<PAGE>
    AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 14, 1997

                                                   REGISTRATION NO. 333-________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          ---------------------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

                          ---------------------------
 
                         J.G. WENTWORTH & COMPANY, INC.
             (Exact name of registrant as specified in its charter)

                          ---------------------------
 
         DELAWARE                     6162                   23-2927741
      (State or other          (Primary Standard          (I.R.S. Employer
      jurisdiction of              Industrial            Identification No.)
     incorporation or         Classification Code
       organization)                Number)
 
                              THE GRAHAM BUILDING
                           15TH AND RANSTEAD STREETS
                                   10TH FLOOR
                             PHILADELPHIA, PA 19102
                                 (215) 567-7660
              (Address, including zip code, and telephone number,
       including area code, of registrant's principal executive offices)

                          ---------------------------
 
                                JAMES D. DELANEY
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                         J.G. WENTWORTH & COMPANY, INC.
                              THE GRAHAM BUILDING
                           15TH AND RANSTEAD STREETS
                                   10TH FLOOR
                             PHILADELPHIA, PA 19102
                                 (215) 567-7660
           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                          ---------------------------

                                With copies to:
 
         JASON M. SHARGEL, ESQ.                 JAMES R. TANENBAUM, ESQ.
       RICHARD P. PASQUIER, ESQ.             STROOCK & STROOCK & LAVAN LLP
WOLF, BLOCK, SCHORR AND SOLIS-COHEN LLP             180 MAIDEN LANE
     TWELFTH FLOOR PACKARD BUILDING             NEW YORK, NY 10038-4982
         111 SOUTH 15TH STREET                       (212) 806-5400
      PHILADELPHIA, PA 19102-2678
             (215) 977-2000
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:  As promptly as practicable after the effective date of this
Registration Statement.
 
    If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                          ---------------------------
 
                        CALCULATION OF REGISTRATION FEE
 
<TABLE>
<CAPTION>
                                                                 PROPOSED           PROPOSED
                                                 AMOUNT          MAXIMUM            MAXIMUM          AMOUNT OF
    TITLE OF EACH CLASS OF SECURITIES            TO BE        OFFERING PRICE       AGGREGATE        REGISTRATION
             TO BE REGISTERED                REGISTERED (1)   PER SHARE (2)    OFFERING PRICE (2)       FEE
    ---------------------------------        --------------   --------------   ------------------   ------------
<S>                                          <C>              <C>              <C>                  <C>
Common Stock,
  $.01 par value..........................     6,079,749          $16.00          $97,275,984        $29,477.57
</TABLE>
------------ 
(1) Includes 793,011 shares which the Underwriters have a right to purchase to
    cover over-allotments, if any.

(2) Estimated pursuant to Rule 457 solely for the purpose of calculating the
    registration fee.

                          ---------------------------

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective.  This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

                SUBJECT TO COMPLETION -- DATED OCTOBER 14, 1997
PROSPECTUS
--------------------------------------------------------------------------------
 
                                5,286,738 Shares
 
[LOGO]                   J.G. WENTWORTH & COMPANY, INC.
 
                                  Common Stock
 
--------------------------------------------------------------------------------
 
Of the shares of Common Stock, par value $.01 per share (the 'Common Stock'),
offered hereby (the 'Offering'), 4,000,000 shares are being sold by J.G.
Wentworth & Company, Inc. (the 'Company') and 1,286,738 shares are being sold by
certain selling stockholders (the 'Selling Stockholders'). The Company will not
receive any of the proceeds from the sale of shares by the Selling Stockholders.
See 'Principal and Selling Stockholders.'
 
Prior to the Offering, there has been no public market for the Common Stock of
the Company. It is currently anticipated that the initial public offering price
per share will be between $14.00 and $16.00. See 'Underwriting' for a discussion
of the factors to be considered in determining the initial public offering
price. Application has been made to have the Common Stock approved for inclusion
in The Nasdaq Stock Market's National Market (the 'Nasdaq National Market')
under the symbol 'JGWC.'
 
SEE 'RISK FACTORS' ON PAGES 8 TO 17 FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
 
--------------------------------------------------------------------------------
 
 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
      EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
          SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
            COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
         PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
                                   OFFENSE.

                                 Underwriting                      Proceeds to
                  Price to      Discounts and     Proceeds to        Selling
                   Public       Commissions(1)     Company(2)      Stockholders
               --------------   --------------   --------------   --------------
Per Share....        $                $                $                $
Total(3).....   $                $                $                $

------------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
    several Underwriters against certain liabilities, including liabilities
    under the Securities Act of 1933. See 'Underwriting.'
 
(2) Before deducting expenses payable by the Company estimated to be $1 million.
 
(3) The Selling Stockholders have granted the Underwriters a 30-day
    over-allotment option to purchase up to 793,011 additional shares of Common
    Stock on the same terms and conditions as set forth above. If all such
    additional shares are purchased by the Underwriters, the total Price to
    Public will be $        , the total Underwriting Discounts and Commissions
    will be $        , the total Proceeds to Company will be $        and the
    total Proceeds to Selling Stockholders will be $        . See
    'Underwriting.'
--------------------------------------------------------------------------------
 
The shares of Common Stock are offered by the several Underwriters subject to
delivery by the Company and the Selling Stockholders and acceptance by the
Underwriters, to prior sale and to withdrawal, cancellation or modification of
the offer without notice. Delivery of the shares to the Underwriters is expected
to be made at the office of Prudential Securities Incorporated, One New York
Plaza, New York, New York, on or about         , 1997.
 
PRUDENTIAL SECURITIES INCORPORATED
                                        OPPENHEIMER & CO., INC.
                                                                     FURMAN SELZ
 
             , 1997

<PAGE>
     CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES OF
COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE 'UNDERWRITING.'
 
                                       2

<PAGE>
                               PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the Combined Financial
Statements of the J.G. Wentworth Affiliated Companies and the Notes thereto
appearing elsewhere in this Prospectus. Except as otherwise indicated, all
information in this Prospectus gives effect to the following transactions which
will occur on or before completion of the Offering (collectively, the
'Reorganization') pursuant to which: (i) the limited partners of J.G. Wentworth
MFC Associates, L.P., a Delaware limited partnership ('MFC'), and J.G. Wentworth
S.S.C. Limited Partnership, a Delaware limited partnership ('SSC' and,
collectively with MFC, the 'Partnerships'), will contribute all of their limited
partnership interests in the Partnerships to the Company; (ii) the shareholders
of J.G. Wentworth Funding Corp., a Pennsylvania corporation ('MFC Funding'), and
J.G. Wentworth Structured Settlement Funding Corporation, a Delaware corporation
('SSC Funding'), the respective general partners of the Partnerships
(collectively, the 'General Partners'), will contribute all of the capital stock
of the General Partners to the Company; and (iii) the shareholders of J.G.
Wentworth & Company, Inc., a Pennsylvania corporation ('JGW'), and SSC
Management Company, Inc., a Pennsylvania corporation ('SCC Management' and,
together with JGW, the Partnerships and the General Partners, the 'J.G.
Wentworth Affiliated Companies'), will contribute all of the capital stock of
JGW to the Company; each in exchange for the issuance by the Company of shares
of Common Stock. See 'The Reorganization and Change in Tax Status' and the
Combined Financial Statements of the J.G. Wentworth Affiliated Companies and the
Notes thereto. Unless the context otherwise requires, (a) all references herein
to the 'Company' refer to the J.G. Wentworth Affiliated Companies on a combined
basis, (b) all references herein to the Company's activities, financial
condition or results of operations refer to those of the J.G. Wentworth
Affiliated Companies, taken as a whole and (c) all information in this
Prospectus assumes that the Underwriters' over-allotment option will not be
exercised.
 
                                  THE COMPANY
 
     The Company is a specialty finance company that originates, securitizes and
services rights to receive payments from structured settlements and other
deferred payment obligations. Deferred payment obligations are contractual
arrangements under which one party has agreed to make fixed, scheduled payments
to another party over time to satisfy an obligation that would otherwise be paid
in an up-front, lump sum. The Company specializes in transactions involving two
types of deferred payment obligations: (i) structured settlements arising from
personal injury litigation as to which highly-rated insurance companies are the
obligor, and, to a lesser extent, (ii) other deferred payment obligations such
as claims arising from personal injury litigation and state-operated lotteries
as to which governmental or quasi-governmental entities are the obligor.

     According to industry sources, in excess of $40 billion of annuity premiums
paid to third parties to fund structured settlements were generated from 1980 to
1995 and approximately $4 billion to $5 billion in new structured settlements
are generated each year in the United States. Structured settlements continue to
be an attractive option for claimants and insurance companies because structured
settlements: (i) offer favorable tax treatment; (ii) permit payment flexibility
and incorporation of investment management features; and (iii) lower the cost of
compensating victims and thereby help foster timely settlement of litigation.
From the claimants' point of view, however, structured settlements have a
significant weakness, inflexibility. When claimants' financial needs change, the
fixed payment schedule of a structured settlement may no longer satisfy these
needs. The Company's funding programs offer those claimants the ability to
convert their rights to future payments into cash that they can use for such
purposes as paying medical or tuition expenses, purchasing or improving a home,
starting a business or repaying debt.
 
     The Company has achieved significant growth in the number and maturity
value of receivables purchased since commencing operations. From inception to
June 30, 1997, the Company has purchased 14,022 deferred payment obligation
receivables with an aggregate maturity value of $374.8 million.
 
                                       3
<PAGE>
Maturity value equals the sum of all future payments to be received under a
deferred payment obligation. The Company has generally purchased receivables at
a significant discount from maturity value. The difference between the amount
paid by the Company and the maturity value of the receivables is accrued as
income over the life of the receivable. The weighted average yield of the
Company's portfolio was 22.5% for the six months ended June 30, 1997. The
Company's revenues have increased significantly as the Company's originations
volume and portfolio have grown and the Company has employed securitizations to
fund its operations. Revenues increased from $249,000 in 1992 to $11.8 million
in 1996 and $20.5 million in the six months ended June 30, 1997.
 
     In June 1997, the Company completed a $70.8 million securitization in what
it believes is the first investment grade rated securitization of structured
settlement receivables. The Company sold, through a special purpose entity,
$59.5 million of senior pass-through certificates rated 'A2' by Moody's
Investors Service, Inc. ('Moody's') and 'A' by Duff & Phelps Credit Rating Co.
('Duff & Phelps'). The Company retained $11.3 million in face value of unrated
subordinated certificates and recorded a Gain on Sale (as defined herein) of
$11.3 million for the six months ended June 30, 1997. The Company completed a
securitization transaction in which it sold $31.0 million of receivables in
September 1997 and $41.0 million of receivables in October 1997, and recorded a
Gain on Sale of $6.8 million and $8.0 million, respectively. Structured
settlement receivables and other deferred payment obligations differ from other
regularly securitized financial assets, such as consumer credit cards and
mortgage loans, in that (i) prepayment risk is minimal because the timing of
scheduled payments is fixed and (ii) credit risks are low because obligors are
typically insurance companies that have received a credit rating of 'A' or
better from A.M. Best or are governmental entities. From inception through
December 31, 1996, the Company had not charged-off any receivables. For the six
months ended June 30, 1997, the Company recorded a net charge-off of 0.7% of the
Company's average owned portfolio.

     The Company does not rely on brokers to originate structured settlements
and other deferred payment receivables and its policies prohibit the 'cold
calling' of prospective customers. Instead, the Company utilizes a nationwide
television advertising campaign to identify hard-to-find claimants who want to
sell their payment rights to the Company. Using a 21,520-square-foot call
center, the Company's originations staff responds to claimant inquiries,
attempts to quantify an individual claimant's financial needs and endeavors to
structure the funding transaction to meet those needs. The Company's policies
prohibit the origination of receivables from minors and incompetent persons.
 
     The Company's growth strategy is to increase its originations of deferred
payment receivables and profitability by further enhancing its position as the
leading originator of the rights to receive payments from structured settlements
and other deferred payment obligations. To achieve its goals for profitable
growth, the Company intends to continue to: (i) increase retail originations
through its nationwide targeted television advertising campaign; (ii) provide
quality customer service by continuing to qualify and structure transactions
based on the needs of the claimant through the Company's trained marketing,
underwriting and servicing personnel; (iii) maintain stringent underwriting
standards to minimize the risks of claimant fraud; (iv) market to referral
sources such as attorneys and bankruptcy and estate trustees; (v) obtain
institutional financing and complete regular securitizations of its receivables;
(vi) maintain its state-of-the-art information management systems; and (vii)
expand into new deferred payment market niches through internal growth and
possible acquisitions.
 
     The Company was formed in October 1997 in connection with the
Reorganization as a successor to the businesses of the J.G. Wentworth Affiliated
Companies. See 'The Reorganization and Change in Tax Status.' JGW was formed by
James D. Delaney and Gary Veloric in 1991 as a merchant bank specializing in
transactions in the healthcare industry. In 1992, the Company entered the
business of purchasing the deferred settlement obligations of the New Jersey
Full Insurance Joint Underwriting Association ('JUA'), and its successor, the
New Jersey Market Transition Facility ('MTF'). As the Company's success in the
JUA/MTF market established its reputation as a creative funding source, it began
to search for other opportunities to purchase income streams that, while secure
and predictable, did not meet the requirements for more traditional means of
financing. After evaluating a number of market possibilities, the Company
decided in 1995 to enter the secondary market for structured
 
                                       4
<PAGE>
settlements. By using the capabilities and systems it developed for the JUA/MTF
business, the Company emerged as a market leader in the business of purchasing
structured settlements. In May 1995, ING (U.S.) Capital Corporation (together
with its affiliates, 'ING') extended a credit facility to the Company to fund
its originations of other deferred payment obligations. In August 1995, the
Company and ING expanded their relationship to include funding the acquisition
of structured settlement receivables, at which time ING became a stockholder of
the Company.
 
     The Company's principal executive office is located at The Graham Building,
15th and Ranstead Streets, 10th Floor, Philadelphia, PA 19102, and its telephone
number is (215) 567-7660.

                                  THE OFFERING
 
Common Stock Offered by the         4,000,000 shares (1)
  Company..........................
 
Common Stock Offered by the Selling 1,286,738 shares (1)
  Stockholders.....................
 
Common Stock to be Outstanding      16,466,667 shares (2)
  after the Offering...............
 
Use of Proceeds.................... To pay a cash tax distribution to certain of
                                    the Company's stockholders, to pay down
                                    outstanding amounts on the Credit Facilities
                                    (as defined herein) and for other general
                                    corporate purposes. See 'The Reorganization
                                    and Change in Tax Status' and 'Use of
                                    Proceeds.'
 
Proposed Nasdaq National Market     JGWC
  symbol...........................
 
------------------
(1) Assumes that the Underwriters' over-allotment option to purchase 793,011
    shares from the Selling Stockholders will not be exercised.
 
(2) Does not include 650,000 shares issuable upon exercise of stock options to
    be granted to employees and directors upon the completion of the Offering
    with an exercise price equal to the initial public offering price.
 
                                  RISK FACTORS
 
     Investors should consider the material risk factors involved in connection
with an investment in the Common Stock and the impact to investors from various
events which could adversely affect the Company's business. See 'Risk Factors.'
 
                                       5

<PAGE>
                        SUMMARY COMBINED FINANCIAL DATA
 
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     The following summary combined financial information should be read in
conjunction with the Combined Financial Statements of the J.G. Wentworth
Affiliated Companies and the Notes thereto, 'Selected Combined Financial Data'
and 'Management's Discussion and Analysis of Financial Condition and Results of
Operations' included elsewhere in this Prospectus. The following table also
includes certain unaudited pro forma combined statement of operations data for
the year ended December 31, 1996 and the six months ended June 30, 1997, which
give effect to the Reorganization, the Offering and certain other adjustments as
if they had occurred on June 30, 1997. The unaudited operating data has been
derived from management records for all periods presented.
 
