CAUSE NO. 2006-23366 EVELYN E.

FRANKLIN, SIMMIE BERNARD KING, SETTLEMENT FUNDING, LLC and PEACHTREE SETTLEMENT FUNDING, LLC vs. RAPID SETTLEMENTS, LTD., RAPID MANAGEMENT CORP., RSL FUNDING, LLC, and STEWART A. FELDMAN vs. SETTLEMENT FUNDING, LLC, PEACHTREE SETTLEMENT FUNDING, LLC, J.G. WENTWORTH S.S.C. LIMITED PARTNERSHIP, JGWPT HOLDINGS, LLC, JLL PARTNERS, INC., and DAVID MILLER

Filed 12 March 27 P1:07 Chris Daniel - District Clerk Harris County ED101J016798324 By: daunshae n. willrich

IN THE DISTRICT COURT

OF HARRIS COUNTY, TEXAS

113TH JUDICIAL DISTRICT

RSL FUNDING, LLCS FIRST AMENDED COUNTERCLAIM Defendant/Counter-Plaintiff RSL FUNDING, LLC files this First Amended Counterclaim, and in support thereof would respectfully show the Court the following: DISCOVERY CONTROL PLAN 1. Level 2 discovery controls this counterclaim. PARTIES 2. Defendant/Counter-Plaintiff RSL Funding, LLC (RSL Funding) is a Texas limited

liability company with its principal place of business in Houston, Harris County, Texas. 3. Plaintiff/Counter-Defendant Settlement Funding, LLC is a Florida limited liability

company and has appeared herein.

4.

Plaintiff/Counter-Defendant Peachtree Settlement Funding, LLC is a Nevada limited

liability company and has appeared herein. 5. Counter-Defendant J. G. Wentworth S.S.C. Limited Partnership (J.G. Wentworth)

is a Nevada limited partnership organized and existing under the laws of the state of Nevada, with its principal place of business located at 40 Morris Avenue, Bryn Mawr, Pennsylvania, 19010. At all times material to this action, J.G. Wentworth was engaged in business in the state of Texas, and as more particularly described below, but does not maintain a regular place of business in the state of Texas and has not designated an agent for service of process in Texas. Accordingly, J.G. Wentworth may be served with process by serving the Secretary of State of Texas, 1019 Brazos Street, Austin, Texas 78701. 6. Counter-Defendant JGWPT Holdings, LLC (JGWPT) is a Delaware limited

liability company and maintains its principal place of business at 201 King of Prussia Road, Radnor, Pennsylvania 19087, and has designated National Registered Agents, Inc., Dover, Delaware 19904 as its registered agent, but does not maintain a regular place of business in the state of Texas and has not designated an agent for service of process in Texas. Accordingly, JGWPT may be served with process by serving the Secretary of State of Texas, 1019 Brazos Street, Austin, Texas 78701. 7. Counter-Defendant JLL Partners, Inc. (JLL Partners) is a Delaware corporation

which maintains its principal place of business at 450 Lexington Avenue, New York, N.Y. 100173904, and has designated The Corporation Trust Company, Corporation Trust Center, 1209 Orange Street, Wilmington, Delaware 19801 as its registered agent, but does not maintain a regular place of business in the state of Texas and has not designated an agent for service of process in Texas. Accordingly, JLL Partners may be served with process by serving the Secretary of State of Texas, 2

1019 Brazos Street, Austin, Texas 78701. 8. Counter-Defendant David Miller is a resident of the State of Pennsylvania. He may

be served with process at his usual place of business, JGWPT Holdings, LLC, 201 King of Prussia Road, Radnor, Pennsylvania 19087. JURISDICTION and VENUE 9. The Court has jurisdiction over Settlement Funding, LLC and Peachtree Settlement

Funding, LLC because they have purposefully submitted to the jurisdiction of this Court, and the acts or omissions complained of took place in Texas. The Court has jurisdiction over Settlement Funding, LLC, Peachtree Settlement Funding, LLC, and J.G. Wentworth because these defendants regularly conduct business in the State of Texas and have readily accessed the Texas state courts on numerous occasions. Additionally, the Court has jurisdiction over JGWPT, JLL Partners, and David Miller because the tortious acts complained of took place in Texas. FACTS 10. RSL Funding previously competed with Settlement Funding, LLC d/b/a Peachtree

