Judgment Marketplace has attracted quite a bit of attention in the media recently. First, a well publicized judgment against Kim Kardashian was put up for sale on the site. Then, the even more famous wrongful death judgment against O.J. Simpson was listed. Now, there is another piece of news that is making waves in the legal community as well as the mass media -the aforementioned judgment against Kim Kardashian has sold for $5,000.
What makes this case so unusual is not simply that the judgment was put up for sale and purchased by an investor. The fact is, the total value of this judgment, including interest, was $3,504.01. Yet the purchaser paid $5,000, which is more than the principle and interest combined. In fact, the selling price turned out to be more than three times the principle of $1,605.73!
Anyone who is familiar with this type of transaction knows that judgments typically sell for only pennies on the dollar. The usual procedure is for an investor to take a chance on a judgment (or, as is often the case, a group of them), buy it at a bargain price, and hope to collect in the future. It’s not only unusual, but unprecedented for a judgment to sell for more than its total value!
Why did this happen? A lot of it probably has to do with the fame of the debtor, Kim Kardashian. Owning anything related to a major celebrity has value as a collector’s item and conversation piece. Yet it also says something about the potential value of judgments in general. Judgments always increase in value due to the accumulation of interest. So it is still possible that the Kardashian judgment will end up being worth more than the $5,000 that the buyer paid for it. On the other hand, judgments do have an expiration date, so whoever holds one is in a race against the calendar to collect.
The recent and fast sale of the Kim Kardashian judgment reveals that the marketplace for judgments is becoming more active and that people are starting to understand the opportunity that this type of investment represents. It also provides sellers -the people stuck with unpaid judgments- a convenient way to make money rather than waiting around for years in the hope that the debtor will finally pay. While the Kim Kardashian case was exceptional in many ways, it showcases a growing trend that is bringing buyers and sellers of judgments together.