<TABLE>
<CAPTION>
                                                                                                           SIX MONTHS ENDED
                                                      YEAR ENDED DECEMBER 31,                                  JUNE 30,
                                -------------------------------------------------------------------    -------------------------
                                   1992          1993          1994          1995          1996           1996          1997
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
                                (UNAUDITED)   (UNAUDITED)                                              (UNAUDITED)   (UNAUDITED)
<S>                             <C>           <C>           <C>           <C>           <C>            <C>           <C>
INCOME STATEMENT DATA:
Revenues:
  Interest income.............     $  --        $   389       $ 2,755       $ 8,560     $    10,426      $ 5,601     $     8,743
  Gain on sale of
    receivables...............        --             --            --           268             576           --          11,419
  Other income................       249          1,008           417           894             785          319             386
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
    Total revenues............       249          1,397         3,172         9,722          11,787        5,920          20,548
    Total expenses............       256          1,322         3,248         8,078          15,862        7,280          14,279
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
Income (loss) before
  extraordinary loss..........        (7)            75           (76)        1,644          (4,075)      (1,360)          6,269
Extraordinary loss............        --             --            --           876              --           --              --
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
Net income (loss).............     $  (7)       $    75       $   (76)      $   768     $    (4,075)     $(1,360)    $     6,269
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------

UNAUDITED PRO FORMA
 INFORMATION:
Pro forma (benefit) provision
  for income taxes (1)........                                                               (1,508)                       2,320
                                                                                        -----------                  -----------
Pro forma net income (loss)
  (1).........................                                                          $    (2,567)                 $     3,949
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
PER SHARE DATA:
Pro forma net income (loss)
  per share (1)(2)............                                                          $     (0.20)                 $      0.31
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
Pro forma number of shares
  outstanding (1)(2)..........                                                           12,549,134                   12,549,134
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
</TABLE>
 
<TABLE>
<CAPTION>
                                       JUNE 30, 1997
                                 --------------------------
                                               PRO FORMA
                                 ACTUAL     AS ADJUSTED (3)
                                 -------    ---------------
                                        (UNAUDITED)
<S>                              <C>        <C>
BALANCE SHEET DATA:
Finance receivables...........   $71,757       $  71,757
Retained interests............     5,219           5,219
Servicing asset...............       890             890
Total assets..................    81,445          81,445
Notes payable, banks..........    75,165          21,571
Deferred tax liability........        --           6,220
Total liabilities.............    82,135          34,741
Total equity (deficit)........      (690)         46,704
</TABLE>
 
                                       6

<PAGE>
<TABLE>
<CAPTION>
                                                                                                  SIX MONTHS ENDED
                                                        YEAR ENDED DECEMBER 31,                       JUNE 30,
                                           --------------------------------------------------    -------------------
                                            1992      1993      1994       1995        1996       1996        1997
                                           ------    ------    -------    -------    --------    -------    --------
<S>                                        <C>       <C>       <C>        <C>        <C>         <C>        <C>
UNAUDITED OPERATING DATA:
Portfolio Owned and Serviced:
  Maturity value........................   $   14    $3,839    $38,799    $74,820    $166,061    $82,377    $245,337
  Carrying value........................   $   12    $3,221    $33,778    $60,104    $ 90,930    $71,255    $142,394
Weighted average yield..................     29.7%     26.2%      18.0%      14.0%       20.2%      17.4%       22.4%
Allowance for credit losses.............       --        --         --         --    $    500    $   165    $  1,630
Allowance for credit losses as a
  percentage of average portfolio
  owned.................................       --        --         --         --         0.8%       0.2%        2.3%
Net charge-offs.........................       --        --         --         --          --         --    $    610
Net charge-offs as a percentage of
  average portfolio owned...............       --        --         --         --          --         --         0.6%
Structured Settlements:
  Total number of receivables
    originated..........................       --        --         --        136       2,197        577       2,219
  Cost of receivables originated........       --        --         --    $ 4,916    $ 56,004    $17,762    $ 48,889
  Maturity value of receivables
    originated..........................       --        --         --    $13,674    $125,697    $41,242    $103,239
  Weighted average yield................       --        --         --       20.5%       22.3%      20.7%       23.2%
  Weighted average maturity (in
    years)..............................       --        --         --        9.1         6.5        7.6         6.1
  Total number of defaulted
    receivables.........................       --        --         --          2          34          6          71
  Total number of defaulted payments....       --        --         --          4         146         33         321
  Carrying amount of defaulted
    payments............................       --        --         --    $     7    $    200    $    39    $    334
  Carrying value of defaulted
    receivables.........................       --        --         --    $    40    $  1,313    $   151    $  3,280
  Percentage of defaulted receivables...       --        --         --        0.8%        2.2%       0.7%        3.1%
  Net charge-offs.......................       --        --         --         --          --         --    $    610
  Net charge-offs as a percentage of
    portfolio owned.....................       --        --         --         --          --         --         0.7%

Other Deferred Payment Obligations:
  Total number of receivables
    originated..........................        1       475      2,637      4,610       1,409        919         354
  Cost of receivables originated........   $   12    $1,427    $31,854    $53,213    $ 17,052    $12,280    $  4,192
  Maturity value of receivables
    originated..........................   $   14    $1,871    $38,745    $62,851    $ 19,738    $14,217    $  4,905
  Weighted average yield................     29.7%     26.2%      18.1%      14.1%       13.2%      12.7%       13.5%
  Weighted average maturity (in
    years)..............................      0.5       1.1        1.2        1.3         1.2        1.3         1.2
  Total number of delinquent
    receivables.........................       --        --         --         13          20         16          10
  Carrying value of delinquent
    receivables.........................       --        --         --    $   133    $    197    $   127    $     63
  Delinquent receivables as a percentage
    of average portfolio................       --        --         --        0.3%        0.7%       0.3%        0.4%
  Net charge-offs.......................       --        --         --         --          --         --          --
</TABLE>
------------------
(1) Prior to the Reorganization, JGW and the General Partners were treated as S
    corporations under Subchapter S of the Internal Revenue Code of 1986 (the
    'Code') and applicable state law. The pro forma presentation reflects the
    provision for income taxes as if JGW and the General Partners had always
    been C corporations and the activities of the Partnerships had always been
    taxed as if owned by the Company at an assumed effective tax rate of 37%.
 
(2) Pro forma net income (loss) per share is computed based on 12,466,667 shares
    of Common Stock outstanding before the Offering and gives effect to the
    Reorganization and reflects the 82,467 shares of Common Stock which would
    need to be issued to generate the cash necessary to fund the Tax
    Distribution (as defined herein) at an assumed initial public offering price
    of $15.00 per share (the mid-point of the price range set forth on the cover
    page of this Prospectus). See 'The Reorganization and Change in Tax Status.'
 
(3) Adjusted to reflect (i) the conversion of JGW and the General Partners to C
    corporations and (ii) the sale of 4,000,000 shares of Common Stock offered
    hereby at an assumed initial public offering price of $15.00 per share (the
    mid-point of the price range set forth on the cover page of this Prospectus)
    after deducting underwriting discounts and commissions and estimated
    offering expenses payable by the Company. See 'The Reorganization and Change
    in Tax Status.'
 
                                       7

<PAGE>
                                  RISK FACTORS
 
     An investment in the shares of Common Stock involves a high degree of risk.
Prospective investors should carefully consider the following risk factors, in
addition to the other information set forth in this Prospectus, in connection
with the investment in the shares of Common Stock.
 
     When used in this Prospectus, the words 'may,' 'will,' 'expect,'
'anticipate,' 'continue,' 'estimate,' 'project,' 'intend,' and similar
expressions are intended to identify forward-looking statements regarding
events, conditions and financial trends that may affect the Company's future
plans of operations, business strategy, results of operations and financial
position. Prospective investors are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks and
uncertainties and that actual results may differ materially from those included
within the forward-looking statements as a result of various factors. Factors
that could cause or contribute to such differences include, but are not limited
to, those described below, and under the heading 'Management's Discussion and
Analysis of Financial Condition and Results of Operations' and elsewhere in this
Prospectus.
 
     CAPITAL NEEDS AND ACCESS TO CAPITAL MARKETS
 
     History of Negative Cash Flow.  The Company has operated, and expects to
continue to operate, on a negative operating cash flow basis, and the level of
negative operating cash flow is expected to increase as the volume of the
Company's originations of deferred payment obligations and other receivables
increases. The Company incurs significant expenses in connection with its
originations and does not receive cash from receivables until scheduled payments
are received or its receivables are sold. The Company's primary operating cash
requirements include the funding of (i) originations of deferred payment
obligations and other receivables, (ii) reserve accounts, over-collateralization
requirements, fees and expenses incurred in connection with its securitizations,
(iii) interest expense due under various financing arrangements, (iv)
television, radio and direct mail advertising and other marketing expenses, (v)
administrative and other operating expenses and (vi) working capital
requirements. The Company has historically funded its operations principally
through borrowings from financial institutions, payments on receivables and
securitizations. For the six months ended June 30, 1997, the Company used $9.7
million more than it generated through its operations.
 
     Dependence on Credit Facilities.  The Company depends on credit facilities
with financial institutions to finance the purchase of deferred payment
obligations and other receivables pending securitization. The Company currently
has a $105 million Revolving Credit Facility with ING and a bank (the 'SSC
Facility') and a $20.0 million Credit Facility with ING and a bank (the 'MFC
Facility' and together with the SSC Facility, the 'Credit Facilities') of which
$28.3 million and $12.3 million were outstanding at October 3, 1997,
respectively. The SSC Facility expires on August 25, 1998 and the MFC Facility
expires on May 20, 1998. To finance its growth, the Company intends to seek
additional financing, whether by increasing the amounts available pursuant to
the Credit Facilities or otherwise. There can be no assurance, however, that
such financing will be available to the Company on favorable terms or at all.

The inability of the Company to arrange new financing capacity or to extend the
term of the Credit Facilities when they expire would have a material adverse
effect on the Company's financial condition and results of operations. Continued
availability of the Credit Facilities is subject to, among other things,
continued compliance by the Company with various representations and covenants
included within the applicable loan documents and the absence of an occurrence
of any of the events of default set forth in the loan documents. The SSC
Facility includes as an event of default failure of J.G. Wentworth Receivables
II LLC (a special purpose limited liability company wholly owned by SSC) to meet
various financial and other covenants. The MFC Facility provides for events of
default upon the failure of MFC to abide by financial covenants including
maintaining a minimum net worth of its receivables and upon any change in the
law that may materially alter the schedule of payments due on the deferred
payment obligations owned by MFC. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources.'
 
                                       8
<PAGE>
     Dependence on Securitizations.  The Company intends to rely significantly
upon securitizations to generate cash proceeds for repayment of the Credit
Facilities and to finance originations of deferred payment obligations and other
receivables. In addition, Gain on Sale (as defined below) of receivables
generated by these securitizations is expected to represent a significant
portion of the Company's revenues. In June, September and October 1997, the
Company completed securitizations of structured settlement receivables. There
can be no assurance that the Company will be able to securitize its deferred
payment obligations and other receivables efficiently or successfully in the
future.
 
     As of October 3, 1997, the majority of the approximately $30.0 million in
structured settlement receivables on the Company's balance sheet did not meet
the eligibility criteria of the recent securitizations. These receivables
include originations from Notice States (as defined herein), from Illinois and
payment rights arising from workers' compensation awards. The Company does not
anticipate securitizing these receivables and presently intends to hold them to
maturity.
 
     The securitization market for the Company's assets is relatively
undeveloped and may be more susceptible to market fluctuations or other adverse
changes than markets for other asset classes. Securitization transactions may be
affected by a number of factors, some of which are beyond the Company's control,
including, among others, conditions in the securities markets in general,
conditions in the asset-backed securitization market, conformity of asset pools
to rating agency requirements and the type of credit enhancements used. Adverse
changes in the secondary market could impair the Company's ability to originate,
purchase or sell assets on a favorable or timely basis. Failure to obtain
acceptable rating agency ratings could adversely affect the terms or timing of
future securitizations. The Company intends to continue securitizing its
receivables on a regular basis. Any delay in the sale of an asset pool beyond a
quarter end may eliminate reported Gain on Sale in that quarter and would likely
result in losses for such quarter being reported by the Company. If the Company
were unable to securitize receivables for any reason, the Company's growth could
be materially impaired and the Company's financial condition and results of

operations could be materially adversely affected. See 'Management Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources' and 'Business -- Securitizations.'
 
     Need for Additional Capital.  The net proceeds of the Offering, along with
borrowings under the Credit Facilities and proceeds from regular
securitizations, are expected to be sufficient to meet the Company's expected
cash requirements and fund operations based on management's strategic growth
plans for the twelve months following the Offering. See 'Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources.' The Company's ability to implement its business strategy
will depend upon its ability to effect securitizations, to continue to obtain
sufficient financing under the existing Credit Facilities or to establish
alternative long-term financing arrangements. There can be no assurance that
such financing will be available to the Company on favorable terms. If such
financing were not available or the Company's capital requirements exceed
anticipated levels, then the Company may be required to seek additional equity
financing which would dilute the interests of stockholders who purchase Common
Stock in the Offering. The Company cannot determine the amount and timing of
additional equity financing requirements because such requirements are tied to,
among other factors, the growth of the Company's originations of deferred
payment obligations. If the Company were unable to access the capital markets,
its financial condition and results of operations would be materially adversely
affected. No assurance can be given, however, that the Company will have access
to the capital markets in the future for securitizations or for equity or debt
issuances, or that financing through borrowings or other means will be available
on acceptable terms to satisfy the Company's cash requirements and implement its
business strategy. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources.'
 
     INTEREST RATE FLUCTUATIONS.  The Company's profitability is directly
affected by levels of and fluctuations in interest rates. Such profitability is
largely determined by the difference, or 'spread,' between the effective yield
earned by the Company on the deferred payment obligations and other receivables
acquired by the Company and the interest rates payable under the Credit
Facilities and for pass-through certificates or notes issued in securitizations.
Several factors affect the Company's ability
 
                                       9
<PAGE>
to manage interest rate risk. Deferred payment obligations and other receivables
are purchased at effective yields which are fixed, while amounts borrowed under
the Credit Facilities bear interest at variable rates that are subject to
frequent adjustment to reflect prevailing rates for short-term borrowings. As a
result, increases in interest rates after deferred payment obligations and other
receivables are acquired, but before they are securitized or otherwise sold,
could have a material adverse effect on the Company's results of operations and
financial condition. Securitization of the Company's receivables fixes the
spread between the effective yields earned by the Company and the interest rates
paid to investors in securitizations (the 'Excess Spread') with respect to such
receivables. This Excess Spread is a component of what will determine Gain on
Sale if the securitization meets the requirements of Statement of Financial
Accounting Standards No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities ('SFAS 125'), although such

Excess Spread may be less than the potential spread that existed at the time the
receivables were purchased by the Company. Furthermore, the interest rates
demanded by investors in securitizations are affected by prevailing market rates
for comparable transactions and the general interest rate environment. The
Excess Spread discounted to its present value is a significant component of the
Company's Gain on Sale. Thus, increases in interest rates prior to the sale or
securitization of deferred payment obligations and other receivables may reduce
Gain on Sale earned by the Company. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations.'
 
     VALUATION AND POTENTIAL IMPAIRMENT OF RETAINED INTEREST.  As a fundamental
part of its business and financing strategy, the Company intends to sell a
significant portion of its receivables through securitizations. In a
securitization, the Company sells receivables that it has originated to a
special purpose vehicle for a cash purchase price and may retain a subordinated
interest in the receivables securitized and an interest in any excess cash
flows, after expenses (collectively, the 'Retained Interest'). The cash purchase
price is raised through an offering of pass-through certificates or notes by the
special purpose vehicle. Following securitization, purchasers of the
pass-through certificates or notes receive the principal collected and the
investor pass-through interest rate on the principal balance, while the Company
receives the cash flows from the Retained Interest and servicing fees.
 
     A substantial portion of the Company's total revenues for the six months
ended June 30, 1997 was recognized as gain on sale of receivables, which
represents the difference between the cash proceeds (less expenses from the sale
of pass-through certificates to investors) and the allocated basis attributable
to the pass-through certificates ('Gain on Sale'). The Company will recognize
such Gain on Sale of receivables in the quarter in which such receivables are
sold. Concurrent with recognizing such Gain on Sale, the Company records the
value of the Retained Interest and the servicing asset on its balance sheet.
 
     To account for the securitization of its receivables, the Company has
adopted SFAS 125. Under SFAS 125, the Company determines the value of the
Retained Interest by allocating the recorded investment in the receivables based
on the relative fair values of each portion on the date of sale. To value the
Retained Interest, the cash flows are projected over the life of the residual
certificates using default and interest rate assumptions that market
participants would use for similar financial instruments, subject to credit and
interest rate risks. These cash flows are discounted using an interest rate that
market participants would use for similar financial instruments. The fair
valuation also includes considerations of type of receivable, size, date of
origination and schedule of payment. The estimate of the fair value of the
servicing asset is initially calculated from market quotes for the type of
servicing performed by the Company; or alternatively, the fair value is based on
an analysis of discounted cash flows from servicing that incorporates estimates
of (i) prevailing market servicing costs; (ii) servicing revenues and (iii)
prevailing market profit margins. Although management of the Company believes
that it has made reasonable estimates of the Retained Interest and servicing
asset likely to be realized, it should be recognized that assumptions utilized
by the Company represent estimates. Actual experience may vary from these
estimates. If the Company's assumptions used in deriving the value of the
Retained Interest and the servicing asset differ from the actual results,
earnings could be negatively affected and the Company may be required to write

down the value of its
 
                                       10
<PAGE>
Retained Interest and servicing asset. Furthermore, if a liquid market for the
Retained Interest exists, it is limited. Therefore, no assurance can be given
that all or any portion of the Retained Interest could be sold at any price,
including at its stated value on the balance sheet, if at all. See 'Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Certain Accounting Considerations.' If the Reorganization had occurred as of
June 30, 1997, the amount of the deferred tax charge would have been
approximately $6.2 million.
 
