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Lenders press lawmakers to restore limited prejudgment remedy for large merchant‑cash advances; opponents urge caution
Summary
A contentious public hearing explored whether Connecticut should allow merchant‑cash‑advance companies to use extradudicial assets freezes — prejudgment remedies (PJR) — in cases involving smaller financing amounts.
The Joint Committee on Banking heard sharply divided testimony on proposals to change Connecticut’s prejudgment‑remedy law for commercial transactions after MCA funders asked the Legislature to allow PJR attachments in smaller cases.
Representative Jonathan Jacobson, a longtime Connecticut litigation attorney who testified on the danger side, told the panel that the statute MCA funders are seeking to change — codified as part of the General Statutes and discussed at the hearing as §36a‑868 — was intentionally designed to limit ex‑parte civil attachments for commercial financing below a high dollar threshold. Jacobson testified “I would respectfully urge my colleagues on this committee to vote against this bill,” arguing that the Merchant Cash Advance industry has both rapid…
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