In the Matter of Yellowstone Capital LLC, et al.

Analysis Group was retained on behalf New Jersey’s attorney general and Division of Consumer Affairs (New Jersey), the plaintiffs in a consumer fraud lawsuit. New Jersey alleged that Yellowstone Capital, a private equity firm, used deceptive and false advertising to mislead consumers (including many small businesses) into entering into merchant cash advance agreements (MCAs) that demanded “usurious” rates, lacked the necessary payment flexibility, charged hidden fees beyond what was disclosed in the terms of agreements, and placed unreasonably high burdens on consumers in the event of default. The state charged Yellowstone with violations of the New Jersey Consumer Fraud Act.

An Analysis Group team led by Managing Principal Gaurav Jetley supported academic affiliate Darius Palia of Rutgers Business School. Professor Palia consulted to the state on the damages framework and calculations of the at-issue MCAs.

The case eventually settled on terms favorable to New Jersey.