Opinion ID: 160448
Heading Depth: 2
Heading Rank: 1

Heading: The Financial Transactions

Text: 3 The Plaintiffs are investors in First Capital Network, Inc. First Capital and Gregory's business, Gregory & Associates, Inc., engaged in a series of financial transactions, known as factoring arrangements, in which First Capital would pay Gregory & Associates 65 to 70 percent of its expected insurance commissions up front, and in return, First Capital would receive the rights to the commissions paid over time. Gregory and his wife, Linda, the majority shareholders of Gregory & Associates, personally guaranteed payment of the commissions to First Capital. First Capital assigned the rights it had purchased from Gregory & Associates to certain of its investors, including the Plaintiffs. 4 By 1994, the factoring arrangement between Gregory & Associates and First Capital had become less stable. The factoring arrangement began to include not only commissions payable on insurance contracts Gregory & Associates had already obtained, but also commissions on insurance contracts that Gregory & Associates hoped to obtain in the future. When Gregory & Associates failed to obtain these future insurance contracts, the factoring arrangement began to falter and by April 1995, Gregory & Associates could not pay First Capital all the money it was owed. By December 1995, Gregory & Associates ceased making any payments to First Capital. Gregory & Associates still owed Plaintiffs approximately $968,000.