     COMPETITION.  As an originator of rights to receive payments from
structured settlements and other deferred payment obligations, the Company faces
competition, primarily from other specialty finance companies. In the future,
the Company could face competition from a wide variety of financial services
providers, including commercial banks, credit unions, savings and loans and
other consumer and commercial lending institutions. Many of these existing and
potential competitors in the financial services business are substantially
larger and have more capital and other resources than the Company. Competition
can take many forms, including convenience in obtaining funding, service,
marketing and distribution channels and effective interest rates and may be
affected by fluctuations in interest rates and general economic conditions.
During periods of rising interest rates, competitors which have 'locked in' low
borrowing costs may have a competitive advantage. Furthermore, the current level
of gains realized on the sale of the type of receivables by the Company and its
competitors is attracting additional competitors into this market with the
effect of lowering the gains that may be realized by the Company on future sales
and securitizations. In addition, greater investor acceptance of securities
backed by assets comparable to the Company's receivables and greater
availability of information regarding the default experience of such receivables
creates greater efficiencies in the market for such securities. Such
efficiencies may create a desire for even larger transactions giving companies
with greater volumes of originations a competitive advantage. In addition, a
more efficient market for such securities may lead certain investors to purchase
securities backed by other types of assets where potential returns may be
greater. See 'Business -- Competition.'
 
     POSSIBLE LOSS IN QUARTER; VARIABLE QUARTERLY EARNINGS.  The Company will
record a one-time, non-cash charge to the provision for income taxes in the
quarter when the Offering is completed to reflect the deferred tax liability of
the J.G. Wentworth Affiliated Companies recorded in connection with the
Reorganization. Accordingly, the recording of such charge in the quarter in
which the Offering is completed may result in the Company reporting a net loss
for such quarter. See Note 2 to Combined Financial Statements for a discussion
of the effects of the change in tax status of the Company.
 
     Several other factors affecting the Company's business can cause
significant variations in its quarterly results of operations. In particular,
variations in the volume of the Company's receivables originations, the interest
rate spreads between the Company's cost of funds and the average effective yield
on purchased receivables, gains recorded on the sale of receivables which are
affected by the rate paid to investors in securitizations, and the timing and

size of securitizations, can result in significant increases or decreases in the
Company's revenues and income from quarter to quarter. Moreover, should the
volume of originations fail to grow as anticipated in any quarterly or other
period, the Company's earnings for such period will experience an immediate
adverse impact since the costs associated with the Company's internal
originations capacity cannot be easily or quickly reduced should the volume of
originations fall. Any significant decrease in the Company's quarterly revenues
or income could have a material adverse effect on the Company's financial
condition and results of operations. See 'Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Quarterly Results of
Operations.'
 
     ABILITY OF THE COMPANY TO CONTINUE GROWTH STRATEGY.  The Company's ability
to continue its growth strategy depends on its ability to increase the volume of
deferred payment receivables it originates while successfully managing its
growth. This volume increase is, in part, dependent on the Company's ability to
effect regular securitizations and to procure, maintain and manage sources of
funding pursuant to the Credit Facilities or otherwise. In addition to the
Company's financing needs, the Company's ability to manage its growth
successfully and sustain profitability will depend upon, among other factors,
(i) offering attractive products to prospective customers, (ii) marketing its
 
                                       11
<PAGE>
products successfully, (iii) maintaining appropriate procedures, policies and
systems to ensure that the Company's receivables have an acceptable level of
credit risk and loss, (iv) managing the costs associated with expanding its
infrastructure, (v) identifying new lines of business and asset classes where
the opportunities for profitable operations are present as competition
intensifies in existing lines of business, (vi) hiring and retaining qualified
personnel and (vii) continuing to operate in competitive economic, regulatory
and judicial environments that are conducive to the Company's business
activities. In order to support the growth of its business, the Company has
added a significant number of new operating procedures and personnel. The
Company recently implemented new computer hardware and software systems that
require additional corresponding investments in training and education. The
Company's significant growth has placed substantial new and increased pressures
on the Company personnel. There can be no assurance that the addition of new
operating procedures and personnel, together with the Company's enhanced
computer system, will be sufficient to enable it to meet its current or future
operating needs. Changes in the Company's ability to obtain or maintain any or
all of these factors or to successfully manage its growth strategy could have a
material adverse effect on the Company's operations, profitability and growth.
 
     RISKS ASSOCIATED WITH STRUCTURED SETTLEMENTS
 
     Limited Operating Experience in Structured Settlements.  The Company began
acquiring rights to receive payments from structured settlements in 1995.
Consequently, the Company has limited operating history in acquiring, servicing
and collecting structured settlement receivables. Therefore, the historical
performance of the Company's operations, including its underwriting and
servicing operations, may be of limited relevance in predicting future
performance. Any collections or other problems associated with the large number
of structured settlement receivables originated in the recent past will not

become apparent until sometime in the future. Consequently, the Company's
historical results of operations may be of limited relevance to an investor
seeking to predict the Company's future performance.
 
     Restrictions on Assignability of Structured Settlement Receivables.  Most
of the settlement agreements giving rise to the structured settlement payments
purchased by the Company contain anti-assignment clauses that expressly
proscribe the assignment of the scheduled payments due thereunder. Consequently,
there is no assurance that the assignment proscribed by an anti-assignment
clause would be effective against the obligor which, in the case of most
structured settlements, is a special purpose entity to which an insurance
company assigns its obligations to make payments under the settlement (the
'Assumption Party'). Although the Company believes that the modern trend in the
law would permit assignments to be effective against the Assumption Party
notwithstanding an express contractual provision to the contrary, the
traditional legal rule would hold that an express prohibition of assignment will
normally be enforced in accordance with its terms. In the majority of the
states, case law is insufficient to allow any determination as to how a court
would rule. Even in the jurisdictions which have adopted the modern trend,
however, an assignment in violation of an anti-assignment clause would give rise
to a breach of the underlying settlement contract, thereby permitting the
beneficiary of such clause to recover damages, if any could be proved, for
breach of contract. The presence of restrictions on the assignability of certain
receivables may make such receivables ineligible for the Company's
securitization program. Therefore, to the extent that courts permit the recovery
of damages from claimants, the Company's business could be materially adversely
affected. Furthermore, although the Company believes that reported case law
appears to allow it to maintain a successful action to enforce the assignment as
against the Assumption Party or the Annuity Provider (as defined herein) even in
the presence of an anti-assignment clause, there is no assurance that a court
would permit the Company to enforce the assignment. For a description of the
typical structure of a structured settlement, see 'Business -- Market Overview
-- Structured Settlements.'
 
     In addition, a Texas statute deems assignments of payment rights in
contravention of anti-assignment clauses void ab initio. Although the Company
does not seek to originate receivables from claimants who the Company believes
would be subject to the Texas statute, to the extent any of the
 
                                       12
<PAGE>
Company's receivables are subject to Texas law, the Company's ability to collect
delinquent payments may be adversely affected.
 
     Because of the legal uncertainties associated with the effectiveness of an
assignment to the Company, the Company may not be able to enforce its rights to
the scheduled payments directly against the Assumption Party or the Annuity
Provider. Because the Company believes that the claimant has the right to
enforce the settlement contract and that the power to enforce that right can be
delegated, the Company has required that each claimant deliver to the Company a
power of attorney giving the Company the right to assert the claimant's rights
to such enforcement, subject to its potential liability for damages for breach
of contract as discussed above. The Company believes that the form of such power
of attorney gives the Company the power to sue to enforce its rights with

respect to the scheduled payments and that the power will not terminate upon the
bankruptcy of a claimant. If, however, a bankruptcy court were to rule that the
scheduled payments were part of the bankruptcy estate of the claimant, the
automatic stay imposed by Section 362 of the U.S. Bankruptcy Code of 1978, as
amended (the 'Bankruptcy Code'), would prevent the exercise of such power of
attorney. Although in such cases the Company would seek relief from automatic
stay from the bankruptcy court, there is no assurance that the court would rule
in the Company's favor. See '-- Insolvency Risks.'
 
     Furthermore, the assignment by the claimant of its rights may violate the
terms of the annuity contract entered into between the Assumption Party and the
Annuity Provider. The assignment of the rights to the proceeds of an annuity
contract may in some states be governed by insurance statutes whose provisions
may be more restrictive than the general legal principles governing assignments
of payment rights. In addition, the assignment of the settlement payments may
result in the breach of certain other provisions in the underlying settlement
agreements. These restrictions on assignability may also have an adverse effect
on the Company's ability to complete securitizations of its receivables.
 
     Risk of Tax Law Change.  The use of structured settlements is largely the
result of the favorable federal income tax treatment of such transactions under
current law. See 'Business -- Market Overview -- Structured Settlements.' If
such treatment were changed adversely by a statutory change or a change in
interpretation, the dollar volume of structured settlements could be reduced
significantly which would also reduce the level of the Company's structured
settlement business. In addition, if there were a change in the Code that would
result in adverse tax consequences of the assignment of deferred payment
obligations, such change could have a material adverse effect on the Company's
business.
 
     Risk of Diversion of Scheduled Payments.  Approximately 2.7% of the
claimants from whom the Company has purchased structured settlement receivables
have diverted scheduled payments. Diverted scheduled payments are considered
defaults. Although the Company, as part of its collection efforts, has
instituted litigation to recover the diverted payments, the Company's ability to
enforce judgments entered against the claimants may be adversely affected by the
actions of Annuity Providers. In connection with its collection efforts, the
Company, upon obtaining a judgment against a claimant, serves garnishment
process on the applicable Annuity Provider in order to enforce the judgment and
preclude the claimant from receiving and diverting additional scheduled
payments. Certain garnishee Annuity Providers have filed pleadings challenging
the Company's garnishment process. The responsive pleadings of such Annuity
Providers have included allegations and legal arguments to the effect that: (i)
contractual provisions in the underlying settlement agreements and annuity
contracts prohibit assignment, encumbrance, or garnishment of the scheduled
payments thereunder; (ii) the settlement purchase agreements entered into by the
Company and the claimant are unenforceable because of fraud or prohibitions on
assignment and offer of scheduled payments set forth in the settlement
agreements and/or the annuity contracts; and/or (iii) the scheduled payments are
exempt from garnishment under certain state laws. Certain states have enacted
statutes that prohibit garnishment of payments under specified arrangements such
as insurance contracts and workers' compensation awards. Although collections
under the deferred payment obligations originated by the Company have not to
date been adversely affected by such statutes, there is no assurance that such

statutes will not have a material adverse effect on the Company's business in
future periods.
 
     Although the Company has filed pleadings contesting all of the material
allegations and defenses asserted by such garnishee Annuity Providers and is
presently engaged in settlement discussions with
 
                                       13
<PAGE>
substantially all such garnishee Annuity Providers with whom the Company is
currently engaged in litigation, to the extent that any such Annuity Provider is
successful in contesting the Company's garnishment process, the collectibility
of any diverted scheduled payments and the value of the Company's owned or
managed receivables may be materially adversely impacted. Any impairment of the
collectibility of the managed receivables may also constitute an event of
default under the documents governing any applicable securitization transaction.
See 'Business -- Legal Proceedings.'
 
     Insolvency Risks.  The Company's rights to scheduled payments in structured
settlement transactions will be adversely affected if any of the claimant, the
Assumption Party or the Annuity Provider becomes insolvent and/or becomes a
debtor in a case under the Bankruptcy Code.
 
          Risks of Insolvency of the Claimant.  The ability of the Company to
     collect scheduled payments from the Annuity Provider may be adversely
     affected by a number of risks related to the possible insolvency of the
     claimant, including without limitation the following:
 
       o Risk of Scheduled Payments Being Deemed a Part of the Claimant's
         Estate.  The Company believes that, if a claimant were to become a
         debtor in a case under the Bankruptcy Code, a court would hold that the
         scheduled payments transferred by the claimant under the applicable
         settlement purchase agreement would not constitute property of the
         estate of the claimant under the Bankruptcy Code. If, however, a
         trustee in bankruptcy or other receiver were to assert a contrary
         position, such as by requiring the Company (or any securitization
         vehicle) to establish its right to those payments under Federal
         bankruptcy law or by persuading courts to recharacterize the
         transaction as secured loans, such result could have a material adverse
         effect on the Company's business. Such risks may be greater in cases
         where anti-assignment clauses are enforced. See '-- Restrictions on
         Assignment of Structured Settlements.'
 
       o Risk of Avoidance of Assignment by Trustee.  If the scheduled payments
         are deemed to be property of the bankruptcy estate of the claimant, the
         trustee may be able to avoid assignment of the receivable to the
         Company. Courts in the jurisdictions that have ruled on such matters
         are not in agreement as to the ability of the trustee to avoid the
         transfer when the Assumption Party has not been notified of the
         assignment. The Company is aware that of the states that have
         considered such issues, judicial decisions of only four (each
         hereinafter referred to as a 'Notice State') conclude that a subsequent
         creditor takes priority over an assignee of a payment right who did not
         notify the obligor of such assignment. Although the Company purchases

         receivables in Notice States, it has not securitized receivables
         purchased from residents of the Notice States where it has not given
         proper notice. To the extent that other states in which claimants
         reside from whom the Company originates receivables adopt the rule of
         the Notice States, the Company's ability to collect or securitize its
         receivables may be adversely affected.
 
          Risks of Insolvency of Assumption Party and Annuity Provider.  The
     Company believes that the vast majority of its structured settlement
     receivables emanate from qualified assignments which require that the
     Assumption Parties fund their respective obligations under the applicable
     settlement agreements with an annuity contract covering the payments
     required to be made under such settlement agreements. Pursuant to each
     qualified assignment and the related annuity contract, the obligation to
     make the scheduled payments in respect of a structured settlement continues
     to be the responsibility of the Assumption Party, but an Assumption Party's
     ability to make such payments is typically dependent on the ability of the
     Annuity Provider to fund such payments under the related annuity contract.
     Although the large majority of the Company's structured settlement
     receivables are funded with annuity contracts issued by Annuity Providers
     rated 'A' or better by A.M. Best, there can be no assurance that such
     Annuity Providers will satisfy their obligations under the annuity
     contracts when due.
 
          Furthermore, a general creditor or representative of the creditors
     (such as a trustee in bankruptcy) of an Assumption Party could make the
     argument that the payments due from the Annuity Provider are the property
     of the estate of such Assumption Party (as the named owner thereof). There
     is very little judicial precedent addressing this issue in the context of
     annuity contracts. To the extent that a court would accept this argument,
     the resulting delays or reductions
 
                                       14
<PAGE>
     in payments on the Company's receivables could have a material adverse
     effect on the Company's financial condition and results of operations.
 
     Relationships with Annuity Providers.  The ability of the Company to
collect payments under structured settlement transactions depends on the Annuity
Providers not successfully challenging the claimant's right to direct the
payment to be sent to lockboxes or bank accounts controlled by the Company.
Although the Company believes that the claimant is legally entitled to change
the address of payment and the majority of Annuity Providers have changed the
address of payment when requested to do so by claimants, certain Annuity
Providers have resisted, and continue to resist, sending payments to Company
controlled lockboxes and bank accounts. Successful challenges by Annuity
Providers in this regard or any effort by Annuity Providers to resist
redirecting payments to the Company could have a material adverse affect on the
Company's business. See 'Business -- Legal Proceedings.'
 
     REGULATION AND LEGISLATION.  There is currently no significant government
regulation of the Company's current business, except in Illinois, where the
legislature enacted a law that takes effect on January 1, 1998 and requires that
any assignment of a structured settlement be approved by a court having

jurisdiction over the underlying claim and prohibits an Annuity Provider from
mailing payments to any party other than the claimant without such court
approval. The Illinois law does not currently specify the standards on which
courts would grant approval of assignments or the process by which such approval
should be sought. Accordingly, although the Company expects to gain court
approval for any structured settlement receivables purchased in Illinois, there
is no assurance that such approvals will be granted. As of June 30, 1997, 4.3%
of the Company's serviced receivables consisted of receivables relating to
structured settlements originated in Illinois. Also, there is no assurance that
other states will not enact similar statutes or impose other forms of regulation
in the future or that the assignment of certain receivables originated outside
of Illinois may not be subject to the restrictions in the Illinois law.
Consequently, the Company's structured settlements business may become subject
to similar or other government regulation. The nature and impact of any such
future regulation cannot be determined. There is no assurance that any such
regulation will not have a material adverse effect upon the Company's financial
condition and results of operations.
 
