Answering a Green Fund Complaint: 5 Things to Check First

When you get a summons in a debt collection case, the urge to pick up the phone is understandable. Look at who is suing, check the date by which to appear, and see if any judgment has already been entered. Look at the amount claimed, the account statements, and the agreement, and calculate the balance remaining. A deal can be a good move, but should close the case, and should not be made orally while the court deadline still runs.

1. Check who is suing

If the name on your papers is Green Fund NY, it has brought suit in New York Supreme Court, including, for example, the contract case against Skywriter MD Operations LLC, filed July 12, 2021 in Nassau County, with a merchant agreement attached as an exhibit. However, do not confuse that situation with Green Capital Funding, a Yellowstone Capital affiliate that settled with the NY Attorney General and canceled $534 million in debt, and vacated its lawsuits. The party you are looking for depends on the exact name. That New York settlement reached only Yellowstone and the companies tied to it. If the original loan or cash advance came from Delta Bridge or Cloudfund, it does not help you.

2. Check your deadline

Keep in mind the date by which to appear. In New York, if your summons was handed to you personally, you have 20 days in which to appear. If it was served another way (left with someone at your residence or place of business, or mailed and posted on your door, for example), or was served outside the state, the deadline is 30 days after service is complete. To appear, serve an answer, or a notice of appearance, or a motion that extends time to answer. In a 2021 case Green Fund NY asked the clerk for a default judgment less than a month after filing.

The lawsuit may name a business, along with its guarantor, listing both as separate parties. Check who is named, for whom you can make a deal, and how the papers were served on that party. Send a lawyer the documents and proof of service, to confirm the filing and method of delivery.

3. Check for a judgment

If a judgment has already been entered against you, then see if it is a default judgment (entered because you did not answer the complaint), or if it is a confession of judgment (where you signed a contract and gave permission for judgment to be entered if you did not make your payments).

If it is a default judgment, you can file a motion to vacate for excusable default within one year after you are served with a copy of the judgment and notice of entry. A confession of judgment must be filed only in the county where you lived (business: any place of business) when signing or at filing, and only within three years of signing. Since August 30, 2019 New York bars filing them against out-of-state debtors.

4. Check the agreement and the balance

A debt claim starts with the agreement. Ask for a full payment history and payoff statement, and compare them with the agreement, any amendments, and with your bank withdrawals and credits or refunds. Compare the funding amount to the amount sold. Separate the payments credited from any added charges. Even the amount in a complaint is what the plaintiff claims, not proof of what you owe. A corporation generally cannot raise usury as a defense in New York, but it may raise criminal usury: a rate over 25% per year, a class E felony.

5. Check what a settlement closes

Talks with the other side do not extend the court deadline, so move promptly. Keep in mind that defense and negotiation may run at the same time. Keep in mind also that no merchant cash advance funder, or any party, must accept a discount as a compromise. Check that any settlement is in writing, and terms should close every agreement, specify that the business and every guarantor are released, say when the release takes effect, and describe what a missed payment triggers. Any agreement should call for dismissal of the case, or if judgment was already entered, a satisfaction of judgment or release of any restraint, and some way to check that performance. Verbal promises like “I’ll send you the papers later,” or “We’ll figure that out,” leave too much open.

After finishing payments, keep your signed agreement and every payment record together. Confirm that no further debits to your account followed your last payment, and check the court and lien records to confirm the case shows the judgment or lien satisfied, or the case dismissed. Payment on a debt obligation is a separate event from the court record being updated.

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.