Settlement Funding (Old Peachtree) on a nationwide basis in the market for acquiring structured settlement payment rights, lottery payment streams, and annuities. Peachtree Settlement Funding, LLC (New Peachtree) was formed in July 2011. Upon information and belief, a majority of the assets of Old Peachtree have been transferred to New Peachtree, which has essentially taken over the business operations of Old Peachtree. Upon information and belief, New Peachtree is staffed by current and former employees of J.G. Wentworth, and is directed and controlled on a day-to-day basis by JGWPT, J.G. Wentworth, JLL Partners, and David Miller. Upon information and belief, New Peachtree was formed to avoid creditors of Old Peachtree. These entities are collectively 3

engaged in a nationwide scheme to eliminate competition and artificially depress the market for customers seeking to sell structured settlement payment rights, lottery payment streams, and annuities, to the detriment of those customers. JGWPT controlled entities are believed to control upwards of 65% of the U.S. market for the purchase of structured settlement payment rights and have achieved this market penetration by evading their obligations under the Structured Settlement Protection Acts (SSPAs) of several states, including Texas. 11. JLL Partners, upon information and belief, is the parent company of JGWPT, which

along with JGWPT is orchestrating the nationwide effort to eliminate competition in the market for acquiring structured settlement payment rights, lottery payment streams, and annuities and to artificially depress the market to the detriment of potential customers in that market by evading their obligations under the SSPAs. 12. Old Peachtree, formerly based in Boynton Beach, Florida, claims to have done $1

billion in transactions. Upon information and belief, Old Peachtree is no longer actively engaged in business, and is no longer purchasing structured settlement payment rights, lottery payment streams, or annuities. Upon information and belief, after Old Peachtree was acquired in 2011 by JGWPT, the parent company of J.G. Wentworth, Old Peachtrees assets were transferred to New Peachtree and employees of J.G. Wentworth were dedicated to staff New Peachtree. Since the filing of this lawsuit, Old Peachtree was acquired and essentially ceased doing business, and is now a part of JGWPT, the holding company, along with J.G. Wentworth, with the affairs of all controlled by Miller, JGWPT and JLL Partners. Old Peachtree laid off virtually its entire work force (155 workers were fired on one days notice), including about 51 account executives who had been exclusively engaged in the purchase of structured settlements, annuities, and lotteries. A few employees 4

transferred over to J.G. Wentworth. 13. On or about 2006, an employee of Rapid Settlements, Ltd. n/k/a Liquidating

Marketing, Ltd. (Rapid or Liquidating Marketing) unlawfully obtained the database of customers then being used by Rapid. Since the theft of this database was discovered, JGWPTcontrolled entities, including Old Peachtree, New Peachtree, and J.G. Wentworth, have misappropriated and improperly used the customer database for their own benefit and to the detriment of the owners of the customer database and RSL Funding, which currently uses the database in its business operations. 14. JGWPT and the entities controlled by JGWPT, including Old Peachtree, New

Peachtree, and J.G. Wentworth, have been and continue to be engaged in operations that violate the SSPAs by offering enticements, bribes and improper gratuities to potential sellers of structured settlement payment rights without disclosing the existence of these enticements and gratuities to the courts that are assigned to approve these transactions. Such should lead to the reconsideration of the $7 billion in claimed SSPA transfers done by Old Peachtree, J.G. Wentworth and by their predecessors which are void ab initio on account of false disclosures provided to the courts. 15. In addition, Counter-Defendants have been filing pleadings with courts throughout

the United States blacking out and redacting information on the prospective transferors of structured settlement payment rights. The SSPAs uniformly provide that the proposed purchase and sale documents be filed with the courts. This public airing of the contract enables competitors to make competitive offers for the benefit of the customer seeking to sell his or her structured settlement payment rights, lottery payment stream, or annuity. Instead, Counter-Defendants redact or black out information on their customers to undermine and prevent one of the objectives of the SSPAs in an 5

effort to block competitors from offering a fair price for what Counter-Defendants believes is within their exclusive dominion or control. Two recent examples of such redacted court filings are attached hereto as Exhibit A. Such conduct should void the hundreds of millions of transactions done on such basis by these companies. 16. On November 18, 2009, Old Peachtree recovered a judgment against Rapid in the

