MAZZONI CENTER v. LCF GROUP, INC., 2:24-cv-05921

Mazzoni Center, a non-profit healthcare provider in Philadelphia, faced severe cash flow problems and could not make payroll in September 2024.
The Executive Financial Officer, Rachelle Tritinger, without notifying her supervisor, entered into two merchant cash advance (MCA) agreements with LCF Group, Inc. and FundKite, both New York entities operating in the MCA industry.
Under these agreements, Mazzoni Center received immediate funds in exchange for a percentage of its future receivables, with agreements structured to appear as sales of receivables and not as loans.
When the Center learned of the agreements and funds were spent on payroll, Tritinger was terminated and the Center blocked further account access by defendants.
Defendants filed liens and withheld funds owed to the Center; litigation and arbitration commenced in New York.
Plaintiffs sued in Pennsylvania, seeking a temporary restraining order and preliminary injunction, arguing the agreements were usurious loans, unlawful under the RICO Act and New York law, and that Tritinger lacked authority.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Are the MCA agreements usurious loans under NY law?	Agreements are, in substance, unlawful usurious loans.	Agreements are lawful sales of future receivables, not loans.	Not loans; agreements are contingent, non-recourse, not usurious.
Did collection activity violate RICO?	Attempts to collect were unlawful debt/wire fraud under RICO.	No RICO violations; collections based on lawful agreements.	No RICO claim; no unlawful debt or racketeering found.
Can Mazzoni Center disavow the contracts based on Tritinger's authority?	Tritinger lacked actual and apparent authority to bind the Center.	Tritinger had, at minimum, apparent authority due to her role and documents; Center ratified agreement by spending funds.	Tritinger had apparent authority; Center also ratified by accepting funds.
Are Plaintiffs entitled to injunctive relief?	Irreparable harm from defendants’ liens and collection.	No likelihood of success on merits; no right to injunctive relief.	Injunction denied; Plaintiffs not likely to succeed on the merits.

LG Funding LLC v. United Senior Props. of Olathe, LLC, 181 A.D.3d 664 (N.Y. App. Div. 2020) (Usury cannot exist without a loan; benchmark rule for identifying usurious transactions)
Hallock v. New York, 474 N.E.2d 1178 (N.Y. App. Div. 1984) (Defines and applies the doctrine of apparent authority for agents binding principals)
Finger & Finger v. Buckingham Owners, Inc., 165 A.D.3d 887 (N.Y. App. Div. 2018) (Acceptance of benefits from contract constitutes ratification, even where authority is contested)
IRB-Brasil Resseguros, S.A. v. Inepar Invests., S.A., 83 A.D.3d 573 (N.Y. App. Div. 2011) (Ratification occurs when principal accepts benefits of an unauthorized contract)