MSP Recovery enters term sheet for sale of $275M worth of healthcare claims

MSP Recovery, which recently announced that it will begin doing business as LifeWallet in 2023 and that its ticker symbol will change to "LIFW" at the beginning of 2023, announced that the company entered into a term sheet relating to the sale of a portion of its company owned Assignor Interests, as defined and as further described below, and certain other transactions. In the ordinary course of its business, LIFW acquires assignments of recoveries from health insurance payors, healthcare providers and others, and uses its proprietary multi-level data analytics system to identify and then works to secure recoveries from responsible parties. LIFW typically obtains the assignment of all of the claim rights and pays out 50% of such recoveries as a contingent payment and retains the other 50%. In certain circumstances, LIFW has acquired the assignor’s 50% interest up-front by purchasing the assignor’s contractual right to collect at the time of recovery. LIFW has been able to establish a price for these purchases that to the benefit of LIFW by monetizing these claims at a much higher rate than paid by the company, LIFW announced that it entered into a Term Sheet relating to the sale of $275M worth of select healthcare claims recovery interests and the receipt of another $48M in servicing fees related to the MSP Claims that LIFW is selling, therefore indicating that these claims, upon signing the definitive documents described herein, will be monetized at a much higher rate than they are purchased for. The Term Sheet also provides for the company to acquire certain claims for $330M that pertain to the entire claim rights, as well as certain Assignor Interests. LIFW also announced that it is in negotiations to sign contracts that the company expects would generate approximately $25M-30M during the 2023 fiscal year with respect to the previously announced launch of its national lawyer referral service on the LifeWallet platform from lawyers seeking to participate and have access to this innovative service. In addition to patients, medical providers and healthcare payers, the LifeWallet application will also provide resources for attorneys and their clients, facilitating the processing of claims by lawyers that ultimately may also represent beneficiaries who have suffered physical or mental injuries for which Medicare or Medicaid has paid.