Neil Ruther and Persels & Associates, New Details in Suit for Millions

Recently I reported on a suit filed against Neil Ruther, Persels & Associates, Joann Ruther, Adam Ruther, WMS Partners, Silo Point Holding, Silo Point, Patrick Turner, Mark Sapperstein, Westport Property Holdings, and Ruther Inner Harbor. See Persels & Associaties Sued By My Professional Advice and Legal Advice Line for Diverting Money.

Today I received additional public documents filed in the case from a tipster (send in your tips here).

This document is a motion for summary judgment. This document alleges that the Defendants entered into a binding and enforceable agreement to settle the litigation on the eve of trial and then defaulted. After the settlement was signed, obligatory subsequent payments were not made in accordance with the agreement.

This failure to cure the default and make the agreed upon payments then escalated this matter, that would have otherwise remained secret.

The production of documents in this case appears to arise as a result of the suit to enforce the monies agreed to be paid.

What is interesting is how CareOne Ascend One and Bernie Dancel were named in the litigation settlement agreement, not as parties, but as a factor in continuing the relationship with Persels & Associates and how that impacted the ability of Percels & Associates to pay more.

It is shown in this new document received that Neil Ruther and Persels & Associates, in accordance with the settlement agreement, agreed to pay the following amounts.

The document received by me today contains a copy of the signed settlement agreement. Images of those pages are below. You can click on the image to see a larger view.

The settlement document above specifically references CareOne, Bernie Dancel and Ascend One Corporation as part of the income calculations.

But the document goes further to say:

Persels & Associates will make commercially reasonable efforts to continue the relationship with CareOne. Beginning in 2016, if Persels & Associates or Neil Ruther continue a relationship, directly or indirectly, with CareOne, Bernie Dancel or any AscendOne entity MPA shall be paid:
$2,250,000 paid $562,500 per quarter in 2016
$2,250,000 paid $562,500 per quarter in 2017
$2,250,000 paid $562,500 per quarter in 2018
$2,250,000 paid $562,500 per quarter in 2019

Total of all payments is $18 million.

Interestingly, Ruther has the right to settle the debt built into the agreement.

See also  Mike Croxson from CareOne and I Talk About The New FTC Rules, Attorney Model Debt Settlement and the Lack of Clarity in Credit Counseling

In addition, as part of this signed agreement, Neil Ruther’s compensation is capped.

Apparently Persels & Associates held stock in My Professional Advice, Inc. (“MPA”) and as part of this agreement, must return it.

The agreement states that until MPA has been paid in full, Persels & Associates will make reasonable efforts to maintain a referral relationship between Persels & Associates, on one hand, and Ascend One, its subsidiaries and affiliates and Bernie Dancel, on the other hand.

According to the accounting schedule attached, Persels & Associates made over $78 million in legal fees from their DSP which I am assuming is debt settlement program. – Source

One thing is for certain, I doubt this matter is over yet.

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10 thoughts on “Neil Ruther and Persels & Associates, New Details in Suit for Millions”

  1. If Care One were smart, they would drop P&A as their Attorney Model they use to avoid state licensing and fee guidelines. Along with this suit and the ones from Florida, Kansas, Washington maybe others will cause more an more states to take aim.  Next thing you know they are in receivership and Neil and Jim Persel, other partners law licenses will be suspended for fee splitting and engaging in deceptive and unfair trade practices. We have seen this over and over again, states are not looking at an attorney model any differently than they do with a regular DS company.  Care One is still being greedy, understandable, even if they are performance based look at all the fees they are raking in by doing DS in 47 states.  Last time I checked there was only about 20 states that actually allow you to charge upwards of 15% of the total debt load even on a performance basis.  The industry has classified the red and green states for a long time now for a reason.  As big as Care One is, you would think they would remain compliant with certain states, then again the consumers are signing a P&A agreement and not a Care One agreement, which could still come back to bite them.

    Oh, and Mike Croxson did email me back and say that Persels is definitely doing business in Louisiana.

    Louisiana could have a big score on their hands if they decided to take action.  2006 Louisiana Code- RS 14:331- Prohibition of debt adjusting when conducted for profit.


    They have an attorney exemption, however it states: 

    (1)  Situations involving debt adjusting incurred incidentally in the lawful practice of law in this state

    Last time I checked, the way P&A engages in debt adjusting is certainly not “incidentally”.  Of course you can argue and say that it is up to interpretation.  But I would have to believe that anyone in their right mind could agree with the same interpretation.

    Steve, when Care One gets wrapped up in all of this which they will, it is not going to look well on you and your debt club called  the AACC.

      • Should we expect a response from the law firm?  Or from Care One?  Alien technology or perhaps time travel might explain how this happened.