     Every state has statutes that regulate activities related to 'conducting an
insurance business.' Although the Company does not believe that it is conducting
an 'insurance business' and is not aware of any judicial authority in favor of
such interpretation, there can be no assurance that some or all of these
statutes will not be interpreted in the future to preclude the Company's
purchase of rights under annuity contracts or other insurance products in that
state. In addition, federal law and the laws of each state regulate the
activities of lending institutions. Although the Company believes that its
originations of receivables are true sales of such assets and thus are not
lending transactions, there is no assurance that laws that regulate lending
activities may not be interpreted in the future as applying to all or any aspect
of the Company's business activities. The application of lending regulations,
such as usury limits, disclosure requirements and capital requirements, could
have a material adverse effect on the Company's business.
 
     LOSS OF SERVICING RIGHTS AND SUSPENSION OF FUTURE SERVICING CASH
FLOWS.  The Company is entitled to receive servicing income only while it acts
as servicer for securitized receivables. Any loss of the servicing rights would
have a material adverse effect on the Company's operations and financial
condition. The Company's right to act as servicer can be terminated under
certain circumstances described in the purchase and contribution agreement or
the pooling and servicing agreement applicable to each securitization. The
Company's loss of the servicing rights under any purchase and contribution
agreement or the pooling and servicing agreement or the occurrence of a trigger
event that would block release of future servicing cash flows from the servicing
account would have a material adverse effect on the Company's financial
condition and results of operations.
 
     RISKS RELATING TO PURCHASES OF NEW CLASSES OF ASSETS.  The Company plans to
expand the scope of its business by investing in additional classes of assets on
a trial basis prior to making large scale commitments to purchases of such
assets. See 'Business -- Strategy.' As a result, investors in the Offering will
not know into what new areas, if any, the Company will expand its business and,
accordingly, will have to rely on management's determinations in this regard.
Any such new areas may involve a number of financial, competitive, regulatory
and other risks. As result, there is no assurance

 
                                       15
<PAGE>
that the Company will be able to expand the scope of its business or, if it
does, that it will be able to do so on a long-term profitable basis. Any
unsuccessful attempt in this regard may have a material adverse effect on the
Company's financial condition and results of operations.
 
     RISKS RELATING TO ENTRY INTO MARKET FOR SELLER-FINANCED MORTGAGES.  The
Company has recently hired a group of brokers to assist it in investigating the
market for seller-financed mortgages. If the Company expands into this market as
a principal, the Company's business could be affected by new risks including:
(i) potentially weak credit profiles of some obligors; (ii) lack of uniform
documentation of the transactions; (iii) prepayment risks; and (iv) factors
affecting the value of real estate as collateral and the state of the economy
generally. Any failure of the Company to manage these risks successfully could
have a material adverse impact on its future financial condition and results of
operations. See 'Business -- Market Overview -- Other Markets.'
 
     RISKS RELATING TO INVESTMENT COMPANY ACT REGISTRATION.  A company is
generally required to register as an investment company under the Investment
Company Act of 1940, as amended (the 'Investment Company Act'), if it owns
'investment securities,' as defined under the Investment Company Act, having a
value exceeding 40% of the value of the company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis (the '40%
Test'). There is no direct authority on whether any or all of the various types
of rights that the Company acquires as part of its business constitute
investment securities for purposes of the 40% Test. Although the Company
believes that none of such rights constitutes investment securities for such
purposes, there is no assurance that the Securities and Exchange Commission (the
'Commission') or courts will not reach a contrary conclusion with respect to
some or all of such rights. Registration as an investment company under the
Investment Company Act would result in a number of restrictions and requirements
that would make it impracticable for the Company to operate as currently
contemplated. Accordingly, the Company will have to monitor the mix of its
current and future investments so that it does not become subject to the
requirement to register as an investment company as a result of the 40% Test or
otherwise.
 
     DEPENDENCE ON KEY PERSONNEL.  The Company's success depends to a
significant degree upon the continuing contributions of its key management
personnel including James D. Delaney, its President and Chief Executive Officer,
Gary Veloric, its Chairman, and Michael B. Goodman, its Executive Vice President
and Chief Operating Officer (collectively, 'the Principals'). The Company
currently has employment agreements with each of the Principals for a three-year
term. The loss of these or other key management or technical personnel could
have a material adverse effect on the Company's financial condition and results
of operations. The Company does not intend to obtain key man insurance with
respect to any of its executives.
 
     CONTROL BY EXISTING STOCKHOLDERS AND POSSIBLE EFFECT OF ANTI-TAKEOVER
PROVISIONS.  The Principals, together with Alpha Nikelberry, Edward S. Stone and
ING (collectively, the 'Existing Stockholders'), currently own 100% of the
issued and outstanding capital stock of the Company. All of the Existing

Stockholders are participating in the Offering as Selling Stockholders (in this
context, the 'Selling Stockholders'). After the Offering, the Existing
Stockholders are expected to own approximately 67.9% of the outstanding Common
Stock. As a result, the Existing Stockholders would effectively be able to
control all matters requiring approval by the Company's stockholders, including
the election of directors. See 'Principal and Selling Stockholders' and 'Shares
Eligible for Future Sale.' In addition, the Company is subject to the
anti-takeover provisions of Section 203 of the Delaware General Corporation Law,
which prohibit the Company from engaging in a 'business combination' with an
'interested stockholder' for a period of three years after the date of the
transaction which such stockholder became an 'interested stockholder' unless the
business combination is approved in a prescribed manner. These provisions,
together with other provisions in the Company's Certificate of Incorporation and
By-laws, may discourage acquisition bids for the Company by persons unrelated to
certain existing stockholders. The effect of Existing Stockholders' stock
ownership and these provisions may be to limit the price that investors might be
willing to pay in the future for shares of the Common Stock or prevent or delay
a merger, takeover, or other change in control of the Company and thus
discourage attempts to acquire the Company. In addition, the Company's Board of
Directors has the authority to issue up to 5,000,000 shares of Preferred Stock
(as defined herein) and to determine the price, rights, preferences and
privileges of those shares without any further vote or action by the
stockholders. The rights of the holders of Common Stock will be subject to, and
may be adversely affected by, the rights of the holders of any Preferred Stock
that may
 
                                       16
<PAGE>
be issued in the future. The issuance of Preferred Stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire a majority of the outstanding voting stock of the Company. The Company
has no present plan to issue any shares of Preferred Stock. The Company's
Certificate of Incorporation and By-laws contain other provisions, such as a
classified Board of Directors, notice requirements for stockholders and
limitations on the stockholders' ability to remove directors or to present
proposals to the stockholders for a vote, all of which may have the further
effect of making it more difficult for a third party to gain control or to
acquire the Company. See 'Description of Capital Stock.'
 
     NO PRIOR PUBLIC MARKET; POTENTIAL VOLATILITY OF STOCK PRICE.  Prior to the
Offering, there has been no public market for the Common Stock, and there can be
no assurance that an active trading market will develop or, if developed, be
sustained after the Offering. The initial public offering price will be
determined through negotiations between the Company and the representatives of
the Underwriters and may bear no relationship to the price at which the Common
Stock will trade after the Offering. See 'Underwriting.' The market price of the
Common Stock may be volatile and may be significantly affected by factors such
as actual or anticipated fluctuations in the Company's operating results,
announcements of new lines of business by the Company or its competitors,
developments with respect to conditions and trends in the Company's lines of
business or in the financial services industry as a whole, governmental
regulation, changes in estimates by securities analysts of the Company's or its
competitors' future financial performance, general market conditions and other

factors, many of which are beyond the Company's control. In addition, the stock
market has from time to time experienced significant price and volume
fluctuations that have adversely affected the market prices of securities of
companies irrespective of such companies' operating performances.
 
     SHARES ELIGIBLE FOR FUTURE SALE.  Sales of substantial amounts of the
Common Stock in the public market following the Offering could adversely affect
the market price of the Common Stock. Upon the completion of the Offering, the
Company will have 16,466,667 shares of Common Stock outstanding. Of these
shares, the 5,286,738 shares of Common Stock sold in the Offering will be freely
tradeable without restriction or further registration under the Securities Act
of 1933, as amended (the 'Securities Act'). The remaining 11,179,929 shares of
Common Stock outstanding as of the date of this Prospectus are 'restricted
securities' as defined by Rule 144 under the Securities Act ('Rule 144').
 
     Upon the completion of the Offering, there will be 650,000 shares of Common
Stock issuable upon exercise of options under the 1997 Stock Incentive Plan. The
options will become exercisable in four equal annual installments beginning on
the first anniversary of the completion of the Offering. The Company intends to
file a registration statement on Form S-8 covering the shares of Common Stock
issuable upon exercise of options within one year from the date of this
Prospectus. The shares registered under such registration statement will be
available for resale in the open market upon the exercise of options, subject to
Rule 144 volume limitations applicable to affiliates. See 'Management -- 1997
Stock Incentive Plan.'
 
     The Company, the Selling Stockholders, directors, executive officers and
certain other securityholders of the Company have agreed that they will not,
directly or indirectly, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) any shares of Common Stock, or of equity
securities of the Company substantially similar thereto or any other securities
convertible into, or exercisable or exchangeable for, any shares of Common Stock
or such similar securities for a period of 180 days after the date of this
Prospectus, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, except that during such period,
shares of Common Stock may be issued upon the exercise of outstanding stock
options and the Company may issue employee stock options which are exercisable
after the 180th day after the date of this Prospectus. Prudential Securities
Incorporated, on behalf of the Underwriters, may, in its sole discretion at any
time and without prior notice, release all or any portion of the shares of
Common Stock subject to the agreement.
 
     IMMEDIATE AND SUBSTANTIAL DILUTION.  Purchasers of shares of Common Stock
in the Offering will experience an immediate and substantial dilution of
approximately $12.16 per share, assuming an initial public offering price of
$15.00 (the mid-point of the price range set forth on the cover page of this
Prospectus) in the pro forma net tangible book value per share of Common Stock
from the initial public offering price. See 'Dilution.'
 
                                       17

<PAGE>
                  THE REORGANIZATION AND CHANGE IN TAX STATUS
 
     On the date of the Reorganization, pursuant to the terms of a contribution
agreement (the 'Contribution Agreement'), the Principals will contribute all of
their capital stock in JGW, SSC Management and the General Partners and the
Existing Stockholders will contribute 100% of their interests in the
Partnerships to the Company, in exchange for a number of shares of Common Stock
determinable pursuant to a formula set forth in the Contribution Agreement. The
Reorganization will occur immediately prior to the completion of the Offering.
The Common Stock issued pursuant to the Contribution Agreement will constitute
all of the outstanding stock of the Company prior to the completion of the
Offering. The total number of shares distributable to the Existing Stockholders
in the Reorganization will be 12,466,367.
 
     As a result of the Reorganization, JGW and the General Partners, each of
which will become a wholly owned subsidiary of the Company, will be fully
subject to federal and state income taxes, and the Company will record a net
deferred tax liability on its balance sheet. From their formation until the
Reorganization, JGW and the General Partners have been treated as S corporations
for federal income tax purposes and for certain state corporate income tax
purposes. As a result, the historical earnings of JGW and the General Partners
have been taxed directly to their respective stockholders at their individual
federal and state income tax rates. The amount of the deferred tax liability to
be recorded as of the date of termination of the S corporation status will
result principally from temporary differences between accounting and tax
treatment of income earned from finance receivables and Gain on Sale. The net
deferred tax liability will be recorded as a non-cash charge to the provision
for taxes in the quarter in which the Offering is completed. If the S
corporation status of JGW and the General Partners had been terminated as of
June 30, 1997, the amount of the deferred tax liability would have been
approximately $6.2 million. See 'Risk Factors--Possible Loss in Quarter;
Variable Quarterly Earnings;' 'Capitalization' and 'Selected Combined Financial
Data.'
 
     Since inception, JGW and the General Partners have paid approximately 92%
of their estimated taxable income, including an estimate for the six months
ended June 30, 1997 to the Principals as S corporation distributions
(approximately $1.2 million was distributed from January 8, 1991 through June
30, 1997). Such distributions were paid to the Principals as distributions of a
portion of JGW's and the General Partner's earnings and to pay the Principals'
taxes. In September 1997, JGW made a distribution of $70,000. From June 30, 1997
through October 8, 1997, SSC distributed $2.1 million to the Existing
Stockholders and intends to distribute an additional $2.0 million to the
Existing Stockholders in October 1997. Since inception through June 30, 1997,
the Partnerships paid approximately $4.4 million to the Existing Stockholders.
Prior to the Reorganization, JGW will distribute an estimated $1.2 million cash
payment to the Principals (the 'Tax Distribution'). The Tax Distribution
represents the sum of approximately (i) $298,000 in taxes payable at the
applicable statutory rate by the Principals on the estimated net earnings of JGW
and the General Partners for the period from January 1, 1997 to November 30,
1997 and (ii) $939,000 in taxes payable at the applicable statutory rate by the
Principals on the estimated net profits of the Partnerships from January 1, 1997
to November 30, 1997.

 
     The Company, JGW, the General Partners and the Existing Stockholders have
entered into a tax indemnification agreement (the 'Tax Agreement') relating to
their respective income tax liabilities. Because JGW and the General Partners
will be fully subject to corporate income taxation after the termination of
their S corporation status, the reallocation of income and deductions between
the period during which JGW and the General Partners were treated as S
corporations and the period during which the Company, JGW and the General
Partners will be subject to corporate income taxation may increase the taxable
income of one party while decreasing that of another party. Accordingly, the Tax
Agreement is intended to assure that taxes are borne by the Company on the one
hand and the Existing Stockholders on the other only to the extent that such
parties received the related income. The Tax Agreement generally provides that
the Company will indemnify the Existing Stockholders against any liabilities of
the Company after the Reorganization, and the Existing Stockholders will
indemnify the Company against any tax liabilities of the Existing Stockholders
prior to the date of the Reorganization (in each case such indemnified amounts
include interest and penalties and related costs and expenses).
 
                                       18
<PAGE>
The Company will also indemnify the Existing Stockholders for all taxes imposed
upon them as the result of their receipt of an indemnification payment under the
Tax Agreement. Any payment made by the Company to the Existing Stockholders
pursuant to the Tax Agreement may be considered by the Internal Revenue Service
or state taxing authorities to be non-deductible by the Company for income tax
purposes. The Tax Agreement also provides that the Company will reimburse the
Existing Stockholders for any taxes that result from the disallowance of
deductions taken by the Existing Stockholders, the result of which is to permit
the Company, JGW or the General Partners to take such disallowed deductions
after completion of the Reorganization. None of the parties' obligations under
the Tax Agreement are secured, and, as such, there can be no assurance that the
Existing Stockholders or the Company will have funds available to make any
payments which may become due under the Tax Agreement. See 'Certain
Relationships and Related Party Transactions.'
 
                                       19

<PAGE>
                                USE OF PROCEEDS
 
     The net proceeds to the Company from the sale of 4,000,000 shares of Common
Stock offered by the Company hereby are estimated to be $54.8 million, assuming
an initial public offering price of $15.00 per share (the mid-point of the price
range set forth on the cover page of this Prospectus) and after deducting
underwriting discounts and commissions and estimated offering expenses. The
Company will not receive any of the proceeds from the shares of Common Stock
sold by the Selling Stockholders.
 
     The Company anticipates applying approximately $1.2 million to fund the
cash Tax Distribution to the Principals and to pay down the outstanding amounts
on the Credit Facilities that were incurred to fund the Company's originations
of structured settlements and other deferred payment obligations. At October 3,
1997, $28.3 million was outstanding on the SSC Facility, which bore interest at
a rate of 9.15% per annum on that date, and $12.3 million was outstanding on the
MFC Facility, which bore interest at a rate of 7.15% per annum on that date. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources.'
 
     The remainder of the net proceeds will be added to working capital to be
used for general corporate purposes. Pending such uses, the net proceeds will be
invested in interest-bearing instruments.
 
