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How pre and post-settlement financing works

January 26, 2018 • 2 min read

Pre-settlement finance

When it comes to Legal Finance, plaintiffs may use legal funding to pay for a variety of expenses including lawsuit-related expenses and for general liquidity and personal needs.

This is an advance given to plaintiffs at any time before final adjudication of their case or the parties have entered into a settlement agreement.

Post-settlement financing

This occurs after a legal case has been won or settled, while the plaintiff or the law firm (e.g., if it was a contingency fee arrangement) is awaiting receipt of payment.

Yieldstreet evaluates all PFC portfolios before deciding to participate in a curated, vetted, diversified portfolio of advances. Pre- and post-settlement portfolios will typically include several cases.

Yieldstreet investors generally receive interest payments and a return of their principal in line with the targeted returns and projections described in the offering materials for the particular opportunity.

With pre-settlement financing, the liens are exercised as cases are settled or won, and investors are repaid their principal and interest in multiple event-based payments.

With post-settlement financing, the lien is placed on the funds awarded, and investors are paid principal and interest when the funds are transferred into a bank-controlled escrow account (usually this means a one-time payment to investors).

For additional questions regarding Yieldstreet or our legal finance offerings, please email us at [email protected].

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¹ Past performance is no guarantee of future results. Any historical returns, expected returns, or probability projections may not reflect actual future performance. All securities involve risk and may result in significant losses.

² Represents an net annualized return, using an internal rate of return (IRR) methodology, with respect to the matured investments shown in your Portfolio experience, utilizing the effective dates and amounts of subscriptions and distributions to and from the investments, net of management fees and all other expenses charged to the investments.[read more]

³ "Annual interest," "Annualized Return" or "Target Returns" represents a projected annual target rate of interest or annualized target return, and not returns or interest actually obtained by fund investors. “Term" represents the estimated term of the investment; the term of the fund is generally at the discretion of the fund’s manager, and may exceed the estimated term by a significant amount of time. Unless otherwise specified on the fund's offering page, target interest or returns are based on an analysis performed by Yieldstreet of the potential inflows and outflows related to the transactions in which the strategy or fund has engaged and/or is anticipated to engage in over the estimated term of the fund. There is no guarantee that targeted interest or returns will be realized or achieved or that an investment will be successful. Actual performance may deviate from these expectations materially, including due to market or economic factors, portfolio management decisions, modelling error, or other reasons.

⁴ Reflects the annualized distribution rate that is calculated by taking the most recent quarterly distribution approved by the Fund's Board of Directors and dividing it by prior quarter-end NAV and annualizing it. The Fund’s distribution may exceed its earnings. Therefore, a portion of the Fund’s distribution may be a return of the money you originally invested and represent a return of capital to you for tax purposes.

⁵ Represents the sum of the interest accrued in the statement period plus the interest paid in the statement period.

⁶ The internal rate of return ("IRR") represents an average net realized IRR with respect to all matured investments, excluding our Short Term Notes and Structured Notes programs, weighted by the investment size of each individual investment, made by private investment vehicles managed by YieldStreet Management, LLC from July 1, 2015 through and including June 30, 2024, after deduction of management fees and all other expenses charged to investments.

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⁹ Statistics as of the most recent month end.

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