113th District Court of Harris County, Texas in cause number 2006-2336A styled Settlement Funding, LLC d/b/a Peachtree Settlement Funding v. Rapid Settlements, Ltd. Rapid appealed that judgment to the Fourteenth Court of Appeals, which recently reversed that judgment and remanded to the trial court for further proceedings. See Exhibit B. Rapid did not post a supersedeas bond, having wound down its affairs in late 2008; Rapid also changed its name with the Texas Secretary of State to Liquidating Marketing, Ltd. to reflect its limited and reducing scope of ongoing activities. 17. On January 19, 2010, at the offices of RSL Funding (5051 Westheimer, Suite 1875),

Houston, Harris County, Texas, Old Peachtree served a writ of execution against Rapid. In the process of attempting to execute the writ, Old Peachtree and its counsel wrongfully seized and removed assets owned by entities other than Rapid. The assets seized by Old Peachtree are not assets owned by, leased by, or used by Rapid. 18. The property wrongfully removed by Old Peachtree consisted of office equipment

and furniture that was, at the time of the execution of the writ, used by RSL Funding in its business operations. The seized property included, but was not limited to, computers, hard drives, monitors, customer information, printers, fax machines, telephones, wall hangings/pictures, desks, chairs, tables, air conditioners, a refrigerator, trash cans, documents and other property. Essentially all of the property necessary for RSL Fundings operations was seized. Old Peachtree even removed 6

obvious personal effects of RSL Fundings employees, the ownership of which Old Peachtree and its counsel were advised of in advance of their taking. Old Peachtree proceeded to engage in the theft of such property nonetheless and despite the objections of RSL Funding. RSL Funding lost the use of the computers, office files, furniture, and other property that was wrongfully seized by Old Peachtree, resulting in disruption of RSL Fundings business for months. Upon information and belief, the items wrongfully seized have found their way into the custody, possession, or control of New Peachtree, J.G. Wentworth, JGWPT, and David Miller, all of whom deliberately and without legal basis continue to exercise dominion and control over this stolen equipment and documents, despite demand having been made for the return of the wrongfully seized property. These companies have acted in combination, concert, and conspiracy and continue to conspire to deprive RSL Funding of the benefit of the use of said property. 19. As noted, RSL Funding was a fierce competitor of Old Peachtree, and is now a fierce

competitor of New Peachtree, as well as of J.G. Wentworth, in the secondary market of purchasing long term financial instruments. Although Old Peachtree has a judgment against Rapid (but not for any monetary damages or attorneys fees), Old Peachtree wrongfully used the Rapid writ of execution to disrupt the business operations of its competitor, RSL Funding. 20. Old Peachtree wrongfully seized computers that contain trade secrets and confidential

and proprietary information to which Old Peachtree, a direct competitor of RSL Funding, had absolutely no right to access, review, or copy, much less to convert and over which to exercise dominion and control, to the detriment of RSL Funding. Additionally, other confidential and proprietary information was removed by Old Peachtree, including pending customer information on work in progress. The offices of RSL Funding were essentially ransacked during the execution of 7

the writ. 21. Old Peachtree and its counsel were repeatedly informed orally and in writing

throughout the day of January 19, 2010 -- even prior to the property being removed from the premises -- that the assets located at 5051 Westheimer, Suite 1875 being executed upon and removed from the premises did not belong to Rapid. Nevertheless, Old Peachtree continued to seize assets without regard to their ownership and removed same from the building, disrupting RSL Fundings staff and business operations. 22. At approximately 10:30 a.m. on January 19, 2010, before the execution upon the

assets had begun, Old Peachtree and its counsel were provided Rapids balance sheet of December 31, 2009 reflecting that no tangible assets are owned by Rapid. Despite receiving written notices that Suite 1875 did not contain assets owned by Rapid, Old Peachtree continued to wrongfully seize and remove the property from Suite 1875 that RSL Funding was using to conduct its business operations. These communications, made directly to Peachtrees on-site counsel, gave both Old Peachtree and its counsel sufficient grounds to halt the execution. Unfortunately, despite these warnings, Old Peachtree wrongfully executed on the property and significantly disrupted the business of RSL Funding, Old Peachtrees competitor. 23. Old Peachtree and its counsel by their own admission failed to conduct any post-

