In the suit filed by Prosper Marketplace against Greennwich Insurance Company, Judge Kramer of the Superior Court of California – County of San Francisco has GRANTED the application for approval of complex designation, which was filed August 21, 2009.

Additionally, Judge Kramer ordered that this entire action be assigned for all purposes to the Complex Litigation Department.

Those already following the class action litigation filed by Prosper lenders will note that this is the very same Judge Kramer who is overseeing the lender litigation.  In other words, as the insurance litigation is related to the lender suit, Judge Kramer will be handling both.

A case management conference has been scheduled for April 9, 2010.

Background information available here.

Prosper has made much about the recent addition of Mr. Nigel Morris to its board - and the $1 million he brought along to the party.

As has already been noted by observers with deeper insight into the mechanics of all things Prosper, this cash infusion is little more than a minor bridge-loan, priced at a relatively steep 15% interest.  It is rather unclear how this fairly insignificant loan will impact Prosper’s future or delay what appears to be the inevitable demise of the company, as it continues on track to run out of operating funds in the near term.

On November 16, 2009, Prosper filed a 10-Q document with the Securities and Exchange Commission, which provides interesting insight into Prosper’s financial health.  Based on what is known about Prosper cash burn, the recent cash-infusion only buys Prosper an additional couple of months, with Prosper now expected to go broke in February 2010.

Despite the lackluster pace of new loan originations, there is some sense that there is still some potential value yet to be unlocked in this company.  What also remains unclear, however, is the extent to which Prosper is in a position to attract additional investments on favorable terms to operate beyond February 2010, considering the general current economic climate, the uncertainty regarding the viability of Prosper as a going concern, the current regulatory framework and Prosper’s situation with unresolved litigation.

Prosper-watcher Fred93 recently published a notable item on his blog, titled “Prosper.com Paradise Lost; Deadbeats Won.”  While Fred93’s summary of a meeting in Los Angeles between Prosper co-founder Chris Larsen and a number of lenders and borrowers may seem oddly trivial to those not intimately familiar with Prosper, Fred93 uses this meeting as a backdrop to highlight important nuances related to the Prosper experience. 

Set against this backdrop, Fred93 proceeds to dissect the lackluster efforts of Prosper’s Vice President of Operations, Doug Fuller, including his infamous “Big Hat, No Cattle” memo and the dismal failure of Prosper’s secret “legal test strategy.”

Few people are as intimately familiar with Prosper.com as Fred93.  His blog is a must-read and, if you decide to only read ONE blog post about Prosper Marketplace, then this should be the one you read.

Fred93’s shocking blog entry can be found here.

Then, join the discussion taking place at Prospers.org.

Things are quiet on the litigation front, but there was another procedural development today in the sidebar where Prosper Marketplace has filed suit against Greennwich Insurance Company.  Earlier today, Greennwich filed their Answer to First Amended Complaint with the Superior Court of California.

View the docket information here.

Some additional background here.

Prosper-watcher Xraider reports  on a new development in the ongoing litigation involving Prosper Marketplace.

Prosper, through another fancy (read: expensive) San Francisco law firm, has brought a breach of contract and “bad faith” suit against its insurer, Greenwich, for refusing to defend it in the class action. 

Ongoing discussion on this matter can be found at Prospers.org.

You can access the court docket info here.

There was court action yesterday in the class action lawsuit against Prosper Marketplace (Prosper.com). As Prosper-watcher Investar points out here, Judge Kramer sustained the demurrer filed by the 3 remaining outside directors – this time without leave to further amend. A case mangement conference (CMC) was held – and the next CMC scheduled for October 29, 2009.

(or something along those lines..)

In preparation for next week’s action in the Superior Court of California, Prosper’s outside directors have filed a reply brief in response to the August 26 opposition memo filed by the plaintiffs, which was filed in response to the August 10 demurrer to the second amended complaint of July 10, 2009.

The actual document is not yet available for download and, based on our experience with the Court’s web site, it’s difficult to tell if it will, at some point, be made available at all.

That said, it is always good to note progress in this case and we look forward to an interesting week.

There are reports today that Prosper Marketplace (Prosper.com) has suspended the user accounts of the plaintiffs named in the proposed class action suit filed against Prosper.

It is not surprising that Prosper (the ”North Korea of peer-to-peer lending”) yet again attempts to punish (if that’s what you would call being protected from making new loans) or stifle critical voices.  It is also not surprising that it took ever-efficient Prosper close to 10 months to get around to it.

Earlier today, plaintiffs filed their answer to the August 10 demurrer filed by the outside directors in response to the Second Amended Complaint, which was filed by the plaintiffs on July 10.

The file has not yet become available to the public via the Court’s web site.

The next hearing in the case still appears to be scheduled for September 15, 2009.

This is video from the “Town Hall” meeting at Prosper Days 2007

This is video from the “Town Hall” meeting at Prosper Days 2008