Settlement with Yellowstone Capital regarding MCAs

The OAG also sued:

• Delta Bridge Funding, also known as Cloudfund, which took over Yellowstone’s business in May 2021
• individual members of management
• individuals called “funders” who worked directly with merchants 

This lawsuit is ongoing. The OAG has not settled with any of these parties to the lawsuit. We do not know when this lawsuit will be resolved.

• The settlement has been signed by all parties: OAG, the Yellowstone companies, and the individuals.
• The settlement has been approved by the court and is now in effect.
• Under the settlement, all merchant debts to the Yellowstone companies are automatically canceled.

To learn more about the settlement, read the Attorney General’s press release. For complete details about the settlement, read the consent order and judgment.

Key updates will be posted on this web page.

Certain updates may be communicated by mail or email. To ensure you receive all communications, please provide your email address at the Rust website.

In the lawsuit, Yellowstone, Delta Bridge, and the individuals asked the court to dismiss all of the OAG’s claims

• The OAG opposed the requests, which are now pending before the court. We do not know when the court will rule on them.
• After the court rules on the requests, OAG will ask the court to rule on all remaining claims.
• Yellowstone is no longer part of the lawsuit, because it has agreed to the settlement. The lawsuit continues against Delta Bridge (Cloudfund) and the remaining individuals.
• For updates on the lawsuit, you can also check the court’s docket, which is public (case number 450750/2024).

• Check the top of your MCA contract and read the first paragraph of the contract. Sometimes the name at the top of the contract is a doing-business-as (DBA) name, and not the legal name.
• If you don’t have the contract, check old emails – but note that the person you were dealing with may have been an intermediary. The name of their business may be different from the company that actually provided the MCA.
• You can also check your business’s bank statement to see the name of the company debiting the account.
• To see if your MCA was issued by one of the Yellowstone companies, compare it to the list of Yellowstone companies.

For merchants with MCAs from any of the Yellowstone companies, the settlement does all of the following:

• automatically cancels all outstanding debt merchants owe to Yellowstone
• dismisses pending lawsuits against merchants
• vacates court judgments against some merchants
• terminates some UCC liens against merchants’ businesses and property

The settlement does not apply to MCAs with Delta Bridge or Cloudfund, or any other MCA company apart from the Yellowstone companies. See the full list. 

• If you owed a balance to any of the Yellowstone companies for an MCA, 100% of your debt has been canceled under the settlement.
• If you entered a settlement with Yellowstone based on an MCA agreement, and still have a balance on the settlement amount, that is canceled too.
• Your debt is canceled – whether it’s your business that is in debt to Yellowstone or it’s you personally who is a guarantor of the debt.

• No. If you have an outstanding balance to any Yellowstone company, based on an MCA agreement, your debt is automatically canceled under the settlement.
• As part of the settlement, Yellowstone is prohibited from taking any action to collect the debt, or from selling your debt to anyone else to collect.

• If you are a merchant with an outstanding balance to Yellowstone, Rust will notify you that your debt was canceled.
• Rust will send these notifications by mail or email, depending on the contact information Yellowstone had on file. You can enter your email address on the Rust website to be notified when the notices have gone out.

If Yellowstone has a court judgment against you or your business based on an MCA, you may be able to have that judgment vacated:

• If you paid the full amount of a judgment against you, and Yellowstone notified the court that you no longer owed anything, your judgment was satisfied. If this happened, you cannot have it vacated as part of Yellowstone’s settlement with OAG.
• If the judgment was not satisfied, Yellowstone will apply to vacate it as part of the settlement.
• If you do not know whether Yellowstone has a court judgment against you or whether it was satisfied, you can visit the New York Courts’ website and search for the name of your business.
• Rust will send you a notice by mail or email if our records indicate that Yellowstone has an unsatisfied judgment against you or your business. Provide your email address on the Rust website to be notified when the notices have gone out.
• To ensure Yellowstone files papers to vacate a judgment against you or your business, follow the instructions in the notice promptly.

If Yellowstone still has a lien against you or your business or assets, you are eligible to have the lien terminated under the settlement:

• Yellowstone is terminating liens only upon request. Rust will send you a notice by mail or email if our records indicate that you had an outstanding balance to Yellowstone. Provide your email address on the Rust website to be notified when the notices have gone out.
• To have a pending lien terminated, follow the instructions in the notice promptly.
• UCC liens typically expire automatically after five years. If Yellowstone’s lien is more than five years old, it may have already lapsed, in which case you do not need to do anything.
• New York merchants may be able to check whether Yellowstone has a lien against them, and whether it has lapsed, by searching the name of their business on the New York Department of State’s UCC Lien Filing System. Note this database may not reflect all liens held by Yellowstone or one of its subsidiaries. Merchants located elsewhere may be able to access similar databases provided by the state where they are located.

Through this settlement, OAG has collected $16.1 million. Most of this amount will go to relief for affected merchants. That’s on top of $3.37 million already collected through earlier settlements with other Yellowstone individuals. We may secure more funds through litigation against the remaining companies and individuals, and potentially other settlements.

• We do not yet know how much will be available to distribute, or who will qualify.
• If you want to receive updates about restitution payments, provide your email address on the Rust website.
• Because we hope to collect additional funds from the remaining companies and individuals, we do not yet know how much will be available to distribute, or when payments will go out.

The Yellowstone companies, and the two executives who are part of the settlement, are: 

• permanently barred from the MCA industry 
• required to cooperate in OAG’s ongoing lawsuit, and in any other OAG investigation concerning MCAs

Yellowstone has agreed to cancel all MCA debt and to stop all collection efforts related to its MCAs.

• If someone is contacting you about your Yellowstone debt, or you are having another problem with your Yellowstone MCA, file a complaint on the OAG website. 
• For relief under the settlement — such as vacating judgments, terminating liens, and monetary relief — visit the Rust website, not OAG.

You may have legal rights against Yellowstone. The settlement with Yellowstone does not affect any individual right you might have to sue Yellowstone yourself. 

• If you have questions about your legal rights against Yellowstone, contact your own lawyer.
• The OAG cannot provide any legal advice. Do not contact OAG for legal advice. 
• If someone contacts you about your Yellowstone debt, or if you are having another problem with your Yellowstone MCA, file a complaint with OAG.

The OAG has asked the court to rule that MCAs from Delta Bridge (Cloudfund) are illegal loans, and to order them to stop collecting payments. But the court has not yet ruled on that request. In any case, the court’s ruling will apply only to Delta Bridge MCAs – not to MCAs from other companies.

• If you are having problems with your MCA from Delta Bridge (Cloudfund) or another company, file a complaint with OAG. Include as much detail as possible. Attach all relevant documents.
• You may want to consult an attorney about any legal rights you may have against Delta Bridge or another MCA company. Questions about whether to continue making payments on an MCA should be directed to your attorney.
• The OAG cannot act as your lawyer or provide any legal advice.

Statements and evidence from victims can be very helpful to proving deception and fraud.

If you had an MCA from Yellowstone or Delta Bridge (Cloudfund), and would like to provide a statement or evidence for the court, fill out a complaint form on the OAG website:

• Please include as much detail as possible.
• Attach all relevant documents you have available – like your MCA agreements with Cloudfund or Yellowstone, payment records, and email or text correspondence.  
• If the form does not let you upload all your information, write in your complaint that you have more documents to provide. We will contact you to follow up.