                       DISTRIBUTIONS AND DIVIDEND POLICY
 
     Prior to the Reorganization, the Partnerships distributed cash to their
partners on a periodic basis, including the Principals. MFC paid $793,000,
$928,000 and $0 in distributions to its partners in 1995, 1996 and the six
months ended June 30, 1997, respectively, and SSC paid $0, $702,000 and $2.0
million in distributions to its partners in 1995, 1996 and the six months ended
June 30, 1997, respectively. In addition, JGW and the General Partners made S
corporation distributions to their shareholders of $22,000, $285,000 and
$793,000 in 1995, 1996 and the six months ended June 30, 1997, respectively.
During the period from June 30, 1997 until October 8, 1997, JGW, SSC and MFC
distributed $70,000, $2.01 million and $221,000 to their partners, respectively.
Also, SSC intends to distribute an additional $2.0 million to the Existing
Stockholders in October 1997.
 
     The Company, as a newly formed entity, has not paid or declared cash
dividends on its capital stock. The Company currently expects it will retain its
future earnings for use in the operation and expansion of its business and does
not anticipate paying or declaring any cash dividends in the foreseeable future.
 
                                       20

<PAGE>
                                 CAPITALIZATION
 
     The following table sets forth the capitalization of the Company at June
30, 1997 (i) on a historical combined basis, (ii) on a pro forma combined basis
assuming the Reorganization, the payment of the Tax Distribution and the
recording of a deferred tax liability, and (iii) on a pro forma combined basis
as adjusted to reflect the sale of the 4,000,000 shares of Common Stock offered
by the Company at the assumed initial public offering price of $15.00 per share
(the mid-point of the price range set forth on the cover page of this
Prospectus) and the application of the estimated net proceeds therefrom.
 
     The table should be read in conjunction with the Combined Financial
Statements of the J.G. Wentworth Affiliated Companies and the Notes thereto
included elsewhere herein. See 'The Reorganization and Change in Tax Status,'
'Use of Proceeds' and 'Management's Discussion and Analysis of Financial
Condition and Results of Operations.'
 
                                             JUNE 30, 1997
                                 -------------------------------------
                                              PRO
                                 ACTUAL     FORMA(1)    AS ADJUSTED(2)
                                 -------    --------    --------------
                                        (DOLLARS IN THOUSANDS)
Debt:
Notes payable, banks..........   $75,165    $ 75,165       $ 21,571
Stockholders' equity:
  Preferred Stock $.01 par
     value, 5,000,000 shares
     authorized and no shares
     outstanding..............        --          --             --
  Common stock, $.01 par
     value, 30,000,000 shares
     authorized, 12,466,667
     outstanding pro-forma and
     16,466,667 shares
     outstanding, as
     adjusted.................         2         125            165
Additional paid-in capital....       261      (3,960)        50,800
Retained earnings (deficit)...     1,939      (4,261)        (4,261)
Partners capital (deficit)
  accounts....................    (2,861)         --             --
Due from shareholders or
  partners....................       (31)         --             --
                                 -------    --------    --------------
     Total equity (deficit)...      (690)     (8,096)        46,704
                                 -------    --------    --------------
     Total capitalization.....   $74,475    $ 67,069       $ 68,275
                                 -------    --------    --------------
                                 -------    --------    --------------
------------------
(1) Gives pro forma effect to (i) the Tax Distribution to the Principals in the
    amount of $1.2 million and (ii) the creation of a net deferred tax liability
    in the amount of $6.2 million arising in connection with the Company's

    conversion to a C corporation. See 'The Reorganization and Change in Tax
    Status' and Notes 2 and 3 to the Combined Financial Statements of the J.G.
    Wentworth Affiliated Companies.
 
(2) Gives pro forma effect to the Reorganization and issuance and sale by the
    Company of 4,000,000 shares of Common Stock offered hereby at the assumed
    initial public offering price of $15.00 per share (the mid-point of the
    price range set forth on the cover page of this Prospectus) and the
    application of the net proceeds therefrom, including an assumed $54.8
    million to be paid to reduce amounts outstanding under the Credit
    Facilities. See 'Use of Proceeds' and Notes 1 and 2 to the Combined
    Financial Statements of the J.G. Wentworth Affiliated Companies.
 
                                       21

<PAGE>
                                    DILUTION
 
     Purchasers of the Common Stock offered hereby will experience an immediate
and substantial dilution in the net tangible book value of their Common Stock
from the initial public offering price. The pro forma negative net tangible book
value of the Company as of June 30, 1997 was $(8.1) million or $(0.66) per
share. Pro forma negative net tangible book value per share is determined by
dividing the net negative tangible book value of the Company on a pro forma
basis (total tangible assets less total liabilities) by the number of shares of
Common Stock outstanding on a pro forma basis, after giving effect to the
Reorganization. After giving effect to the sale by the Company of 4,000,000
shares of Common Stock offered by the Company at an assumed initial public
offering price of $15.00 per share (the mid-point of the price range set forth
on the cover page of this Prospectus), after deducting underwriting discounts
and commissions and estimated offering expenses, the pro forma net tangible book
value of the Company as of June 30, 1997 would have been $46.7 million or $2.84
per share. This represents an immediate increase in pro forma net tangible book
value of $3.50 per share to the Existing Stockholders and an immediate and
substantial dilution in pro forma net tangible book value of $12.16 per share to
new investors purchasing Common Stock in the Offering. The following table
illustrates this per share dilution:
 
Initial public offering price per share at
  June 30, 1997..............................              $ 15.00
        Negative net tangible book value per
           share at June 30, 1997............   $ (0.06)
        Decrease attributable to Tax
           Distribution......................     (0.10)
        Decrease due to deferred tax
           liability.........................     (0.50)
                                                -------
                                                  (0.66)
        Increase in net tangible book value
           per share attributable to new
           public investors..................      3.50
Pro forma net tangible book value per share
  after the Offering.........................                 2.84
                                                           -------
Dilution per share to new public investors...              $ 12.16
                                                           -------
                                                           -------
------------------
     The following table summarizes, on a pro forma basis (as described above)
as of June 30, 1997, the number of shares of Common Stock purchased from the
Company, the total consideration paid to the Company and the average price per
share paid by the Existing Stockholders (which for the purposes of this table is
assumed to be zero) and by the new investors purchasing shares of Common Stock
in the Offering, at an assumed initial public offering price of $15.00 per share
(the mid-point of the price range set forth on the cover page of this
Prospectus) and before deducting underwriting discounts and commissions and
estimated offering expenses:

<TABLE>
<CAPTION>
                             SHARES PURCHASED        TOTAL CONSIDERATION       AVERAGE
                           ---------------------    ----------------------      PRICE
                             NUMBER      PERCENT      AMOUNT       PERCENT    PER SHARE
                           ----------    -------    -----------    -------    ---------
<S>                        <C>           <C>        <C>            <C>        <C>
Existing Stockholders...   12,466,667      75.7%    $        --        --%     $    --
New Investors...........    4,000,000      24.3%     60,000,000       100%       15.00
Total...................   16,466,667     100.0%    $60,000,000       100%     $  3.64
                                         -------    -----------    -------
                                         -------    -----------    -------
</TABLE>
 
     The foregoing tables assume that the Underwriters' over-allotment option to
purchase 793,011 shares of Common Stock to be granted prior to the completion of
the Offering with an exercise price per share equal to the initial public
offering price will not be exercised. See 'Management -- 1997 Stock Incentive
Plan' and 'Underwriting.'
 
                                       22

<PAGE>
                        SELECTED COMBINED FINANCIAL DATA
 
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     The following table contains certain combined financial data of the Company
and is qualified by the more detailed Combined Financial Statements of the J.G.
Wentworth Affiliated Companies and Notes thereto included elsewhere in this
Prospectus. The combined statement of operations data for the years ended
December 31, 1994, 1995, and 1996 and the combined balance sheet data as of
December 31, 1995 and 1996 have been derived from the Combined Financial
Statements of the J.G. Wentworth Affiliated Companies which have been audited by
Coopers & Lybrand L.L.P., independent accountants, as indicated in their report
included elsewhere in this Prospectus. The selected combined statement of
operations data for the years ended December 31, 1992 and 1993 and for the six
months ended June 30, 1996 and 1997 and the combined balance sheet data as of
December 31, 1992, 1993 and 1994, and June 30, 1997 of the J.G. Wentworth
Affiliated Companies have been derived from unaudited combined financial
statements. The combined unaudited financial statements, in the opinion of
management, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the financial condition and
results of operations for such periods. The results of operations for the six
months ended June 30, 1996 and June 30, 1997 are not necessarily indicative of
the results that may be expected for any other interim period or for the entire
year. The selected combined financial data set forth below should be read in
conjunction with 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and all of the Combined Financial Statements of the
J.G. Wentworth Affiliated Companies and Notes thereto included elsewhere in this
Prospectus. The selected pro forma combined financial data should be read in
conjunction with Note 1 to the Combined Financial Statements of the J.G.
Wentworth Affiliated Companies included elsewhere in this Prospectus. The
following table also includes certain unaudited pro forma combined statement of
operations data for the year ended December 31, 1996 and the six months ended
June 30, 1997 which give effect to the Reorganization, the Offering and certain
other adjustments as if they had occurred on June 30, 1997.
 
<TABLE>
<CAPTION>
                                                                                                           SIX MONTHS ENDED
                                                      YEAR ENDED DECEMBER 31,                                  JUNE 30,
                                -------------------------------------------------------------------    -------------------------
                                   1992          1993          1994          1995          1996           1996          1997
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
                                (UNAUDITED)   (UNAUDITED)                                              (UNAUDITED)   (UNAUDITED)
<S>                             <C>           <C>           <C>           <C>           <C>            <C>           <C>
INCOME STATEMENT DATA:
Revenues:
  Interest income.............    $    --       $   389       $ 2,755       $ 8,560     $    10,426      $ 5,601     $     8,743
  Gain on sale of
    receivables...............         --            --            --           268             576           --          11,419
  Other income................        249         1,008           417           894             785          319             386
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
    Total revenues............        249         1,397         3,172         9,722          11,787        5,920          20,548
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------

Expenses:
  Interest expense............         --           163         1,541         4,995           6,380        2,820           4,783
  Salaries and benefits.......         42           453           686         1,509           1,992          697           2,384
  Marketing expenses..........         --            45           148           224           3,606        1,010           3,682
  Other operating expenses....        214           661           873         1,350           3,384        2,588           1,800
  Provision for credit
    losses....................         --            --            --            --             500          165           1,630
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
    Total expenses............        256         1,322         3,248         8,078          15,862        7,280          14,279
Income (loss) before
  extraordinary loss..........         (7)           75           (76)        1,644          (4,075)      (1,360)          6,269
Extraordinary loss............         --            --            --           876              --           --              --
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
Net income (loss).............    $    (7)      $    75       $   (76)      $   768     $    (4,075)     $(1,360)    $     6,269
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
UNAUDITED PRO FORMA
  INFORMATION:
Pro forma (benefit) provision
  for income taxes (1)........                                                          $    (1,508)                 $     2,320
                                                                                        -----------                  -----------
Pro forma net income (loss)
  (1).........................                                                          $    (2,567)                 $     3,949
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
PER SHARE DATA:
Pro forma net income (loss)
  per share (1)(2) ...........                                                          $     (0.20)                 $      0.31
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
Pro forma number of shares
  outstanding (1)(2)..........                                                           12,549,134                   12,549,134
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
</TABLE>
                                       23

<PAGE>
<TABLE>
<CAPTION>
                                                         DECEMBER 31,                                   JUNE 30,
                            -----------------------------------------------------------------------    -----------
                               1992           1993           1994           1995           1996           1997
                            -----------    -----------    -----------    -----------    -----------    -----------
                            (UNAUDITED)    (UNAUDITED)    (UNAUDITED)                                  (UNAUDITED)
<S>                         <C>            <C>            <C>            <C>            <C>            <C>
BALANCE SHEET DATA:
Finance receivables......     $    12        $ 3,221        $33,778        $60,104        $90,930       $  71,757
Retained interests.......          --             --             --             --             --           5,219
Servicing asset..........          --             --             --             --             --             890
Total assets.............         246          4,629         35,270         62,987         91,975          81,445
Notes payable, banks.....          --          3,443         32,840         56,907         91,858          75,165
Total liabilities........           4          3,925         34,642         61,943         96,378          82,135
Total equity (deficit)...         242            704            628          1,044         (4,403)           (690)
</TABLE>

<TABLE>
<CAPTION>
                                                                                     SIX MONTHS ENDED
                                          YEAR ENDED DECEMBER 31,                        JUNE 30,
                            ----------------------------------------------------    -------------------
                             1992       1993       1994       1995        1996       1996        1997
                            -------    -------    -------    -------    --------    -------    --------
<S>                         <C>        <C>        <C>        <C>        <C>         <C>        <C>
UNAUDITED OPERATING DATA:
Portfolio Owned and
  Serviced:
  Maturity value.........   $   14     $3,839     $38,799    $74,820    $166,061    $82,377    $245,337
  Carrying value.........   $   12     $3,221     $33,778    $60,104    $ 90,930    $71,255    $142,394
Weighted average yield...     29.7 %     26.2 %      18.0%      14.0%       20.2%      17.4%       22.4%
Allowance for credit
  losses.................       --         --          --         --    $    500    $   165    $  1,630
Allowance for credit
  losses as a percentage
  of portfolio owned.....       --         --          --         --         0.8%       0.2%        2.3%
Net charge-offs..........       --         --          --         --          --         --    $    610
Net charge-offs as a
  percentage of average
  portfolio owned........       --         --          --         --          --         --         0.6%

Structured Settlements:
  Total number of
    receivables
    originated...........       --         --          --        136       2,197        577       2,219
  Cost of receivables
    originated...........       --         --          --    $ 4,916    $ 56,004    $17,762    $ 48,889
  Maturity value of
    receivables
    originated...........       --         --          --    $13,674    $125,697    $41,242    $103,239
  Weighted average
    yield................       --         --          --       20.5%       22.3%      20.7%       23.2%
  Weighted average
    maturity (in
    years)...............       --         --          --        9.1         6.5        7.6         6.1
  Total number of
    defaulted
    receivables..........       --         --          --          2          34          6          71
  Total number of
    defaulted payments...       --         --          --          4         146         33         321
  Carrying amount of
    defaulted payments...       --         --          --    $     7    $    200    $    39    $    334
  Carrying value of
    defaulted
    receivables..........       --         --          --    $    40    $  1,313    $   151    $  3,280
  Percentage of defaulted
    receivables..........       --         --          --        0.8%        2.2%       0.7%        3.1%
  Net charge-offs........       --         --          --         --          --         --    $    610
  Net charge-offs as a
    percentage of
    portfolio owned......       --         --          --         --          --         --         0.7%

Other Deferred Payment
  Obligations:
  Total number of
    receivables
    originated...........        1        475       2,637      4,610       1,409        919         354
  Cost of receivables
    originated...........   $   12     $1,427     $31,854    $53,213    $ 17,052    $12,280    $  4,192
  Maturity value of
    receivables
    originated...........   $   14     $1,871     $38,745    $62,851    $ 19,738    $14,217    $  4,905
  Weighted average
    yield................     29.7 %     26.2 %      18.1%      14.1%       13.2%      12.7%       13.5%
  Weighted average
    maturity (in
    years)...............      0.5        1.1         1.2        1.3         1.2        1.3         1.2
  Total number of
    delinquent
    receivables..........       --         --          --         13          20         16          10
  Carrying value of
    delinquent
    receivables..........       --         --          --        133         197        127          63
  Delinquent receivables
    as a percentage of
    average portfolio....       --         --          --        0.3%        0.7%       0.3%        0.4%
  Net charge-offs........       --         --          --         --          --         --          --
</TABLE>
------------------
(1) Prior to the Reorganization, JGW and the General Partners were treated as S
    corporations for state and federal income tax purposes. The pro forma
    presentation reflects the provision for income taxes as if JGW and the
    General Partners had always been C corporations and the activities of the
    Partnerships had always been taxed as if owned by the Company at an assumed
    effective tax rate of 37%.
 
(2) Pro forma net income (loss) per share is computed based on 12,466,667 shares
    of Comon Stock outstanding before the Offering and gives effect to the
    Reorganization and reflects the 82,467 shares of Common Stock which would
    need to be issued to generate the cash necessary to fund the Tax
    Distribution at an assumed initial public offering price of $15.00 per share
    (the mid-point of the price range set forth on the cover page of this
    Prospectus). See 'The Reorganization and Change in Tax Status.'
 
                                       24

<PAGE>
               MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
 
     The following discussion should be read in conjunction with the Combined
Financial Statements of the J.G. Wentworth Affiliated Companies and the Notes
thereto included elsewhere in this Prospectus.
 