judgment discovery whatsoever to determine what assets, if any, were owned by Rapid before undertaking the seizure of and exercising dominion and control over the property located in Suite 1875. Counter-Defendants took no steps to ascertain the ownership of the property removed from Suite 1875. 24. Old Peachtree failed to conduct any meaningful investigation to determine if the 8

assets that Old Peachtree intended to and then did remove from the premises were subject to priority security interests of other parties as reflected in valid, pre-existing liens. A simple search of UCC filings with the Texas Secretary of States Office would have revealed the UCC Financing Statement filings on October 8, 2008, reflecting other parties priority security interest in all personal property then owned or thereafter acquired by Rapid, all in consideration of monies due to that organization by Rapid. 25. On August 13, 2010, Old Peachtree filed a First Supplemental Petition and an

Application for Temporary Restraining Order and Temporary and Permanent Injunction. Both the supplemental petition and the application for injunctive relief named RSL Funding as a defendant for the first time. In contrast to the disputes that had previously been consolidated into this lawsuit, which concerned Rapids right to enforce its arbitration agreements with three annuitants (William Maxwell, Simmie King, and Evelyn Franklin), Old Peachtrees new petition and application alleged an entirely new type of claim: that RSL Funding tortiously interfered with an existing contract between Old Peachtree and a different annuitant, Michale Parenti, for Parentis assignment of his right to structured settlement payments. 26. Parenti signed a transfer agreement purporting to transfer his right to future structured

settlement payments to Old Peachtree. As required under the Texas SSPA, Old Peachtree filed an application for approval of this transfer agreement. The statutory process provides for a public notice of the pending transfer up to twenty days before approval, during which time the customer can reconsider, receive competitive bids or move forward with the transfer. Before court approval was obtained, RSL Funding offered Parenti what he described as a substantially better financial arrangement. Accordingly, Parenti notified Old Peachtree that he no longer wished to enter into an 9

agreement, and Parenti signed a new transfer agreement with RSL Funding. Rather than try to make a competitive counter-offer for Parentis benefit, Old Peachtree responded by requesting and obtaining a temporary injunction against RSL Funding. 27. On August 24, 2010, the former presiding judge of this Court signed Old Peachtrees

proposed order and granted a worldwide temporary injunction against RSL Funding and Liquidating Marketing. A copy of the Courts order is attached as Exhibit C. Under the guise of enjoining RSL Funding and Liquidating Marketing from interfer[ing] with [Old] Peachtrees contracts, Old Peachtrees proposed order (signed by the Court) took the unprecedented step of limiting a partys access to open public records by ordering as follows: RSL [and Liquidating Marketing] and/or [their] agents shall not search court filings to find structured settlement agreements with [Old] Peachtree that are pending approval and shall not approach any of [Old] Peachtrees existing customers or enter into any agreements with them. See Exhibit C. RSL Funding was thus enjoined from any interaction with Old Peachtrees customers anywhere in the world, even if those customers initiated contact with RSL Funding seeking a better offer than that made by Old Peachtree. Since the worldwide temporary injunction was entered, RSL Funding has been forced to stand by while Old Peachtree offered customers as much as $50,000 less for structured settlements. RSL Funding was effectively enjoined from competing with Old Peachtree anywhere in the world. The effect of the Courts actions was to protect a factoring company competitor, rather than protecting the payee, the intended beneficiary under the SSPA. As a result, Old Peachtree was enriched to the extent of hundreds of thousands of dollars, and consumers were similarly disadvantaged. Despite this inequity, the bond ordered by the Court remained at $500, which is the amount that Old Peachtree had already posted. As a direct result of that injunction, Old Peachtree was free to enter into a new 10

transaction with Parenti, which was approved on November 19, 2010. 28. In contrast, and by way of example, over the last few weeks alone, RSL Funding

offered more than $25,000 more to a JGWPT customer, which that customer was thrilled to receive. The customer was lured to JGWPT with their expensive advertising and whipped between New Peachtree and J.G. Wentworth, with their common ownership hidden from the customer, so that the customer believed the meager offers from these companies were in fact arms length competitive quotes. Upon information and belief, potential customers are lured into JGWPT entities with offers of LCD TVs, vacations, home theater equipment, and cash awards, some examples of which are attached as Exhibit D. None of these offers were disclosed to the courts assigned to approve potential transfers of structured settlement payment rights, in contravention of the SSPAs, which require all consideration being provided to be shown to the court. 29. RSL Funding and Liquidating Marketing appealed the Courts grant of a temporary

