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CASE STUDY 4
Class Action - Interchange Claim Rights
Situation
Over 12 million merchants are potential beneficiaries of the largest class action settlement in history which was approved in December 2019 by the District Court in New York. Visa/MC have escrowed over $6.0 billion to satisfy the claims.
Acquiring class action rights to the settlement from merchants offers significant opportunity to generate returns with no correlation to the broader market and significant margin of safety. Claims can be purchased at a significant discount to projected recoveries due to a variety of factors.
Haybeach Advantage & Value-Add
No Price Transparency. Purchases are directly negotiated with original beneficiary.
Little to no competition exists as the universe includes 12mm+ potential beneficiaries.
Sellers are unaware of the value of the claim and it is effectively “found money.”
Sellers have conducted limited to no analysis on what the recovery rights are worth.
Haybeach has served as an educational resource to clients creating long-term relationships which have led to other transactions with various corporate beneficiaries.
Outcome
Recent secular declines in the traditional consumer discretionary industries have been exacerbated by the COVID-19 pandemic resulting in a heightened need to generate liquidity by corporates from non-core assets.
Claims Process likely to begin in 2023.