GENERAL
 
     Overview.  The Company is a specialty finance company that originates,
securitizes and services rights to receive payments from structured settlements
and other deferred payment obligations. In 1991, the Company was formed as a
merchant banking firm to pursue healthcare related transactions. It entered the
business of purchasing deferred payment obligations with the purchase of
deferred auto insurance settlement obligations of the JUA in 1992, and of MTF
and other entities in 1994. Because neither the JUA nor MTF currently defer
significant amounts of new settlement obligations, the Company's acquisition of
these claims has decreased and is not expected to increase in the near future.
In August 1995, the Company commenced the purchase of structured settlements
from private litigation claimants. This has been the Company's primary business
since 1995. The Company generates revenues from interest income earned on these
originations and the ultimate disposition of these obligations. The Company
continued to engage in the merchant banking business and earned brokerage fees
and commissions which are included in other income in the combined financial
statements for periods prior to October 1996. In October 1996, the investment
banking business was split into separate entities which are not included in the
combined financial statements subsequent to that date. The new entities formed
in October 1996 are owned by Messrs. Delaney and Veloric and it is their intent
to dispose of their entire investment in these entities prior to the completion
of the Offering.
 
     To date, the Company has not experienced any significant seasonal
variations in its acquisitions of receivables.
 
     Recent Growth.  The Company has experienced significant growth particularly
since August 1995. Management believes that this growth is primarily
attributable to (i) development of its originations staff and systems; (ii) the
development of a national brand identity through television and other
advertising; (iii) strong relationships with referral sources; (iv) the
Company's further penetration into its established markets; and (v) adequate
funding sources from credit facilities and securitizations to finance
originations.
 
     There can be no assurance that the Company will continue to grow
significantly in the future. Future growth may be limited by, among other
things, the Company's need for continued funding sources, access to capital
markets, ability to attract and retain qualified personnel, fluctuations in
interest rates, competition from existing competitors and new market entrants,
changes in regulation and legislation and other market conditions.
 
     The Company's recent and rapid growth may have a somewhat distortive impact
on certain of the Company's ratios and financial statistics and may make
period-to-period comparisons less meaningful. In light of the Company's growth,

the Company's historical earnings may be of limited relevance in predicting
future performance. Furthermore, the Company's recent earnings and other
financial results may not be indicative of the Company's results in future
periods. Any credit or other problems associated with the large number of
receivables acquired in the recent past may not become apparent until sometime
in the future. See 'Risk Factors -- Ability of the Company to Continue Growth
Strategy' and '-- Risks Associated with Structured Settlements -- Limited
Operating Experience in Structured Settlements.'
 
ACCOUNTING CONSIDERATIONS
 
     Revenue Recognition.  The Company purchases deferred payment obligations at
an amount less than maturity value. The difference between the purchase price
and the maturity value is recorded as unearned income. Unearned income is
recognized as interest income on the interest method over the life of the
related deferred payment obligation.
 
                                       25
<PAGE>
     The Company, in accordance with a Statement of Financial Accounting
Standards No. 91, Accounting for Non-refundable Fees and Costs Associated with
Originations or Acquiring Loans and Indirect Costs of Leases ('SFAS 91'), defers
certain incremental origination costs which are then amortized as an adjustment
to interest income over the life of the related deferred payment obligations
using the interest method.
 
     There are certain expenses incurred by the Company, marketing and other
indirect costs of origination, which are expended currently as operating
expenses, but for which the related income originated is earned in the future.
The Company records marketing expenses and other costs of origination that are
not capitalized under SFAS 91 but are expensed as incurred. The effect of
expensing these costs, particularly marketing expenses, is a primary cause of
the net loss in 1996.
 
     Securitization.  As a part of its business and financing strategy the
Company intends regularly to securitize rights to receive payment from
structured settlements. In a securitization, receivables originated by the
Company are sold to a special purpose entity which issues interests to
independent investors. The Company sells the receivables for a cash price and
records a Retained Interest. The book value of the Retained Interest is
calculated as the difference between the maturity value to be received from the
structured receivables sold and the sum of: (i) principal and interest to be
paid to the independent investors; (ii) trustee fees; (iii) servicing fees; and
(iv) credit losses projected to be sustained by the securitized pool. The
Company's right to the excess cash flows is subordinated to certain reserve
requirements specific to each securitization which function as a means of credit
enhancement. The Company determines the present value of the anticipated excess
cash flows at the time each securitization transaction closes using valuation
assumptions for that securitization and records an asset called the Retained
Interest.
 
     The Retained Interest is classified as being 'held to maturity' and
therefore is carried at amortized cost in accordance with Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and

Equity Securities. The Retained Interest is recorded by the Company based on an
allocation of fair value based on the structured receivables sold. Valuation
assumptions for the Retained Interest are generally related to the maturity
value of the securitized receivables, market and economic conditions and the
anticipated credit losses associated with the receivables. Structured
receivables do not have prepayment risk. The Company's risk is limited to its
Retained Interest and the settlement cash reserve. Consequently, the Company has
not recorded a valuation allowance or recorded a writedown for the six months
ended June 30, 1997 or 1996, 1995 or 1994. The excess cash flows were discounted
at a 13% rate which provides for valuation including possible credit losses and
current market and economic conditions.
 
     Gains or losses are determined based upon the difference between the sale
proceeds of the receivables sold and the allocation of recorded investment
therein. The Company allocates the recorded investment in the receivables
between the receivables sold, the Retained Interest and the servicing asset
based on the relative fair values of those portions on the date of sale.
 
     The value of a servicing asset is determined by allocating the receivables'
previous carrying amount among the servicing asset, the receivables that were
sold, and the Retained Interest, if any, based on their relative fair values at
the date of sale. The fair value of the servicing asset is initially calculated
from market estimates of other servicing arrangements using a discount rate that
management believes is appropriate where available; or alternatively, the fair
value is based on an analysis of discounted cash flows that incorporates
estimates of: (i) market servicing costs; (ii) servicing revenue; and (iii)
market profit margins. The servicing asset is amortized in proportion to, and
over the period of, estimated net servicing income. The servicing asset recorded
by the Company as of June 30, 1997 amounted to $890,000.
 
     There can be no assurance that the Company's estimates used to determine
Gain on Sale and servicing asset valuations will remain appropriate for the life
of each securitization. If actual losses exceed the Company's estimates, the
carrying value of Company's servicing asset may have to be written down or the
Company may record a charge against its earnings during the period within which
management recognizes the disparity. See 'Risk Factors -- Valuation and
Potential Impairment of Retained Interest.'
 
                                       26
<PAGE>
     Allowance for Credit Losses.  An allowance for credit losses is maintained
at a level management considers adequate to provide for possible losses based on
known defaulted or delinquent claims, economic conditions and other relevant
factors. The Company calculates its allowance for credit losses in accordance
with Statement of Financial Accounting Standards No. 114, Accounting by
Creditors for Impairment of a Loan. Management considers its portfolio of
receivables to be homogenous except large dollar receivables, defined as
receivables with a purchase price in excess of $250,000. Management individually
determines the valuation of impairment on large receivables and collectively
evaluates the remaining portfolio for impairment. Management will charge-off the
receivables balance at the time it determines it to be uncollectible or if no
progress has been made to restore payments of the defaulted claim for a 12-month
period.
 

TERMINATION OF S CORPORATION STATUS, PARTNERSHIP STATUS AND INCOME TAXES
 
     Prior to the Reorganization, each of JGW and the General Partners had
elected to be taxed as an S corporation under the Code and applicable provisions
of Pennsylvania law. No provision was made for income taxes by such entities
since all income was taxed directly to, and losses and tax credits utilized
directly by, the stockholders or partners.
 
     Upon the completion of the Reorganization, JGW and the General Partners
will terminate their S corporation status, the Company will directly or
indirectly own 100% of the Partnerships and will be taxed as a C corporation and
adopt Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes ('SFAS 109'). See 'The Reorganization and Change in Tax Status.' Under the
asset and liability method prescribed by SFAS 109, deferred tax assets and
liabilities are recognized for future tax consequences attributable to temporary
differences between the accounting carrying amounts of existing assets and
liabilities and their respective tax bases using currently enacted tax rates.
The effect on deferred tax assets or liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date of the tax
change. Under SFAS 109, deferred tax assets are recognized for deductible
temporary differences and operating loss and tax credit carry forwards, and then
a valuation allowance is established to reduce that deferred tax asset if it is
'more likely than not' that the related tax benefits will not be realized.
 
     On a pro forma basis, the net deferred tax liability resulted primarily
from differences in the treatment of income earned and treatment of the
securitization transaction. The net deferred tax liability will be recorded as a
non-cash charge to the provision for taxes in the quarter in which the Offering
is completed and may result in the Company reporting a net loss for the quarter.
The pro forma provision for income taxes in the accompanying combined statements
of operations shows results as if the Company had always been fully subject to
federal and state taxes at an assumed tax rate of 37%.
 
RESULTS OF OPERATIONS
 
  Six Months Ended June 30, 1997 Compared To Six Months Ended June 30, 1996
 
     Revenues.  Total revenues increased by $14.6 million, or 247.5%, to $20.5
million for the six months ended June 30, 1997 from $5.9 million for the six
months ended June 30, 1996. This increase was primarily due to the $11.3 million
Gain on sale of receivables sold in the June 1997 securitization and the
increase in interest earned as a result of increases in the size of the
Company's originations and receivables portfolio.
 
     Interest Income.  Interest income increased by $3.1 million, or 55.4%, to
$8.7 million for the six months ended June 30, 1997 from $5.6 million for the
six months ended June 30, 1996. This increase resulted from an increase in the
average balance of finance receivables which was a result of increased
originations of structured settlements partially offset by a decrease in
acquisitions of other deferred payment obligations which resulted in higher
weighted average yield on the Company's receivables. As a result of the higher
yields experienced on structured settlement receivables, the average portfolio
yield was 20.4% for the six months ended June 30, 1997 compared to 17.4% for the
six months ended June 30, 1996. The Company has adopted a strategy of retail

origination to minimize its dependence on outside brokers. Through retail
originations, the Company avoids paying broker fees and establishes a direct
relationship with its customers which often lead to 'continuations.'
Continuations occur when
 
                                       27
<PAGE>
claimants sell the Company a portion of their payments due under their
structured settlement and subsequently sell another portion of their payments at
a later time. Continuations give the Company the opportunity to develop a
history with a claimant prior to making additional purchases and, therefore,
potentially minimize risk of loss. The following is a table of originations,
yields and maturities:
 
                                                 SIX MONTHS ENDED JUNE
                                                          30,
                                                ------------------------
ORIGINATIONS INFORMATION                          1996            1997
---------------------------------------------   --------        --------
                                                (DOLLARS IN THOUSANDS)
Structured Settlements:
  Maturity value.............................   $ 41,242        $103,239
  Unearned discount..........................    (23,480)        (54,350)
                                                --------        --------
  Purchase price.............................   $ 17,762        $ 48,889
                                                --------        --------
                                                --------        --------
  Broker referrals...........................       48.0%            6.8%
  Retail originations........................       52.0%           93.2%
  Continuations as a percentage of
     originations............................       17.0%           28.5%
 
Other Deferred Payment Obligations:
  Maturity value.............................   $ 14,217        $  4,905
  Unearned discount..........................     (1,937)           (713)
                                                --------        --------
  Purchase price.............................   $ 12,280        $  4,192
                                                --------        --------
                                                --------        --------
Weighted Average Yields on Originations:
  Structured settlements.....................       20.7%           23.2%
  Other deferred payment obligations.........       12.7%           13.5%
 
Weighted Average Maturity in Years (at
  origination):
  Structured settlements.....................        7.6             6.1
  Other deferred payment obligations.........        1.3             1.2
 
     Gain on Sale of Receivables.  The Company completed its first
securitization and recorded a Gain on sale of receivables of $11.3 million in
the six months ended June 30, 1997. The Company securitized receivables with a
book value of $51.3 million, including initial direct costs of origination, and
received cash totaling $59.5 million and a Retained Interest with a book value
of $5.2 million. Included in Gain on sale of receivables at June 30, 1997 is a

Gain on sale of lottery claims totaling $135,000. No receivables were sold
during the six months ended June 30, 1996. In connection with the June 1997
securitization, the Company recorded a servicing asset of $890,000.
 
     Other Income.  Other income consists primarily of income earned for
management and other services provided to entities affiliated with Messrs.
Veloric and Delaney. See 'Certain Relationships and Related Party Transactions.'
Other income increased by $67,000, or 21.0%, to $386,000 for the six months
ended June 30, 1997 from $319,000 for the six months ended June 30, 1996. This
increase was the result of an increase in the management fees offset by a
decrease in brokerage fees and commissions due to the separation of the
investment banking business discussed above. Since Messrs. Veloric and Delaney
intend to complete the divestiture of these interests, the Company does not
expect that this income will recur after the completion of the Offering.
 
     Expenses.  Interest expense increased by $2.0 million, or 71.4%, to $4.8
million for the six months ended June 30, 1997 from $2.8 million for the six
months ended June 30, 1996. Interest expense increased primarily because of
significant increases in the average borrowings outstanding under the Credit
Facilities in the six months ended June 30, 1997. Average borrowings outstanding
under the Credit Facilities were $107.3 million for the six months ended June
30, 1997 and bore interest at a weighted average rate of approximately 8.8%.
Average borrowings outstanding under the Credit Facilities were $64.1 million
for the six months ended June 30, 1996 and bore interest at a weighted average
rate of approximately 8.8%.
 
     Salaries and benefits expense increased by $1.7 million, or 244.3%, to $2.4
million for the six months ended June 30, 1997 from $697,000 for the six months
ended June 30, 1996. The Company employed 167 persons on a full-time equivalent
basis as of June 30, 1997 and 69 persons on a full-time
 
                                       28
<PAGE>
equivalent basis as of June 30, 1996, an increase of 142.0%. This increase was
principally the result of an increase in the Company's origination and servicing
activities related to structured settlements.
 
     Marketing expenses increased by $2.7 million, or 270.0%, to $3.7 million
for the six months ended June 30, 1997 from $1.0 million for the six months
ended June 30, 1996 primarily because of the significant increase in the
Company's television, radio and print media-based origination activities. During
the six months ended June 30, 1997, the Company ran 33,827 television
commercials compared to 2,049 for the six months ended June 30, 1996. The
Company's ratio of marketing expenses to receivable originations was 3.4% for
the six months ended June 30, 1997, compared to 1.8% for the six months ended
June 30, 1996. This increase in the ratio of the Company's marketing expenses to
originations is a result of the Company's decreased reliance on brokers as a
source of originations.
 
     Other expenses decreased by $788,000, or 30.8%, to $1.8 million for the six
months ended June 30, 1997 from $2.6 million for the six months ended June 30,
1996. Other expenses include rent, office supplies, legal and professional fees
and other general and administrative expenses. This decrease resulted from the
Company refining its estimate of direct origination costs to be deferred in

accordance with SFAS 91. The increase in deferred costs resulted in a decrease
in other expenses in the six months ended June 30, 1997.
 
     The provision for credit losses increased by $1.4 million to $1.6 million
for the six months ended June 30, 1997 from $165,000 for the six months ended
June 30, 1996. The increase in the provision for credit losses for the six
months ended June 30, 1997, resulted primarily from a review of the portfolio in
light of the increase in originations of structured settlements of 175.2%.
 
  Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
 
     Revenues.  Total revenues increased by $2.1 million, or 21.6%, to $11.8
million in 1996 from $9.7 million in 1995 primarily due to the $51.0 million
increase in originations of rights to payment under structured settlements
offset by a $36.2 million decline in originations of other deferred payment
obligations.
 
                                       29

<PAGE>
     Interest Income.  Interest income increased by $1.8 million, or 20.9%, to
$10.4 million in 1996 from $8.6 million in 1995 as a result of an increased
volume in the origination of structured settlements and overall increase in
weighted average yields. The average yields have increased as a result of
increased direct originations versus broker referrals and the increasing
concentration of higher yield structured settlements in the Company's mix of
receivables. The average yield on receivables increased to 20.2% in 1996 versus
14.0% in 1995. The following is a table of originations, yields and maturities:
 
                                                YEAR ENDED DECEMBER 31,
                                                -----------------------
ORIGINATIONS INFORMATION                         1995            1996
---------------------------------------------   -------        --------
                                                (DOLLARS IN THOUSANDS)
Structured Settlements:
  Maturity value.............................   $13,674        $125,697
  Unearned discount..........................    (8,758)        (69,693)
                                                -------        --------
  Purchase price.............................   $ 4,916        $ 56,004
                                                -------        --------
                                                -------        --------
  Broker referrals...........................      68.8%           32.6%
  Retail originations........................      31.2%           67.4%
  Continuations as a percentage of
     originations............................       8.2%           15.2%
 
Other Deferred Payment Obligations:
  Maturity value.............................   $62,851        $ 19,738
  Unearned discount..........................    (9,638)         (2,686)
                                                -------        --------
  Purchase price.............................   $53,213        $ 17,052
                                                -------        --------
                                                -------        --------
Weighted Average Yields on Originations:
  Structured settlements.....................      20.5%           22.3%
  Other deferred payment obligations.........      14.1%           13.2%
 
Weighted Average Maturity in Years (at
  origination):
  Structured settlements.....................       9.1             6.5
  Other deferred payment obligations.........       1.3             1.2
 
     Gain on Sale of Receivables.  The Gain on sale of receivables increased by
$308,000, or 114.9%, to $576,000 in 1996 from $268,000 in 1995 and represented
gains on sale of lottery claims purchased and sold to financial institutions.
 
