6 Mistakes Business Owners Make When Yellowstone Capital Sues

If you’re a business owner who’s been sued by Yellowstone Capital over a Merchant Cash Advance, the biggest mistake you can make is to treat it like any other ordinary live lawsuit. This is a very unusual case: the New York Attorney General’s settlement with Yellowstone canceled about $534 million of business debt owed to them. Pending lawsuits were dismissed. Many judgments were vacated.

In March 2024, New York’s attorney general sued Yellowstone. She said that Yellowstone’s MCAs were really loans, charging interest far above what state law allowed, and using deception and fraud to collect. Now Yellowstone is permanently banned from the MCA business, and so are two of its executives. Below are six mistakes to avoid.

1. Not checking who funded you

To benefit from this settlement, entrepreneurs have to confirm that one of the 25 listed companies extended their cash advance - which requires carefully reviewing the documents of the contract you signed at the time and comparing them to the list. The name at the top of your Merchant Cash Advance contract might just be an operating name. For the settlement to apply, you need to find the legal name in the first paragraph of the contract. The person you emailed about the contract might have been a broker in between you and the funder. Another place to look is your bank statement - who actually debited your account?

The settlement doesn’t cover Delta Bridge Funding, aka Cloudfund, the company that took over Yellowstone’s merchant cash advance business in May 2021. The AG’s lawsuit against Delta Bridge is still in progress. On March 4, 2026, the court refused to dismiss the AG’s lawsuit against Delta Bridge. It also doesn’t cover any other merchant cash advance company: the Attorney General didn’t give you a blanket wipeout card. If your business owes an MCA company different from the 25 listed, the case goes on.

2. Paying a canceled debt

The worst-case scenario is paying them anything, even a penny. This is a total cancellation. The settlement cancels 100% of the debt whether the business owes it or you personally guaranteed it. If you’d already settled with Yellowstone, any remaining balance is now canceled. Yellowstone can’t collect anything more from you, and they can’t sell the debt to anyone else. If anyone tries to collect this debt from you, file a complaint with the New York Attorney General’s office.

Rust Consulting, the settlement administrator, sent out notices on March 21, 2025. They went by mail or email, to whatever contact information Yellowstone had on file. If you’ve moved or changed email addresses since taking your Merchant Cash Advance, you may not have gotten it.

3. Ignoring the summons

If Delta Bridge or another MCA company sues in New York, and the debt isn’t on the list, the settlement doesn’t apply to you. You have to answer in 20 days if the papers were handed to you personally, or 30 days if served by some other means. If the defendant is a corporation, it has to appear through a lawyer, except in some small-claims-type courts.

The Attorney General has asked the court to rule Delta Bridge MCAs are illegal loans, and to order Delta Bridge to stop collecting, but there’s been no ruling yet. If there was, it would only apply to Delta Bridge and not to any other merchant cash advance company. Until then, whether you should keep paying them is a question for your attorney.

4. Assuming the judgment disappeared

Courts in each county vacated judgments on lists Yellowstone filed, plus ones merchants named in claims forms they filled out. The last batch was vacated on December 18, 2025. A judgment you paid in full and marked satisfied didn’t have to be vacated, since its effect has already ended. The vacatur order only covers judgments won by one of the Yellowstone companies. And if you don’t know which county the judgment’s in, search your business name on the New York courts’ online case search.

If a default judgment’s still active - or if it’s from a funder outside this settlement - and you want to vacate it for excusable default, file the papers within one year after notice of entry was served. Default judgments usually carry 9% yearly interest in New York.

5. Forgetting about the lien

The deadline to submit a request to Yellowstone to terminate their UCC lien on your business property has now passed. The cutoff was July 8, 2025. But UCC liens usually run out on their own after five years, so an older one might already be gone. It’s worth checking your state’s database (in New York, the Department of State’s UCC search is on their website).

6. Waiting on the settlement

The January 9, 2026 deadline to submit a claim to the settlement fund is now closed. The payment checks were mailed out on April 3, 2026. There wasn’t enough money to pay everyone in full. Amounts are final; the Attorney General’s office can’t change them. The settlement doesn’t affect your right to sue Yellowstone on your own. Contact your own lawyer, and don’t rely on advice from the Attorney General’s office, who can’t offer legal advice.

The case against Delta Bridge and the others is still going. Your statements and evidence can help prove deception and fraud, so if you had a Yellowstone or Delta Bridge MCA, fill out the complaint form on the AG’s website, giving as much detail as you can. Attach copies of your MCA agreements, payment records, emails and texts, and make a note if you have more documents.

A free contract review costs nothing and takes a day or two. Call (888) 837-7053, or send the agreements to Delancey Street for a straight read on your options.