injunction to Old Peachtree. On January 10, 2012, the Fourteenth Court of Appeals concluded that the temporary injunction entered against RSL Funding and Liquidating Marketing is overbroad, and that court reversed the temporary injunction and remanded the matter to the trial court for further proceedings. The Opinion and Judgment of the Fourteenth Court of Appeals are attached as Exhibit B. The court of appeals concluded that the temporary injunction constituted an unreasonable restraint on trade. See Exhibit B, at p. 15. The court of appeals also entered judgment requiring Old Peachtree to pay all costs incurred in the appeal. See id. 30. In addition to reversing the temporary injunction, the Fourteenth Court of Appeals

also reversed the award of attorneys fees in connection with the dispute between Old Peachtree and Liquidating Marketing relating to Simmie King, and remanded that matter to this Court for a new 11

trial on attorneys fees. See Exhibit B. On March 22, 2012, the Court of Appeals issued its mandates. See Exhibit E. Thus, at this time Old Peachtree does not have a monetary judgment against Liquidating Marketing, and both RSL Funding and Liquidating Marketing have valid judgments against Old Peachtree. 31. On information and belief, in order to evade these judgments and other likely

judgments for its improper acts, Old Peachtree has transferred its assets to New Peachtree and JGWPT and/or other third parties in an effort to avoid its obligations. Old Peachtrees actions constitute fraudulent transfers under Texas and applicable law. 32. In addition, Old Peachtree, New Peachtree, and J.G. Wentworth have been operated

as shams to perpetrate fraud. Old Peachtree was undercapitalized and failed to meet its obligations. J.G. Wentworth was undercapitalized and filed bankruptcy because it could not meet its financial obligations. Old Peachtree, New Peachtree, and J.G. Wentworth are nothing but corporate shells, whose conduct otherwise justifies the Courts piercing the corporate veils of Old Peachtree, New Peachtree, J.G. Wentworth, JGWPT and JLL Partners. Upon information and belief, the shams were orchestrated by David Miller, the CEO of J.G. Wentworth and the CEO of JGWPT, who has written to RSL Funding falsely claiming rights under Old Peachtrees contracts with its former employees and New Peachtrees contracts with Old Peachtrees employees. Old Peachtree, New Peachtree, J.G. Wentworth, JGWPT and JLL Partners should be treated as one and the same. Those entities have shared employees, shared technology, a shared office location, and they have operated in unison to unlawfully dominate the relevant market and to violate the SSPAs throughout the country. 33. Unfazed that the Fourteenth Court of Appeals reversed the temporary injunction

against RSL Funding and Liquidating Marketing, Counter-Defendants filed another application for 12

temporary and permanent injunction which is similarly overbroad and seeks the same illegal restraint that was struck down and reversed. For purposes of this litigation, given that Old Peachtree has wound down or ceased operations in actively purchasing structured settlement payment rights, lottery payment streams, and annuities, there is no basis for an injunction in favor of Old Peachtree. Additionally, given that Rapid has wound down or ceased its operations, there is no basis for an injunction against Rapid. And unless New Peachtree or J.G. Wentworth demonstrates evidence affecting their operations, there is no basis for an injunction in their favor either. REQUEST FOR DECLARATORY RELIEF 34. An actual and justiciable controversy exists between RSL Funding and Counter-

Defendants regarding RSL Fundings legal right to offer to purchase an annuitants structured settlement payment rights for more money and at a better rate than was offered by CounterDefendants, that it is in the best interest of annuitants under the structured settlement protection acts to receive and consider RSL Fundings offers to purchase structured settlement payment rights for more money than its competitors, and RSL Funding has legal justification in contacting annuitants for the purpose of offering them more money and better rates to purchase their structured settlement payment rights. An actual and justiciable controversy exists as to the rights of the parties with respect to who has right, title, and interest in the contractual assignment of certain future structured settlement payment rights. RSL Funding is entitled to declaratory relief under the Texas Uniform Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE ANN. 37.001, et seq. Therefore, RSL Funding seeks a declaratory judgment pursuant to TEX. CIV. PRAC. & REM. CODE ANN. 37.001, et seq. as follows: a. That RSL Funding, LLC has a legal right prior to the entry of a final court order of transfer approving another factoring companys agreement to offer to purchase an 13