     Other Income.  Other income decreased by $109,000, or 12.2%, to $785,000 in
1996 from $894,000 in 1995. This income consisted principally of consulting and
brokerage fees related to merchant banking operations. Since the Company in 1996
transferred the operations of these businesses to entities controlled by Messrs.
Delaney and Veloric, this income will not recur after the completion of the
Offering.
 

     Expenses.  Interest expense increased by $1.4 million, or 28.0%, to $6.4
million in 1996 from $5.0 million in 1995 primarily because of significant
increases in the average borrowings outstanding under the Company's credit
facilities in 1996. Average borrowings outstanding under the Company's credit
facilities were $74.4 million for 1996 and bore interest at a weighted average
rate of approximately 8.8%. Average borrowings outstanding under the Credit
Facilities were $50.0 million for 1995 and bore interest at a weighted average
rate of approximately 9.2%.
 
     Salaries and benefits expense increased by $483,000, or 33.3%, to $2.0
million in 1996 from $1.5 in 1995. The Company employed 106 persons on a
full-time equivalent basis as of December 31, 1996, and 40 persons on a
full-time equivalent basis as of December 31, 1995, an increase of 165.0%. This
increase was principally the result of an increase in the Company's origination
and servicing activities related to structured settlements.
 
     Marketing expenses increased by $3.4 million to $3.6 million in 1996 from
$224,000 in 1995. Marketing expenses increased primarily because of the
significant increase in the Company's television, radio and print media-based
originations activities. The Company commenced its television
 
                                       30
<PAGE>
advertising campaign in March 1996. Prior to that time, the Company was
advertising only in print media.
 
     Other expenses increased by $2.0 million, or 142.9%, to $3.4 million in
1996 from $1.4 million in 1995. This increase is principally related to the
growth in the structured settlement business in 1996.
 
     The Company provided $500,000 as a provision for credit losses in 1996 as
an estimate of potential losses. The Company's structured settlement business
grew in 1996 and the provision was based on possible losses based on this
growth.
 
     Extraordinary Loss.  In March 1995, the Company refinanced all of its then
outstanding notes payable. The Company incurred an extraordinary loss of
$876,000 representing $456,000 of deferred financing costs and $420,000 of
profit sharing payments under a provision of its debt agreement, both of which
were expensed in 1995.
 
  Year Ended December 31, 1995 Compared to Year Ended December 31, 1994
 
     Revenues.  Total revenues increased by $6.5 million, or 203.1%, to $9.7
million in 1995 from $3.2 million in 1994 primarily due to an increase in the
volume of other deferred payment obligations originated by the Company and its
entrance into the market for structured settlements.
 
     Interest Income.  Interest income increased by $5.8 million, or 207.1%, to
$8.6 million in 1995 from $2.8 million in 1994 as a result of the increase in
the acquisition of other deferred payment obligations and the commencement in
August 1995 of the origination of structured settlements. A comparison of
originations, referral sources, weighted average yield and maturities were as
follows:

 
                                                 YEARS ENDED DECEMBER
                                                         31,
                                                ----------------------
ORIGINATIONS INFORMATION                         1994           1995
---------------------------------------------   -------        -------
                                                (DOLLARS IN THOUSANDS)
Structured Settlements:
  Maturity value.............................   $    --        $13,674
  Unearned discount..........................        --         (8,758)
                                                -------        -------
  Purchase price.............................   $    --        $ 4,916
                                                -------        -------
                                                -------        -------
  Broker referrals...........................        --           68.8%
  Retail originations........................        --           31.2%
  Continuations as a percentage of
     originations............................        --            8.1%
 
Other Deferred Payment Obligations:
  Maturity value.............................   $38,745        $62,851
  Unearned discount..........................    (6,891)        (9,638)
                                                -------        -------
  Purchase price.............................   $31,854        $53,213
                                                -------        -------
                                                -------        -------
Weighted Average Yields on Originations
  Structured settlements.....................        --           20.5%
  Other deferred payment obligations.........      18.1%          14.1%
 
Average Life in Years (at origination)
  Structured settlements.....................        --            9.1
  Other deferred payment obligations.........       1.2            1.3
 
     Gain on Sale of Receivables.  The $268,000 Gain on sale of receivables in
1995 related to lottery claim sales in 1995. There were no similar sales in
1994.
 
     Other Income.  Other income increased by $477,000, or 114.4%, to $894,000
in 1995 from $417,000 in 1994. Other income consists primarily of commissions
and brokerage fees earned. Since the Company in 1996 transferred the operations
of these businesses to entities controlled by Messrs. Delaney and Veloric, this
income will not recur after the completion of the Offering.
 
     Expenses.  Interest expense increased by $3.5 million, or 233.3%, to $5.0
million in 1995 from $1.5 million in 1994 primarily because of significant
increases in the average borrowings outstanding under the Credit Facilities in
1995. Average borrowings outstanding under the Credit Facilities were
 
                                       31
<PAGE>
$50.0 million in 1995 and bore interest at a weighted average rate of
approximately 9.2%. Average borrowings outstanding under the Credit Facilities
were $16.2 million in 1994 and bore interest at a weighted average rate of

approximately 10.2%.
 
     Salaries and benefits expense increased by $823,000 million, or 118.7%, to
$1.5 million in 1995 from $686,000 in 1994. The Company employed 40 persons on a
full-time equivalent basis as of December 31, 1995 and 32 persons on a full-time
equivalent basis as of December 31, 1994, an increase of 25.0%. This increase
was principally the result of an increase in the Company's commencement of
originations of structured settlements in August 1995.
 
     Marketing expenses increased by $76,000, or 51.4%, to $224,000 million in
1995 from $148,000 in 1994. This increase was the result of additional
advertising being conducted in 1995.
 
     Other expenses increased by $477,000, or 60.4%, to $1.4 million in 1995
from $873,000 in 1994. This increase was related to the commencement of the
acquisition of structured settlements in August 1995.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company has experienced, and expects to continue experiencing, negative
cash flow in its operations and requires continued access to financing sources.
The Company's primary operating cash requirements include the funding of (i)
receivables originations, (ii) reserve accounts, overcollateralization
requirements, fees and expenses incurred in connection with its securitization
transactions, (iii) payments due under the Credit Facilities, (iv) tax payments
due on the Company's taxable net income, (v) television, radio and direct mail
advertising and other marketing and (vi) administrative and other operating
expenses.
 
     Adequate credit facilities and other sources of funding, which permit the
Company to fund its operating cash requirements and to securitize or sell
receivables in the secondary market, are essential to the continuation of the
Company's ability to originate and purchase loans. After utilizing available
working capital, the Company borrows money to fund its receivables originations,
and repays these borrowings as the receivables are collected or are sold. Upon
securitization and the subsequent repayment of the borrowings, the Credit
Facilities then become available to fund additional receivables originations.
 
     Cash used in operations increased $1.1 million, or 12.7%, to $9.7 million
for the six months ended June 30, 1997 from $8.6 million for the six months
ended June 30, 1996. The increase resulted primarily from increased salaries and
benefits, marketing and other indirect organization and other costs to grow the
structured settlement receivables business.
 
     Cash provided by investing activity was $30.3 million for the six months
ended June 30, 1997 compared with cash used of $5.9 million for the six months
ended June 30, 1996. The increase in cash provided related to the cash received
from the securitization of receivables in June 1997 offset by an increase in the
purchase of deferred payment obligation receivables.
 
     Cash used in financing activities was $20.0 million for the six months
ended June 30, 1997 compared with cash provided by financial activities of $13.4
million for the six months ended June 30, 1996. This increase in cash used
related to the repayment of notes payable to banks using the proceeds of the

securitization.
 
     The Company's total borrowing authority under the Credit Facilities totals
$125.0 million. The SSC Facility, a $105.0 million facility with ING and a bank
which expires on August 25, 1998, bears interest at a rate of 3.5% above the
then current London Interbank Offered Rate ('LIBOR') and if not extended is
converted to a term loan. The MFC Facility also provided by ING and a bank
totals $20.0 million in borrowing authority, bears interest at a rate of 1.5%
above LIBOR and expires May 20, 1998. Like the SSC Facility, the MFC Facility
contains no provision to extend the facility upon expiration. Upon expiration,
the amounts outstanding under the MFC Facility will convert to a term loan. The
SSC Facility is available for the purchase of structured settlements and working
capital while the MFC Facility is available for the purchase of deferred
governmental obligations and working capital governing the MFC Facility. The
Company plans to securitize and sell receivables on a periodic basis. As of
October 3, 1997, the Company had availability of $76.7 million under the SSC
Facility
 
                                       32
<PAGE>
and $7.6 million under the MFC Facility for purchases and other working capital
needs. The proceeds of those securitizations will be used to repay the amounts
outstanding under the Credit Facilities to create availability for future
purchases and working capital. The Company completed a securitization and sale
of receivables that closed in two transactions on September 30 and October 1,
1997 from which it realized proceeds that the Company used to repay and increase
the availability under the Credit Facilities. These arrangements together with
the net proceeds of the Offering are expected to be sufficient to meet cash
requirements to purchase deferred payments and fund operations provided that (i)
the Company completes securitizations and (ii) the Company extends the Credit
Facilities or obtains new credit facilities. There is no assurance that the
Company will be able to extend the Credit Facilities beyond their expiration
dates or obtain replacement financing or favorable terms, if at all.
 
IMPACT OF INFLATION
 
     To date, inflation has had no material effect on the Company's results of
operations. Inflation, however, can have a substantial effect on operating costs
and interest rates. Interest rates normally increase during periods of high
inflation and decrease during periods of low inflation. Profitability may be
directly affected by the level and fluctuation in interest rates which affect
the Company's ability to earn a spread between interest income and costs of its
borrowings. The profitability of the Company is likely to be adversely affected
during any period of unexpected or rapid increases in inflation and related
changes in interest rates.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
     In March 1997, the Financial Accounting Standards Board ('FASB') issued
Statement of Financial Accounting Standards No. 128, Earnings per Share ('SFAS
128'), which supersedes Accounting Principles Board No. 15, Earnings per Share
('APB 15'), and is effective for the Company for both interim and annual periods
for the year ending December 31, 1997. This statement requires restatement of
all prior-period Earnings per Share data presented. SFAS 128 establishes

standards by simplifying the computation and presentation of earnings per share
('EPS'), and applies to entities with publicly held common stock or to-be-issued
common stock. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation.
Basic EPS excludes dilution and is computed by dividing income available to
common stockholders by the weighted-average number of shares of Common Shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other rights to be issued Common Stock were
exercised or converted into Common Stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS pursuant to APB 15. If EPS had been calculated in
accordance with SFAS 128, the basic EPS and diluted EPS for the six months ended
June 30, 1997 would have been the same as primary EPS under APB 15.
 
     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ('SFAS 130'), which is effective for the
Company for the year ending December 31, 1998, and requires restatement of all
prior-period financial statements presented for comparative purposes. SFAS 130
establishes standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of
general-purpose financial statements. SFAS 130 requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. It is anticipated that the
adoption of SFAS 130 will not have a material effect on the financial condition
or results of operations of the Company.
 
                                       33

<PAGE>
                                    BUSINESS
 
GENERAL
 
     The Company is a specialty finance company that originates, securitizes and
services rights to receive payments from structured settlements and other
deferred payment obligations. Deferred payment obligations are contractual
arrangements under which one party has agreed to make fixed, scheduled payments
to another party over time to satisfy an obligation that would otherwise be paid
in an up-front, lump sum. The Company specializes in transactions involving two
types of deferred payment obligations: (i) structured settlements arising from
personal injury litigation as to which highly-rated insurance companies are the
obligor, and, to a lesser extent, (ii) other deferred payment obligations such
as claims arising from personal injury litigation and state-operated lotteries
as to which governmental or quasi-governmental entities are the obligor.
 
     According to industry sources, in excess of $40 billion of annuity premiums
paid to third parties to fund structured settlements were generated from 1980 to
1995 and approximately $4 billion to $5 billion in new structured settlements
are generated each year in the United States. Structured settlements continue to
be an attractive option for claimants and insurance companies because structured
settlements: (i) offer favorable tax treatment to claimants and insurers; (ii)
permit payment flexibility and incorporation of investment management features;
and (iii) lower the cost of compensating victims and thereby help foster timely
settlement of litigation. From the claimants' point of view, however, structured
settlements have a significant weakness, inflexibility. When claimants'
financial needs change, the fixed payment schedule of a structured settlement
may no longer satisfy these needs. The Company's funding programs offer those
claimants the ability to convert their rights to future payments into cash that
they can use for such purposes as paying medical or tuition expenses, purchasing
or improving a home, starting a business or repaying debt.
 
     The Company has achieved significant growth in the number and maturity
value of receivables purchased since commencing operations. From inception to
June 30, 1997, the Company has purchased 14,022 deferred payment obligation
receivables with an aggregate maturity value of $374.8 million. Maturity value
equals the sum of all future payments to be received under a deferred payment
obligation. The Company has generally purchased receivables at a significant
discount from maturity value. The difference between the amount paid by the
Company and the maturity value of the receivables is accrued as income over the
life of the receivable. The weighted average yield of the Company's portfolio
was 22.5% for the six months ended June 30, 1997. The Company's revenues have
increased significantly as the Company's originations volume and portfolio have
grown and the Company has employed securitizations to fund its operations.
Revenues increased from $249,000 in 1992 to $11.8 million in 1996 and $20.5
million in the six months ended June 30, 1997.
 
     In June 1997, the Company completed a $70.8 million securitization in what
it believes is the first investment grade rated securitization of structured
settlement receivables. The Company sold, through a special purpose entity,
$59.5 million of senior pass-through certificates rated 'A2' by Moody's and 'A'
by Duff & Phelps. The Company retained $11.3 million in face value of unrated
subordinated certificates and recorded a Gain on Sale of $11.3 million for the

six months ended June 30, 1997. The Company completed a securitization
transaction in which it securitized $31.0 million of receivables in September
1997 and $41.0 million of receivables in October 1997, and recorded a Gain on
Sale of $6.8 million and $8.0 million, respectively. Structured settlement
receivables and other deferred payment obligations differ from other regularly
securitized financial assets, such as consumer credit card and mortgage loans,
in that (i) prepayment risk is minimal because the timing of scheduled payments
is fixed and (ii) credit risks are low because obligors are typically insurance
companies that have received a credit rating of 'A' or better from A.M. Best or
governmental entities. From inception through December 31, 1996, the Company had
not charged-off any receivables. For the six months ended June 30, 1997, the
Company recorded a net charge-off of 0.6% of the Company's owned portfolio.
 
                                       34
<PAGE>
     The Company does not rely on brokers to originate structured settlements
and other deferred payment receivables and its policies prohibit 'cold calling'
of prospective customers. Instead, the Company utilizes a nationwide television
advertising campaign to identify hard-to-find claimants who want to sell their
payment rights to the Company. Using a 21,520-square-foot inbound call center,
the Company's originations staff responds to claimant inquiries, attempts to
quantify an individual claimant's financial needs and endeavors to structure the
funding transaction to meet those needs. The Company's policies prohibit the
origination of receivables from minors and incompetent persons.
 
     The Company was formed in October 1997 in connection with the
Reorganization as a successor to the businesses of the Affiliated Companies. See
'The Reorganization and Change in Tax Status.' JGW was formed by James D.
Delaney and Gary Veloric in 1991 as a merchant bank specializing in transactions
in the health care industry. In 1992, the Company entered the business of
purchasing the deferred settlement obligations of the JUA, and its successor,
the MTF. As the Company's success in the JUA/MTF market established its
reputation as a creative funding source, it began to search for other
opportunities to purchase income streams that, while secure and predictable, did
not meet the requirements for more traditional means of financing. After
evaluating a number of market possibilities, the Company decided in 1995 to
enter the secondary market for structured settlements. The Company leveraged the
capabilities and systems it developed for the JUA/MTF business and emerged as a
market leader in the business of purchasing structured settlements. In May 1995,
ING extended a credit facility to the Company for funding its origination of
other deferred obligations. In August 1995, the Company and ING expanded their
relationship to include funding the origination of structured settlement
receivables, at which time ING became a stockholder of the Company.
 
