A judge has ruled that dozens of condominium associations can collectively sue a Tampa debt-collection company, potentially a major blow to the already-troubled company’s prospects.
Source: www.tampabay.com
Tampa based LM Funding has been accused of deceptive trade practices and charging illegally high interest rates in a new class action lawsuit approved by a Florida judge. The company was founded in 2008 by Tampa lawyer Bruce Rodgers and his wife, Carollinn Gould, LM Funding advances condominium associations money for maintenance and repairs in exchange for the right to collect delinquent fees, interest and late fees from unit owners. That said, the also own the law firm that provides the legal services for LM Funding and the business model appears to be predicated on racking up extensive legal fees in additional to illegally high interest rates.
The company has been in trouble since its IPO and the stock has fallen nearly 60% while shedding staff and executives slashing salaries. The amount of delinquency in condo associations has dropped dramatically over recent years with expected declines going forward in delinquent association dues because of the strong real estate market. The timing of the IPO seemed odd as the business model appeared to be flawed.