annuitants structured settlement payment rights for more money than was offered by a competitor, including but not limited to Settlement Funding, LLC and Peachtree Settlement Funding, LLC; b. That it is in the best interest of annuitants to receive and at least be able to consider RSL Funding, LLCs offers to purchase structured settlement payment rights for more money and at better interest rates than offered by a competitor, including but not limited to Settlement Funding, LLC and Peachtree Settlement Funding, LLC; That RSL Funding, LLC has legal justification in contacting Michale Parenti and all other annuitants for the purpose of offering them more money and better terms to which the annuitants may sell their structured settlement payment rights; That any transfer right, encumbrance on the future payments, or enforceable contract related thereto, with a customer is subject to court approval, and before such court approval the factoring company can have no enforceable right related to the contract; That RSL Funding, LLC is entitled, by way of example, to receive the assigned payments from customers such as Michale Parenti, and other customers wishing to sell their future payments, subject to court approval of RSL Funding, LLCs application for approval of a transfer of structured settlement payment rights, and that RSL Fundings competitors, including but not limited to Settlement Funding, LLC and Peachtree Settlement Funding, LLC, have no right, title, or interest in a customers assigned payments until a transfer is court approved; That it is an unreasonable restraint on trade to prohibit RSL Funding, LLC and Liquidating Marketing, Ltd. f/k/a Rapid Settlements, Ltd. from contacting or interacting with any of Settlement Funding, LLCs or Peachtree Settlement Funding LLCs customers regarding the purchase and sale of particular future payments until a court has entered an order of transfer with respect to the payments at issue; That RSL Funding is not now and has never been a debtor of Settlement Funding, LLC or Peachtree Settlement Funding, LLC; and that RSL Funding has never transferred or conveyed any property to avoid an obligation or debt owed to Settlement Funding, LLC or Peachtree Settlement Funding, LLC; That RSL Funding, LLC is a separate and distinct company from, and acts independently of, Liquidating Marketing, Ltd., and the organizational separateness has never ceased to exist; That RSL Funding is not indebted to any person for whom Settlement Funding, LLC or Peachtree Settlement Funding, LLC can then attempt to hold members of RSL Funding liable; and that RSL Funding and its members are not liable for the purported debt of Liquidating Marketing; 14

c.

d.

e.

f.

g.

h.

i.

j.

That any gifts or gratuities given to potential customers as an inducement to enter into a transfer agreement must be disclosed on an SSPA disclosure statement and that the failure to disclose such information is a violation of the SSPA and renders the transfer void ab initio; and That Settlement Funding, LLC, Peachtree Settlement Funding, LLC, and J.G. Wentworth have violated the SSPA by intentionally blacking out or redacting information of prospective transferors of structured settlement payment rights in documents filed the courts, which undermines the ability of a competing factoring company from contacting such person with a more competitive (higher) offer for their future payments. Additionally, RSL Funding is entitled to its reasonable attorneys fees under the

k.

35.

Texas Uniform Declaratory Judgments Act, TEX. CIV. PRAC. & REM. CODE ANN. 37.001, et seq. THEFT OF PROPERTY 36. RSL Funding realleges and incorporates by reference paragraphs 1 through 35 above

as if set forth in full herein. 37. RSL Funding has a possessory right to the property seized by Old Peachtree in the

writ of execution. Specifically, Old Peachtree unlawfully appropriated the property to which RSL Funding had the right to use for its benefit in the ongoing operation of its business. Old Peachtree misappropriated the property with the intent to deprive RSL Funding of the use of the property. Therefore, RSL Funding sustained damages resulting from the conduct of Old Peachtree. 38. RSL Funding has a possessory right to the customer database misappropriated and

wrongfully used by Counter-Defendants. Counter-Defendants misappropriated the property with the intent to deprive RSL Funding of its right to use the database for its benefit in the ongoing operation of its business. Therefore, RSL Funding sustained damages resulting from the conduct of Counter-Defendants. 39. Additionally, given that no monetary judgment exists, RSL Funding seeks a turnover 15

of the database misappropriated by Counter-Defendants and the property wrongfully seized by Old Peachtree and the immediate return of all misappropriated goods to the owners. CONVERSION 40. RSL Funding realleges and incorporates by reference paragraphs 1 through 39 above

as if set forth in full herein. 41. RSL Funding had a possessory right to the property wrongfully seized by Old

