Crunch Time: John Ruiz's LifeWallet Delays Annual Report, $60 Million Payment

Are more stormy waters ahead for the brainchild of prolific attorney and Miami Hurricanes benefactor John Ruiz?

Ruiz's company MSP Recovery saw its market valuation sink by roughly $30 billion in one week last year, in one of the most savage post-IPO collapses in recent stock market history. The company, which operates in the medical claims recovery business, has since rebranded as LifeWallet, expanded its collegiate marketing deals, and promoted a suite of new pilot products, all with an eye toward staying afloat.

Last week, the company revealed it was delaying the filing of its 2022 annual report, another curveball for queasy shareholders. LifeWallet said its management "needs additional time to finalize and analyze the disclosure" in the report.

"The company is negotiating amendments to certain material agreements and evaluating the accounting and related disclosures," LifeWallet said in a March 31 late-filing notice that gives the company an additional 15 days to submit the report.

After the notice, the stock continued to tank, losing another 25 percent of its share value over the last five days.

Among the company's upcoming financial obligations is a $60 million payment to senior healthcare provider Cano Health, which is due one day before the filing of the annual report. If LifeWallet doesn't file the report by the end of April, the money owed would become due immediately on April 30, according to a Cano Health public filing.

LifeWallet has the option of paying the $60 million in cash or stock, though it has signaled that the latter option is likely. If it compensates Miami-based Cano in stock and Cano looks to liquidate the holding, it could put more pressure on the share price, especially in light of the stock's relatively thin daily trading volume as of late.

Ruiz's company listed $14 million in cash on its books at the time it filed its previous quarterly report.

LifeWallet said on March 29 that it had secured a credit agreement that will provide working capital in the amount of $48 million subject to certain milestones. The announcement also detailed a series of claim recovery rights deals.

"Collectively, these transactions demonstrate the significant value in our assets and the future of our company," Ruiz said in a media release.

When he resigned in fiery fashion from Cano Health's board last week, Miami Beach billionaire and Starwood Capital CEO Barry Sternlicht criticized Cano's transactions with LifeWallet, saying they were an example of poor management decisions on the part of Cano. The deals involved assignment of medical claims to LifeWallet in exchange for compensation (e.g. the $60 million payment).

Ruiz responded that the deals "should be gravy for them" and that Sternlicht "doesn't understand how it works" and "the value behind" the transactions.

LifeWallet's late filing notice coincided with recent headlines tackling Ruiz's role in the dawn of collegiate athlete marketing. As the Miami Hurricanes men's basketball team reached their first-ever Final Four, Ruiz and LifeWallet were in the wings, with name-image-and-likeness (NIL) agreements in place with four star players.

Over the last year, the attorney and owner of Cigarette Racing has emerged as a leader in the NCAA's burgeoning NIL industry, reportedly investing around $12 million to $14 million in NIL deals for 165 University of Miami athletes. Most notably, UM point guard and Kansas State transfer Nijel Pack inked a two-year $800,000 NIL deal with LifeWallet.

On April 5, Ruiz, one of UM's most prominent alumni, pushed back at criticism from a sports analyst who was questioning LifeWallet's ability to make its payment obligations.

"Really simple, business as usual. Those that make comments want to make themselves feel relevant. LifeWallet has never missed and won't miss a payment to players. Market cap still at 2.3 [billion]... Do you really think someone that has true net worth is fixated on someone else?" Ruiz said on social media in response to an analyst's comments.

Ruiz, a onetime television lawyer who hosted the Spanish-language program "La Ley" ("The Law"), made waves as an attorney in foreclosure law, personal injury cases, class action lawsuits, and insurance litigation.

He also owned La Ley Sports, an outfit that broadcast youth sports and had dreams of turning an old baseball stadium in Homestead into a state-of-art sports venue before the deal devolved into a messy court battle, with claims lodged of unpaid rent and utility bills. The project may have portended Ruiz's grander dream of building a new Hurricanes stadium and sprawling commercial complex at Tropical Park.

In a recent Boating International magazine interview, Ruiz is described as a "yachtsman, inventor, trial attorney and pioneer in healthcare data analytics applied to the field of law." He recounts his passion for cigarette boats and his affinity for zipping across the waters off the coast of Miami in high-speed vessels.

He founded MSP Recovery in 2014, which specializes in medical bill collections against auto insurers or other primary payers that fail to foot the bill for treatment of an injured patient, shifting the burden to Medicare, Medicaid or a private entity. The company's legal team, with Ruiz at the helm, has won a series of appeals court judgments that Ruiz says opened the door for the company to make ever-larger recoveries.

"We process data and we find where payers pay when they otherwise don't have responsibility to pay," Ruiz tells New Times, explaining the business model. "So once we identify the claim rates, at that point in time, we know what the dollar figure is... and we make an offer to buy those claim rights."

MSP Recovery's growth culminated in a $32.6 billion valuation when it went public in May 2022 via a special purpose acquisition company (SPAC) merger with Lionheart Acquisition Corp. II. Investors had high hopes for MSP as it had projected the value of potentially recoverable claims at $15 billion as of September 30, 2021.

In the nine months ending September 30, 2022, the company hauled in a tiny fraction of that sum, raking in $21.79 million in revenue.

MSP formally rebranded as LifeWallet in December 2022 after a brutal year for shareholders. As part of the rebrand, the company promoted new patient-centered healthcare products and a blockchain-based tool that it says will help process claims data more efficiently. On April 5, the company announced "significant enhancements to its growing LifeWallet Health ecosystem," including a new portal for healthcare providers.

Since mid-March, the share price has remained languishing below $1. As of noon on Thursday, April 6, the share price sat at 65 cents. If it stays below $1 for 30 consecutive business days, it's in danger of delisting from the NASDAQ.