On July 5, 2024, Slarskey LLC successfully obtained a temporary restraining order on behalf of its client OptimuMedicine LLC against the predatory merchant cash advance company NewCo Capital Group, LLC.

OptimuMedicine provides emergency medical care to patients throughout Nevada, and in remote regional locations. When OptimuMedicine LLC required financial flexibility for its business, it accepted a “merchant cash advance” from NewCo Capital Group, which NewCo presented as a contingent purchase of a portion of OptimuMedicine’s future receivables.

Recent decisions from the United States Court of Appeals, the Supreme Court of the State of New York, and litigation brought by the Attorney General of the State of New York have placed the merchant cash advance business in New York under scrutiny for illegal lending practices. Specifically, what merchant cash advance lenders present as a flexible contingent purchase of a portion of receivables can, in fact, be a fixed loan at a usurious interest rate.

In this case, notwithstanding that OptimuMedicine made every single payment due under the agreement, NewCo declared a default and converted weekly repayments into oppressive daily cash sweeps at twice the agreed-upon rate. NewCo’s conduct is consistent with other cases in which courts have found that merchant cash advance lenders (including NewCo itself) have engaged in “chicanery” designed to manufacture defaults and prey upon out-of-state businesses. These usurious agreements are unlawful in New York State.

Upon the motion of Slarskey LLC, the Court granted a temporary restraining order in OptimuMedicine’s favor, directing NewCo to immediately stop enforcing the agreement and to cease all collections efforts.

OptimuMedicine LLC is represented by David Slarskey, Evan Fried, Ricky Weingarten, and Kimberly Grinberg.

Click here to read the brief.