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Field Examination

Field Examination of a Factoring Company

Durkin Group was engaged by a Bank to perform a recurring field examination of a finance company that factors attorney’ legal fees that have become due and payable through pre-litigation settlements. These settlements are usually for personal injury, workers compensation, and class action litigation cases and are typically due from insurance companies and state insurance funds. During testing, the field examiner noted that the finance company had pledged multiple receivables to the Bank for which it had never advanced funds to its client. The Bank was notified that the borrowing base was overstated and the owners of the finance company were required to repay the amount of the collateral shortfall to the Bank.

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