Background Information

In 1962 IBAR Partnership was formed by Raymond G. Schultz PhD and Robert E. Schultz PhD.  Under this partnership, forensic economic testimony and valuation services were provided to legal community for litigation matters involving economic disputes.  In 1969 IBAR Incorporated was formed and continued to perform the same services provided by the earlier partnership.

In 1977, IBAR Inc. became involved in the emerging structured settlement industry.  Prior to IBAR Inc.’s entry into this area, all structured settlements utilized in the settlement of personal litigation required that the defendant purchase and own an annuity contract which would then pay the future periodic payments to the plaintiff.  One very significant drawback for the defendant under this arrangement was that the defendant remained the owner of the annuity policy and therefore responsible to the plaintiff for the future payments.  In other words the claim file remained open until the death of the plaintiff or until the end of the annuity period.  The defendant’s ability to assign its liability for the future periodic payments and thereby terminate any continuing liability was hampered by the absence of internal Revenue Service ruling or regulations which addressed the assignee’s potential tax liability.

IBAR Inc. was instrumental in resolving this predicament in 1980.  At that time IBAR Inc. applied to the Internal Revenue Service for a private letter ruling to determine the tax treatment of a third party assignee responsible for making future periodic payments to the plaintiff.  IBAR Inc. pursued the ruling on behalf of the United States Justice Department which was attempting to settle a sensitive claim involving several foreign nationals.  The final ruling provided for favorable tax treatment for the third party assignee.  For the first time a defendant found itself able to assign its full and complete liability to a third party.

Relying on this and other rulings, IBAR Inc. began a successful campaign to introduce Federal legislation designed to codify federal and state regulations with regard to structured settlement payments.  Ultimately H.R. 5470, which was known to many of the legislators as the “IBAR Bill”, was passed by Congress and signed into law in January 1983.  With its passage, H.R. 5470 became Section 130 of the Internal Revenue Code.  Many life insurance companies responded to the passage of this powerful piece of legislation by creating entities within their own corporate structures capable of accepting an assignment of liability from the defendant.

 Following the acquisition of IBAR Inc. by Merrill Lynch in 1982, a new and separate corporation, IBAR Settlement Company, was formed in 1984.  IBAR Settlement Company performs services provided by the earlier organization and has expanded its settlement services as a result of certain changes to the Internal revenue Service Code as well as recently passed Federal tax legislation.  All of the services provided by IBAR Settlement Company, included the more recently created Special Needs Trust, are described in greater detail in the “Special Needs Trust” portion of this web site.