In the Company filed a lawsuit in Delaware state court against a -party servicer arising from the -party servicer’s failure to pay the Company certain amounts that are due the Company under a servicing agreement. The -party servicer filed a counterclaim in the Delaware action alleging that the Company owes certain amounts to the -party servicer for court costs pursuant to an alleged arrangement between the companies. On or about the parties agreed to settle the action pursuant to a settlement agreement and release, which provides for, among other things, the payment by the -party servicer of million to the Company pursuant to an agreed upon schedule with a lump sum payment to be made at the anniversary of the agreement.

 

These fee-based settlements are required to total million and million by the and anniversaries, respectively. To the extent that these fee-based settlement fees are less than these amounts, the servicer is required to make lump sum true-up payments.

 

The Company determined the fair value of this settlement using (i) historical collection history to estimate the fee based settlement fees that are expected to be received each month from the servicer; (ii) the contractual true-up dates, discussed above, in order to estimate the anticipated true-up payments that will be received from the servicer on the and anniversaries; and (iii) an imputed interest rate of

 

As of and the Company has a settlement receivable due from this -party servicer of million and million, respectively. During the months ended the Company received million in payments from this -party servicer. For the and months ended and the Company recorded and and and respectively, in interest income, which is included in other income on the Company's condensed consolidated statements of operations. 

 

On DLCA, LLC (“DLCA”), a Delaware limited liability company and a wholly owned subsidiary of the Company, filed a complaint against Balance Point Divorce Funding, LLC. (“Balance Point”) and Stacey Napp (“Napp”) in the United States District Court of New Jersey, asserting various claims including breach of contract, conversion, unjust enrichment and fraud associated with a loan made to Balance Point and Napp in

 

On Napp and DLCA entered into a Settlement Agreement that settled the action as well as all other claims for monies and/or other obligations owed as and between the parties.

 

Napp agreed to pay the sum of million (the “Settlement Amount”), the payment terms of which are between and

 

The Company has previously reviewed the financial condition of both Balance Point and Napp, and has concluded that neither entity currently has assets sufficient to honor the obligations set forth in the Settlement Agreement. Therefore, due to the uncertainty of collecting the Settlement Amount from either Balance Point or Napp, the Company will realize the gain on this settlement, as the Company receives the cash proceeds. Napp missed the due in and made a payment in The Company has recognized a gain on settlement of for the and months ended in its condensed consolidated statements of operations.