The Badger family of Allendale County, South Carolina, has almost positive news to report after experiencing one tragedy after another since January 28, 2011.
That’s the day Donna Hay Badger, 35, was killed in a collision with a UPS truck, leaving Arthur Badger Jr. a single father of six. His attorney negotiated a multimillion-dollar settlement in 2012 to ease the financial burden. But that attorney was Alex Murdaugh, who quietly stole more than $1.3 million of that settlement, along with former Palmetto State Bank CEO Russell Laffitte.
Millions of additional settlement funds earmarked for the Badger children were placed in structured settlements, financial arrangements that would give each child periodic tax-free payments for decades after they turned 18.
But nearly all of those future payments were sold to out-of-state entities known as structured settlement factoring companies, which paid the cash-strapped Badgers small amounts of upfront cash to secure those future millions. The three youngest Badger children, for example, received 7 cents on the dollar from the companies.
Court documents show the children, who were 8, 9 and 11 when the deals were made in 2018, now stand to get all that money back after a settlement was reached between the family, the factoring companies and the attorneys who helped them execute the “unconscionable” deals.
McClatchy published the 2022 investigative series “Cashed Out,” which detailed how factoring companies took advantage of inadequate state protection laws and inattentive S.C. judges to gain control of future payments meant to provide financial stability to vulnerable injury victims. The series led state lawmakers to make sweeping changes to South Carolina law governing these transactions, including expanded disclosure requirements and requiring the deals to be approved by judges in the county where the seller lives.
In that series, McClatchy told the story of a group of factoring companies, all run by a man banned from doing such deals in Maryland, and how they convinced Arthur Badger—who was near financial collapse—to sell more than $2.8 million in his daughters’ future payments for $200,000 in a series of deals approved by a part-time judge who has never dismissed such transactions.
Mark Tinsley, the attorney who represented the Badger family in the dispute with Murdaugh, couldn’t believe it when a reporter pointed him to the court documents related to the deals. But he vowed to do everything he could to restore the girls’ structured settlements.
Once a judge signs off on the settlement in October, Tinsley will have made good on that promise and then some. The defendants in the case agreed to fully restore the girls’ future payment rights and pay an additional $2.3 million to release them from all claims related to the deals and allow them to continue to deny liability, court records show.
“They’re not admitting guilt, but you can draw whatever conclusion you want,” Tinsley said. “People don’t pay millions of dollars (to settle a case) that they think they’re going to win.”
Who are the suspects and what have they done?
Defendants in the case included Ryan Blank and the three Delaware LLCs he created to conduct the transactions. The Maryland attorney general’s office in 2018 barred Blank and several of his associates from doing business in the state after an investigation found they acted deceptively by pushing structured settlement transactions through the courts.
Blank first struck a deal with Badger’s eldest daughter, then 21, in 2017, before asking her to introduce him to Arthur Badger, the complaint said. Blank then paid for Arthur to visit Washington, D.C., where he “wined, dined and lavishly entertained” him in order to convince him to quickly sign deals to sell his minor daughters’ future payments, the complaint said.
Blank and his entities agreed to pay $700,000 as part of the settlement, while SuttonPark Capital, the Florida company that would receive future payments from the girls, agreed to fully restore the structured settlements. Neither Blank nor SuttonPark responded to requests for comment.
The other defendants were all local attorneys involved in approving the deals. North Charleston attorney Richard Steadman, who represented the factoring companies, and his law firm agreed to pay $250,000 in the settlement.
Chapin attorney Taylor Peace and his firm agreed to pay $650,000. Peace filed a letter with the court detailing some of the girls’ transactions, saying he had provided independent advice to Arthur Badger regarding the deals. Peace, who clerked for Steadman while in law school, was paid by Steadman for this work, a conflict of interest since he was supposed to be acting on behalf of the Badgers, the complaint alleged.
Barnwell attorney Martin Harvey and his firm agreed to pay $700,000 after serving as guardians ad litem for the Badger girls in the latest transaction. McClatchy previously reported that Harvey reported to the court his belief that the deals were in the best interest of the minors to help them move to a safer home in a more desirable neighborhood.
The girls, however, continued to live in the same house, which Harvey claims he never visited. The money he received from the deal was used to buy a rental property to supplement the family income.
Steadman, Peace and Harvey did not respond to requests for comment on the settlement.
Brain injury victim also receives settlement
The Badger children would not be the first people featured in “Cashed Out” to receive a settlement after alleged abuse by factoring companies that offer structured settlements.
The series also featured Grace, a woman who suffered a traumatic brain injury after her mother’s car was hit by a train when she was 12.
She was allowed to sell her future payments for 30 years in 17 separate transactions, while quickly spending the money she received in the transactions, bringing her to the brink of losing her home.
The factoring companies involved in the deals offered $182,000 to settle the lawsuit, which alleged they had taken advantage of the incapacitated woman.
Sue Berkowitz, director of the South Carolina Appleseed Legal Justice Center, represented Grace in the lawsuit.
“This young woman needed this support (from her structured settlement), but she was taken advantage of,” Berkowitz said. “We are very pleased (with this settlement) that we can get her out of this dire situation.”
