CFO Asta Funding, Inc. (201) 567-5648
Source: Asta Funding, Inc.
News Provided by Acquire Media
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