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LG Funding, LLC

LG Funding, LLC is a Brooklyn-based financial services company specializing in merchant cash advances (MCAs) for businesses. While MCAs can provide quick access to capital, it's crucial for consumers and business owners to understand the implications of these financial products.

LG Funding, LLC is located at1218 Union St Ste 2 Brooklyn, New York 11225-1512.

The Langel Firm defends against collection lawsuits, wage garnishments, and bank seizures related to various types of consumer debt. If you're facing challenges with an MCA or other financial products, professional legal assistance may help protect your rights and explore your options. If you need help, complete this intake form.

Key Elements of a Merchant Cash Advance

1. Fast Financing: LG Funding offers rapid access to working capital, often within days.
2. Alternative to Traditional Loans: MCAs are typically easier to qualify for than bank loans, making them attractive to businesses with limited credit history.
3. Repayment Structure: Borrowers repay MCAs through a percentage of their daily, weekly, or monthly sales, often via automatic deductions.
4. High Costs: The convenience of MCAs often comes with significantly higher costs compared to traditional financing, with some APR equivalents reaching triple digits.
5. Short-Term Solution: MCA terms usually range from 3 to 12 months, positioning them as short-term financial tools.

Court Allows Usury Defense in LG Funding Merchant Cash Advance Agreement Dispute

A company that purchases future receivables sued a merchant for breach of contract. The merchant asserted affirmative defenses and a counterclaim alleging the transaction was a criminally usurious loan. The plaintiff moved to dismiss these defenses and for summary judgment. The court denied dismissal of the affirmative defenses and summary judgment, finding that the transaction could potentially be characterized as a loan subject to usury laws. However, the court dismissed the merchant's counterclaim based on criminal usury.

Key Legal Principles:

1. To determine if a transaction is a usurious loan, courts must examine its totality and real character, not just its form or label.
2. For usury laws to apply, there must be an absolute obligation to repay the principal sum advanced.
3. While criminal usury can be asserted as an affirmative defense by certain business entities, it cannot form the basis of a counterclaim.

Conclusion: This case highlights the complex nature of merchant cash advance agreements and their potential to be recharacterized as loans subject to usury laws. Courts will closely examine the terms of such agreements to determine if repayment is truly contingent or absolute. While defendants may raise criminal usury as a defense, they cannot use it as a basis for a counterclaim.

Citation: LG Funding, LLC v United Senior Props. of Olathe, LLC, 181 AD3d 664 (2d Dept 2020)

Forum Selection Clause Specifying "Any Court in New York" Deemed Insufficient to Establish Proper Venue

A merchant cash advance company sued a business and its guarantors for breach of contract in Nassau County. The defendants moved to change venue to Kings County, where the plaintiff's principal office was located. The plaintiff argued that a forum selection clause in the agreement allowing suit in "any court sitting in New York" permitted it to choose any county. The court granted the motion to change venue, finding the forum selection clause insufficiently specific to establish proper venue in Nassau County.

Key Legal Principles:

1. Contractual forum selection clauses are generally enforceable in New York unless shown to be unreasonable.
2. A forum selection clause that merely specifies a state rather than a specific county does not provide the certainty and predictability intended by such clauses.
3. To deviate from statutory venue protections, an intent to select a specific county for trial must be clearly and unambiguously stated in the contract.

Conclusion: This case demonstrates that forum selection clauses in contracts must specify a particular county or jurisdiction within New York to be enforceable for venue purposes. A clause allowing suit in "any court in New York" is too broad to override statutory venue rules or prevent a change of venue motion. Parties drafting such clauses should be specific about the intended forum to ensure enforceability.

Citation: LG Funding, LLC v Advanced Pharma CR, LLC, 58 Misc 3d 231 (Sup Ct, Nassau County 2017)

LG Funding LLC Case Dismissed: Lack of Diversity Jurisdiction Exposed in Merchant Cash Advance Contract Dispute

A financial services company filed a lawsuit against a merchant cash advance provider, alleging contract violations. The case was initially defaulted but later reopened. Upon reviewing the citizenship of both parties' members, the court found that complete diversity did not exist, as both entities had members who were citizens of Florida. Despite the plaintiff's objections, the court ultimately dismissed the case for lack of subject matter jurisdiction.

Key Legal Principles:

1. For diversity jurisdiction to exist, there must be complete diversity between all plaintiffs and all defendants.
2. The citizenship of an LLC for diversity purposes is determined by the citizenship of each of its members.
3. Failure to file objections to a magistrate judge's Report and Recommendation within the specified time waives the right to appeal any order or judgment based on that report.

Conclusion: This case underscores the importance of accurately determining the citizenship of all parties, especially when dealing with LLCs, before asserting diversity jurisdiction in federal court. It serves as a reminder that even if diversity appears to exist on the surface, the court will look to the citizenship of all members of an LLC to ensure complete diversity.

Citation: Verdict Assurance Grp. v. LG Funding LLC, No. 22-CV-312 (WFK) (PK) (E.D.N.Y. Mar. 28, 2023).