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Mazzoni Center settled litigation with New York firms over high-cost payroll financing last year

Terms of the settlements were not disclosed. Mazzoni owed about $1 million.

The Mazzoni Center, on the 1300 block of Bainbridge Street, settled litigation over a high-cost financing used last year to make payroll during a cash crunch. The center is shown here in 2018.
The Mazzoni Center, on the 1300 block of Bainbridge Street, settled litigation over a high-cost financing used last year to make payroll during a cash crunch. The center is shown here in 2018.Read moreJESSICA GRIFFIN / Staff Photographer

Mazzoni Center, Philadelphia’s largest LGBTQ health center, has settled litigation with two New York firms over high-cost financing it used last year to make payroll during a cash crunch.

Terms were not disclosed.

The center had received $234,570 from LCF Group and agreed to pay $362,500. It also got $479,815, with an agreement to pay $690,000, from FundKite. Former Mazzoni executive financial officer Rachelle Tritinger initiated both transactions, known as merchant cash advances, in September.

After Mazzoni blocked scheduled automatic payments from its bank account, LCF and Fundkite filed liens that prevented Mazzoni from receiving payments from health insurers and others.

Mazzoni’s argument in court was that the contracts were invalid because the sizes of the transactions exceeded Tritinger’s authority.

“These matters have been resolved to everyone’s satisfaction. There was no victory on either side,” Mazzoni spokesperson David Weisberg said Friday.

Fundkite and LCF did not respond to requests for comment.

The settlement followed a March 27 decision by an independent arbitrator to award Fundkite $783,243.

» READ MORE: Mazzoni Center has an interim CEO after resignation of Sultan Shakir.

During oral arguments last year, judges repeatedly seemed skeptical of Mazzoni’s arguments that the cash-advance contracts were invalid, given that the nonprofit needed the money to meet payroll.

During a December hearing in the New York Supreme County in New York City, Justice Alexander Tisch rejected the suggestion that Tritinger had gone “rogue,” as a lawyer for Mazzoni claimed.

“Obviously, she went into the deal because they needed the money to function,” Tisch said, according to a hearing transcript.

Staff writer Abraham Gutman contributed to this article.