Peachtree in executing the writ. Counter-Defendants wrongfully exercised dominion and control over the property in an unlawful and unauthorized manner, to the exclusion of and inconsistent with RSL Fundings rights to the use of that property. Old Peachtree has improperly converted the property by seizing under a writ of execution intended for Rapid assets owned by others and to be used by RSL Funding. Old Peachtree ignored demands for return of the property. As a result of the foregoing conversion, RSL Funding has sustained damages in an amount in excess of the minimum jurisdictional limits of this court, for which it herein sues. 42. RSL Funding had a possessory right to the database misappropriated and wrongfully

used by Counter-Defendants. Counter-Defendants have wrongfully exercised dominion and control over the property in an unlawful and unauthorized manner, to the exclusion of and inconsistent with RSL Fundings rights to the use of that property. As a result of the foregoing conversion, RSL Funding has sustained damages in an amount in excess of the minimum jurisdictional limits of this court, for which it herein sues. FRAUDULENT TRANSFER 43. RSL Funding realleges and incorporates by reference paragraphs 1 through 42 above

as if set forth in full herein. 16

44.

After RSL Funding filed its original counterclaim, New Peachtree was added as a

party to this lawsuit. In order to avoid the existing judgments against Old Peachtree and the likelihood of a judgment for these improper acts, New Peachtree, J.G. Wentworth, and JGWPT and/or other third parties have received transfers of assets, accounts, databases, and other property directly or indirectly from Old Peachtree. The transfers were in exchange for little or no equivalent value. 45. The transfers constitute fraudulent transfers under Texas or other applicable law. PIERCING THE CORPORATE VEIL/ALTER EGO 46. RSL Funding realleges and incorporates by reference paragraphs 1 through 45 above

as if set forth in full herein. 47. Old Peachtree, New Peachtree, J.G. Wentworth, JGWPT, and JLL Partners have been

operated as shams to perpetuate a fraud. Specifically, Old Peachtree is the alter ego of New Peachtree, which assumed and does business using the name Peachtree or derivations of the same or similar names. Moreover, both Old Peachtree and New Peachtree are mere alter egos of JGWPT, which owns and controls Old Peachtree, New Peachtree, and J.G. Wentworth, as well as other entities used to perpetrate a nationwide scheme to evade the SSPAs with the achieved objective of gouging customers with high prices and discounts, and preventing competition in the marketplace. 48. The Court should ignore the form of Old Peachtree, New Peachtree, J.G. Wentworth,

and JGWPT, finding their true owners, interest holders, partners and members as responsible for the conduct of Old Peachtree, New Peachtree, J.G. Wentworth, and JGWPT under alternative theories of alter ego, veil piercing, and other equitable claims and remedies. As such, RSL Funding asks the Court to hold New Peachtree, JGWPT, and JLL Partners responsible for Old Peachtrees 17

misconduct and, as may be appropriate, find the owners, interest holders, partners and members of New Peachtree, J. G. Wentworth, JGWPT and JLL Partners responsible for New Peachtrees misconduct. CIVIL CONSPIRACY 49. RSL Funding realleges and incorporates by reference paragraphs 1 through 48 above

as if set forth in full herein. 50. Old Peachtree, New Peachtree, J.G. Wentworth, and JGWPT have acted in concert,

combination, and conspiracy to artificially depress offers to customers for the purchase of structured settlement payment rights, lottery payment streams, and annuities from annuitants in the secondary market. Additionally, Old Peachtree, New Peachtree, J.G. Wentworth, and JGWPT, individually, or acting through their agents and representatives and subsidiaries and affiliates, have entered into unlawful and improper agreements with other members of the National Association of Settlement Purchasers (NASP), the trade association of factoring companies, not to solicit other members deals and not to make competitive bids to customers who have signed contracts with another member of NASP. RSL Funding is not part of this alliance, declining to engage in what it believes is anti-competitive conduct in restraint of trade. RSL Funding is one of the few companies that is willing to make competitive offers to annuitants who have tentatively decided to sell their structured settlement payment rights. This industry-wide agreement to depress the market of offers for purchase of structured settlement payment rights is anti-competitive, unlawful, and is directly at odds with the underlying purpose of the SSPA. As a result of the foregoing conspiracy, all of which, upon information and belief were orchestrated by and/or continued by David Miller, RSL Funding has sustained damages in an amount in excess of the minimum jurisdictional limits of this court, for 18

which it herein sues. WRONGFUL INJUNCTION 51. RSL Funding realleges and incorporates by reference paragraphs 1 through 50 above

as if set forth in full herein. 52. The temporary injunction sought by Old Peachtree against RSL Funding and

