On Monday, April 20, 2009, a federal judge, Magistrate Judge Jacqueline Chooljian, granted an application brought by William D. Chapman, on behalf of his client, BPW Financial Corporation for a right to attach order in the amount of $1.8 million. The order was issued against Money and More, Inc., a Nevada Corporation based in Hemet, California. Judge Chooljian stayed the order for 10 days to allow Money and More an opportunity to appeal the ruling.
BPW invested $1,025,000 in October 2008 pursuant to a written contract with Money and More, Inc. Money and More agreed to keep BPW's funds in a segregated account and use them solely for extending payday loans in accordance with its business plan. Money and More runs a nationwide online payday loan service where it loans out $255 to its customers who agree to pay the loan back in two weeks, including repayment of the $255 principal plus a $45 transaction fee, which represents a return of approximately 35% per month. Money and More promised to pay BPW 10% per month on its investment.
BPW was to receive its first payment on November 19, 2008, but Money and More did not pay. Subsequently, BPW discovered that Money and More did not used the money invested for loans to customers, did not keep BPW's money in a segregated account and admitted that it was unable to repay BPW in accordance with the terms of the contract.
Counsel for Money and More argued that to grant the application for right to attach order would put Money and More out of business. However,in an affidavit filed in opposition to the application, the company admitted that it entered into the contract, it received the money from BPW as promised and defaulted on the agreement but claimed that the default was "due to circumstances beyond its control."
Judge Chooljian a made finding that BPW had established the "probable validity" of its claim upon which the attachment is based and met its burden of proving every element necessary to be granted a right to attach order.