        • Errick, my assumption is that you work in credit counseling
          at an executive level. Unless you reply that you are an attorney practicing
          debt collection or bankruptcy, it would be hard to shake me off of this.
          You have posted continuously on Care One threads on this site and rail against
          debt settlement. You never mention that CareOne also provides debt management
          plan services. Why is that?
          CareOne offers DMP’s as a for profit company. One of the few who do. They do
          not accept fair share or grant contributions from creditors to my knowledge,
          unlike the non profit DMP providers who, for the most part, are beholden to
          creditors and their whimsies because without the revenue from creditors they
          would fail as going concerns. Why is it that CareOne can do what non profits can’t?
          Are they more efficient than non profits? Probably, but let’s be real here. It
          costs less than 10 bucks a month to service a DMP client. For some I bet the
          costs are less than that. If the average monthly fee is $30 that’s at least a
          200% return! With that kind of margin, why do non profits even need fair share
          or grant money from creditors? What well run company cannot do well with a 200%
          monthly operations budget?
          I did not account for marketing. To do so would be to admit that nonprofit DMP
          providers have to market. All the stuff I see presents nonprofits as some
          benign help the community -help the people – type of set up. They are not. They
          are companies just like any other. They just don’t pay tax and have to comply
          with certain things as a result. They are to provide education. Big whoop!
          There are many free sites with constantly updated money, budgeting and finance
          education and advice that blow doors on the education offered by most non
          profits. That being the case, non profits appear to not have to pay tax for
          next to no good reason. If free sites can provide the same and better education
          to consumers at no cost and pay tax on whatever revenue they generate, why cut
          the nonprofits a tax break? Because they do the educating live in office or in
          the local community, in schools and such? Maybe, but how many of the non
          profits do that really? Could nonprofits who do not engage in DMP services do
          the same and non profits DMP-ers pay tax? Yes indeed. Would creditors cut fair
          share and grants even more because the “donations” would no longer be
          a tax write off for them? You betcha! Nonprofits may take exception to my
          stating this so simply, but it’s just not complicated.
          So, non profits market. Is that why they need grant and fair share money? The
          marketing and acquisition costs? Probably partly. I think its more a fact of
          customer attrition though. What is the success rate of a DMP client? How many
          people drop from a DMP in 3 to 12 months. Determining that number is important
          for the American public to know. If the attrition is high, it means non profits
          enroll people who should have been referred straight to bankruptcy. That’s the
          only next step according to your answer. Why take on people who cannot finish?
          For revenue and to serve the nonprofits true master, the banks. If nonprofit
          DMP providers truly serve the consumer, and given your position that its either
          DMP or BK than the only people who should ever be referred to nonprofit DMP
          providers would be because of the BAPCPA. Following your logic it’s just that
          plain and simple.

          People should TRY EVERYTHING and when failed then to bankruptcy
          is what you said above. Why Errick? Because its the moral thing to do? Because
          it generates revenue for non profits? Because it serves banks?

          So, what’s your opinion on CareOne’s DMP service they offer
          while not accepting funds from creditors? Any feedback? I know mine. Its Kudos
          to CareOne for being positioned to represent consumers more than banks.
          Nonprofit DMP-ers cannot say they represent consumers more than banks with a
          straight face.
          I guess there are some states that require a nonprofit deliver a debt
          management plan. So non profits should only exist to serve those states. I
          think those laws should be changed to allow for profit companies who can do it better
          and for less cost than the non profits and who pay tax to the treasury that
          supports this country in its current troubled economy. Why the hell should
          nonprofit DMP-ers be getting the tax break on DMP revenue when there is not
          enough in the coffers to prevent severe poverty in this nation?

          Errick – You favor DMP’s and I assume you work in the
          nonprofit sector at a high and well informed level. How consumer focused are
          the DMP-ers when 2 years ago one of the largest credit card issuers and another
          one in the top 12 were offering account holders to settle their accounts at 15%
          of the balance pre charge off? Were the DMP-ers “educating” consumers about
          that? Bet not. For me, that would mean they are not interested in helping
          consumers, just themselves and the banks they serve. Banks that, need I remind
          you, have and will continue to pay out BILLIONS of dollars for their wrong
          doing. That’s what you support Errick. A system that brought this nation to its
          worst economic condition since the great depression.
           “Now get in the pit
          and try to love someone.”
          P.S. I don’t work for CareOne or company related to them. I
          am not related to anyone who does work for them nor any contractor for them
          etc. I am just kinda sick of the Erricks and the holier than thou attitude they
          have about debt management plans that are mostly offered by nonprofits. CareOne
          is an exception and a good one for the DMP.

  2. Well, if you doubted before, doubt no longer.  Care One uses a law firm as a front to provide debt settlement around the regulatory requirements.  Page 2 of the financial statement would show, when all is said and done, that nearly all of the roughly $75 million left after paying the lawyer frontmen goes right back to Ascend One and EFA Processing.  Go ahead and deny it Mr. Croxson.

    • I actually read it a bit different. Since this and previous documents posted make it clear there is a DS relationship with both MPA and Ascend, I read the DSP income as broken down by company but I have no idea which company is which line.

      I also don’t see a “flow back” you alluded to.

      Unfortunately this is all that is in the filing. There was no page two included.

      I think the part we both missed is that in page one the income is labeled both Persels & Associates and CLA, which I believe to be Consumer Law Associates. I can see the connection between Persels & Associates and Consumer Law Associates but have no specific evidence to support which income line belong to which entity outside the firm.

      • One thing you have to agree is that money going to settle lawsuits is not going to help people with their debts. Good thing that was never the intent, or this would make quite a dent.

          • I am not, but what if I were?  Why would that concern you?  I mean, it’s not as if Care One does all the trust accounting for the law firm, right?  Oh wait…

          • All I wanted was some clarity what you were saying.

            It was not clear to me what you were asserting in your previous comment and I wanted to understand your point of view.

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