Liquidating Marketing was designed to eliminate competition. The temporary injunction previously issued against RSL Funding and Liquidating Marketing permitted Old Peachtree to impose outrageous rates given that the terms of the temporary injunction order prohibited RSL Funding from making competitive offers for structured settlement payments to individuals such as Michale Parenti. Thus, once Old Peachtree signed up a customer, the customer was stuck with Old Peachtree, even though, but for the restraints placed on it by the temporary injunction order, RSL Funding would have offered the customer a better financial arrangement (i.e., more money) for his or her structured settlement. In doing so, RSL Funding was deprived of significant business. 53. The injunctive relief that was obtained by Old Peachtree against RSL Funding was

wrongful in its inception. Old Peachtree prosecuted its claims against RSL Funding and sought the injunction maliciously and without probable cause, and it did so by using the court system to eliminate competition from RSL Funding in the market. Moreover, the injunctive relief now sought by Old Peachtree and New Peachtree against RSL Funding is wrongful in its inception and is sought maliciously and without probable cause, and they have done so by using the court system to eliminate competition from RSL Funding in the market. 54. RSL Funding will show that as a direct and proximate result of the wrongful issuance

of the temporary injunction above described, RSL Funding sustained damages for which Old 19

Peachtree and its sureties are liable. 55. Additionally, RSL Funding alleges malicious prosecution based on the wrongful

issuance of an injunction. Old Peachtree and New Peachtree have instituted and continued a civil proceeding against RSL Funding. Old Peachtree commenced and prosecuted its application for temporary injunction with malice, and without probable cause for the proceeding. Similarly, Old Peachtree and New Peachtree have commenced and prosecuted their application for temporary injunction with malice, and without probable cause for the proceeding. As a direct and proximate result of the wrongful issuance of the temporary injunction above described, RSL Funding sustained financial losses for which Old Peachtree is liable. More specifically, the temporary injunction caused RSL Funding to lose profits on the transactions from which it was restrained from making better offers to annuitants for their structured settlements. RSL Funding has suffered special damages. CONDITIONS PRECEDENT 56. All conditions precedent have been performed or have occurred. JURY DEMAND 57. RSL Funding hereby demands a trial by Jury.

WHEREFORE, PREMISES CONSIDERED, Counter-Plaintiff RSL Funding, LLC prays that upon final trial hereon, it have and recover a final declaratory judgment ascertaining the rights, title, and interests of the parties as set forth herein; that it have and recover a final judgment awarding actual, consequential, incidental, and special damages jointly and severally against Settlement Funding, LLC, Peachtree Settlement Funding, LLC, J. G. Wentworth S.S.C. Limited Partnership, JGWPT Holdings, JJL Partners, and David Miller; that it recover reasonable, 20

necessary, equitable and just attorneys fees, costs of court and all other taxable or recoverable expenses; that it recover prejudgment and post-judgment interest at the maximum lawful rates; and all other relief, both at law and in equity, to which RSL Funding may be entitled. Respectfully submitted,

/s/ Michael Choyke Michael Choyke State Bar No. 00793504 WRIGHT & CLOSE, LLP Three Riverway, Suite 600 Houston, Texas 77056 Telephone: (713) 572-4321 Facsimile: (713) 572-4320 choyke@wrightclose.com Attorneys for RSL Funding, LLC

21

CERTIFICATE OF SERVICE The undersigned certifies that a copy of the foregoing instrument was served upon the attorneys of record for in accordance with Rule 21a, Texas Rules of Civil Procedure, on this 27th day of March, 2012. L. Bradley Hancock Christopher Johnsen GREENBERG TRAURIG 1000 Louisiana, Suite 1800 Houston, TX 77002 John R. Craddock E. John Gorman The Feldman Law Firm LLP Two Post Oak Central 1980 Post Oak Blvd., Ste. 1900 Houston, Texas 77056

/s/ Michael Choyke Michael Choyke

22