STRATEGY
 
     The Company's growth strategy is to increase its originations of deferred
payment receivables and profitability by further enhancing its position as the
leading originator of the rights to receive payments from structured settlements
and other deferred payment obligations. The Company believes that the creation
of a strong brand image will enable the Company to increase profitably the
volume of its receivables originated and the size of its servicing portfolio. To
achieve its profitable growth, the Company intends to continue to:
 

          Increase Retail Originations.  The Company has been successful at
     internally originating leads for the purchase of structured settlements by
     developing brand awareness for the 'Wentworth' name among potential
     claimants through a variety of marketing media, including 88,000
     thirty-second television commercials broadcast nationally from March 1996
     through September 1997. By effectively reaching its target market, the
     Company has virtually eliminated its reliance on brokers. The Company
     currently originates nearly all of its receivables using its own specially
     trained personnel. Independence from the broker community permits the
     Company to control the integrity of its origination process, avoid
     conflicts among origination channels and maintain pricing flexibility. The
     Company operates a 21,520-square-foot call center with approximately 200
     telemarketing workstations that utilize predictive dialing and data
     tracking technology. The Company has a policy that prohibits making
     unsolicited marketing calls to establish initial contact with claimants.
     The call center operates 24 hours a day Monday through Saturday.
 
          Provide Quality Customer Service.  The Company believes that the
     flexibility of its funding options, the speed of its approval process and
     the responsiveness of its customer service personnel help to differentiate
     the Company from its competitors. The Company processes applications from
     claimants who demonstrate that they have a financial need for funding and
     who can establish the existence of the right to be paid under a settlement
     agreement. After the Company has evaluated the claimant's request for
     funding, the Company typically offers the claimant alternative proposals
     for funding. The proposals offer the claimant the choice of funding varying
     portions of scheduled payments depending on the claimant's individual
     funding needs. The Company believes that its turnaround time for processing
     a claim from application to funding compares favorably with its
     competitors. The Company's trained personnel also maintain contact with
 
                                       35
<PAGE>
     claimants during and after the funding process to reduce claimant fraud and
     encourage repeat business.
 
          Maintain High Underwriting Standards.  The Company's comprehensive
     underwriting procedures are designed to ensure the quality of originated
     receivables and to minimize the risk of claimant fraud, payment diversions
     and loss with respect to the receivables. Each claimant file goes through
     several stages of review, including a taped exit interview with the
     claimant, culminating in approval by a Company staff attorney. After
     Company counsel approves a claimant for funding, the Company submits the
     file to Electronic Data Systems, Inc. ('EDS') for back-up review and
     approval prior to disbursing funds. The Company's Underwriting Operations
     Group is located at a separate facility from the Company's Originations
     Group. This physical separation of the divisions and their clearly
     delineated responsibilities provides the Company with an effective checks
     and balances system.
 
          Market to Referral Sources Such as Attorneys and Bankruptcy and Estate
     Trustees.  The Company markets directly to referral sources such as
     attorneys and bankruptcy and estate trustees. The Company maintains contact
     with these sources through a mix of outbound telemarketing, company

     sponsored newsletters and advertising in trade and professional magazines.
     The Company is the only organization that has received endorsement of the
     American Trial Lawyers Association in New Jersey ('ATLA-NJ') in connection
     with its settlement funding programs.
 
          Obtain Institutional Financing and Complete Regular
     Securitizations.  The Company intends to continue to finance its business
     by maintaining strong relationships with institutional sources of capital.
     The Company intends to complete securitizations on a regular basis to
     enhance its liquidity and to reduce outstanding amounts under the Credit
     Facilities and its exposure to fluctuations in interest rates. In June
     1997, the Company completed the securitization of $70.8 million in
     structured settlement receivables, resulting in the realization of a Gain
     on Sale of $11.3 million in the second quarter of 1997. In addition, the
     Company has completed the securitization of an aggregate of approximately
     $31.0 million and $41.0 million in carrying value of structured settlement
     receivables in September and October 1997, respectively.
 
          Maintain its Telecommunications and Information Management
     Systems.  As part of its ongoing effort to increase efficiency, the Company
     has equipped its new on-line call center with a proprietary system that
     tracks information from initial contact with the claimant through
     collection. The Company has recently upgraded its accounting systems and
     proprietary databases and portfolio tracking systems. Its proprietary
     databases were developed with the assistance of EDS and the Company's
     accounting firm. The Company will continue to pursue and evaluate methods
     for improving efficiencies by maintaining and upgrading its
     telecommunications and information management systems.
 
          Expand into New Deferred Payment Market Niches.  The Company regularly
     examines new markets to identify opportunities for completing profitable
     funding transactions. The Company believes that it can replicate its past
     successes in identifying, researching and developing, and then aggressively
     entering and becoming a recognized leader in, the structured settlement and
     other deferred payment obligations markets by applying its analytical and
     empirical approach to new market niches. Company marketing personnel
     maintain regular communication with attorneys, insurers and other market
     participants and gather information on new deferred payment streams and
     funding needs that are compatible with the Company's business model. The
     Company's executive team then analyzes these opportunities and seeks the
     input of the Company's legal staff as to alternative transaction
     structures. In areas perceived as promising, the Company engages in limited
     transactions on a trial basis to evaluate the attractiveness of the
     markets. The Company also intends to consider expanding into new markets by
     the selective acquisition of existing businesses. See 'Risk Factors --
     Risks Relating to Purchase of New Classes of Assets.'
 
                                       36
<PAGE>
MARKET OVERVIEW
 
  General
 
     The need for the Company's funding services arises from the inflexible

nature of many deferred payment plans and the changing financial needs of many
claimants. Payment structures that originally met a claimant's needs may no
longer meet such claimant's needs as life circumstances change. The Company
provides liquidity to the claimant by purchasing, for a lump sum, the claimant's
right to receive future scheduled payments. Many claimants want to sell their
payment rights because they lack access to traditional sources of financing. The
claimant gains the advantage of realizing immediate liquidity on an otherwise
illiquid asset and the Company gains the advantage of acquiring a predictable
stream of payments from sources with strong credit profiles, such as insurance
companies and governmental or quasi-governmental entities.
 
  Structured Settlements
 
     Historically, personal injury lawsuits were settled with up-front, lump-sum
payments in exchange for releases from liability. However, favorable tax rulings
in the 1970s, which allowed future periodic payments to be received by personal
injury claimants on a tax-free basis, and the increasing size of jury awards in
the personal injury arena, propelled the recent growth of structured
settlements. Certain judgments, like settlements, are sometimes structured to
provide for periodic payments rather than payment of a single lump-sum. As
arrangements for payment of structured settlements and structured judgment
awards are substantially similar, the discussion of structured settlements in
this Prospectus applies both to structured settlements and judgments.
 
     In structuring litigation settlements, defendant insurers typically assign
their liability to an Assumption Party, which then enters into an annuity
contract with the Annuity Provider to fund the payments. The Assumption Party
receives a lump-sum payment from the defendant insurer in return for assuming
the liability for making settlement payments. The lump sum is sufficient to
purchase from another insurance company (the 'Annuity Provider') an annuity
contract to fund the periodic payments to the claimant.
 
     The Code provides for a tax-free receipt of the defendant insurer's payment
to the Assumption Party, provided that the assumption party simultaneously
purchases a 'qualified funding asset' defined as an annuity purchased from an
insurance company that matches the terms of the settlement. The tax treatment of
the lump sum payment to the Assumption Party would be in jeopardy if the annuity
payments were accelerated. As a result, it is not feasible to restructure the
schedule of settlement payments once the annuity contract is purchased by the
Assumption Party.
 
     The desire of claimants to access cash from their structured settlements
has created a secondary market. Specialty finance companies have developed
programs to purchase some or all of the claimant's right to payment under the
settlement agreement in exchange for paying to the claimant a lump sum. The
purchase transaction is structured as an assignment of payment rights under the
underlying settlement agreement because the claimant is not technically the
owner of the annuity contract and does not have the power to alter any terms
except the name of the beneficiary and the address for payment. See 'Risk
Factors -- Risks Associated with Structured Settlements -- Restrictions on
Assignability of Structured Settlement Receivables.'
 
  Other Deferred Payment Obligations
 

     A significant amount of litigation arises from personal injuries allegedly
caused by the operations of municipalities and government-owned enterprises such
as mass transit authorities. Typically these governmental operations
self-insure. Also, many private litigation settlements are funded by insurance
provided through mandatory underwriting pools that state governments established
to respond to failures in the private market for insurance of certain risks,
such as automobile insurance for high risk drivers. The settlement obligations
of self-insured government agencies are backed by the full faith and credit of
the state government. Obligations of the state mandated underwriting pools,
however, are not
 
                                       37
<PAGE>
typically backed by government guarantees. Nevertheless, such claims have proved
to have low credit risk.
 
     Certain state governments and municipalities responded to the growing
volume of personal injury litigation in which they were involved by seeking to
defer settlement payments. Examples of this trend are the deferral programs
established by the JUA, a state-sponsored insurance pool for high risk drivers
in New Jersey, and its successor the MTF. In the early 1990's, the JUA and MTF
experienced financial problems and initiated several deferral programs under
which claimants were forced to wait from 12 to 18 months to receive payment and
in exchange were given the opportunity to earn interest at the rate of six
percent per annum.
 
     These deferral programs offered a significant business opportunity to
firms, such as the Company, who were willing to purchase the deferred payments
from the claimant. Many claimants were willing to sell their payments at a
substantial discount to their maturity value to purchasers who, in turn,
obtained the right to be paid by a creditworthy entity. The number of JUA/MTF
claims originated by the Company has fallen dramatically in recent periods
because of the decreasing number of new claims and is not expected to increase
significantly in the near future. As a result, the Company has no plans to
purchase significant numbers of new JUA/MTF claims.
 
     Certain other deferred payment obligations have many of the same attractive
characteristics to an originator as structured settlements. Because the deferral
arrangement fixes a payment as due on a specific date in the future, these other
deferred payment obligations do not suffer from any risk of prepayment. Also,
because the government-affiliated obligors have relatively strong credit
profiles, credit risks are effectively minimized.
 
  Other Markets
 
     As an integral element of its strategy, the Company regularly evaluates
opportunities to purchase other classes of financial assets. As an outgrowth of
these efforts, in October 1997, the Company hired six individuals with
experience in brokering seller-financed mortgages. The Company plans to engage
in transactions in this market on a trial basis to determine its potential for
development on a larger scale using institutional financing. Seller-financed
mortgages are obligations negotiated directly between a single buyer and a
single seller of real estate. Because they are not originated by financial
institutions, seller-financed mortgages lack uniform underwriting standards. The

varied risk profile of each mortgage loan requires that entities seeking to
purchase seller-financed mortgages in the secondary market perform a detailed
review of information relevant to the credit risks associated with the
transactions. The Company believes that its experience underwriting transactions
involving unconventional assets and its ability to locate sellers of such assets
may give the Company competitive advantages in the secondary market for
seller-financed mortgages. The Company has not yet completed a detailed review
of the opportunities and risks of the market for seller-financed mortgages.
Although the Company believes this and other businesses may present attractive
business opportunities, each new business has significant risks and, as such,
the commitment of significant resources to any one or more of such businesses
may have a material adverse effect on the Company's business and results of
operations. See 'Risk Factors -- Risks Relating to Purchase of New Classes of
Assets' and 'Risk Factors -- Risks Relating to Entry into Market for
Seller-Financed Mortgages.'
 
     Certain large municipalities, such as the City of Philadelphia, and
governmental authorities, such as the Southeastern Pennsylvania Transportation
Authority ('SEPTA') self-insure against many risks, such as bodily injuries
caused by their activities. When these entities settle claims they often impose
deferred payments on claimants. The City of Philadelphia defers payment of its
claims for twelve months and SEPTA defers payments for nine months. Many state
lottery commissions impose structured payouts of awards funded by annuity
contracts. Similar opportunities exist for funding these payments as exists in
the market for structured settlements.
 
                                       38

<PAGE>
RECEIVABLES ORIGINATIONS
 
     Since its inception through September 1997, the Company has originated
approximately $303.0 million in maturity value of structured settlements and has
originated more than 9,400 JUA/MTF settlements with a maturity value of
approximately $131.7 million. The following table shows certain information
regarding the Company's deferred payment receivables originations on a quarterly
basis for the quarters shown:
 
                    QUARTERLY DEFERRED PAYMENT ORIGINATIONS
 
<TABLE>
<CAPTION>
                                NUMBER
THREE MONTHS ENDED             OF CLAIMS       CARRYING VALUE(1)      MATURITY VALUE(2)
-------------------------     -----------      -----------------      -----------------
<S>                           <C>              <C>                    <C>
December 31, 1992........             1          $      12,155          $      13,750
March 31, 1993...........            38                387,917                485,132
June 30, 1993............           118              1,077,552              1,386,470
September 30, 1993.......           154              1,567,395              1,990,099
December 31, 1993........           116              1,280,741              1,687,365
March 31, 1994...........           263              3,584,010              4,471,797
June 30, 1994............           359              6,097,913              7,511,585
September 30, 1994.......           784              9,396,090             11,447,672
December 31, 1994........         1,252             12,776,731             15,492,868
March 31, 1995...........         1,377             15,292,890             18,241,866
June 30, 1995............         1,463             17,081,460             20,273,265
September 30, 1995.......         1,189             15,320,795             18,850,975
December 31, 1995........           726             10,387,094             19,165,817
March 31, 1996...........           680             13,273,953             22,590,421
June 30, 1996............           819             16,759,435             33,078,039
September 30, 1996.......         1,074             21,547,767             46,608,781
December 31, 1996........         1,036             21,456,514             43,357,622
March 31, 1997...........         1,225             25,937,301             52,987,903
June 30, 1997............         1,348             25,130,082             55,191,722
September 30, 1997.......         1,676             29,355,622             62,444,070
                              -----------      -----------------      -----------------
                                 15,698          $ 247,723,415          $ 437,277,218
                              -----------      -----------------      -----------------
                              -----------      -----------------      -----------------
</TABLE>
------------------
(1) The carrying value equals the purchase price paid by the Company to
    originate the receivables.
 
(2) The maturity value equals the sum of all future payments to be received
    under a deferred payment obligation.
 
     MFC's level of origination of JUA/MTF settlements in recent quarters has
fallen in tandem with the decreasing supply of deferred claims. In addition, the
Company does not expect the JUA and MTF to announce any new deferral programs in
the near future. Since inception, the Company has also purchased, in the

aggregate, claims against the City of Philadelphia and Southeastern Pennsylvania
Transportation Authority with maturity values of approximately $929,000 and $1.7
million, respectively. The Company does not expect that originations of these
claims will have a material impact on the Company's financial condition or
results of operations in 1997.
 
     The Company has originated 11.6% and 11.2% of its portfolio of structured
settlement receivables from residents of California and New York, respectively,
and only three other states represent the source of in excess of five percent of
its portfolio of structured settlement receivables. The deferred payment
obligations of the JUA/MTF purchased by the Company were all originated in the
State of New Jersey.
 
                                       39
<PAGE>
     The following table shows certain information with regard to the
distribution of structured settlement originations through September 30, 1997
based on A.M. Best Ratings of Annuity Providers.
 
               DISTRIBUTION OF ORIGINATIONS BY A.M. BEST RATINGS
 
                                         PERCENT
                                         OF TOTAL
                                       ORIGINATION
                            RATING        PRICE
                            -------    ------------
                            A++....         24.7%
                            A+.....         45.4%
                            A......         18.1%
                            A-.....          5.2%
                            B++....          0.0%
                            B+.....          0.2%
                            F......          3.1%
                            U......          3.3%
                                       ------------
                                           100.0%
 
     Only two Annuity Providers represent in excess of 10% of the Company
originations based on carrying value, one of which is rated 'A++' and the other
is rated 'A+.'
 
MARKETING AND CUSTOMER SERVICE
 
     The Company markets its structured settlement business through a variety of
channels. Newspaper and television advertising is used to publicize the
Company's services to the broad population of claimants who may require the
Company's services. The Company has developed a comprehensive national
television advertising campaign that the Company believes helps to differentiate
it from its competitors. From March 1996 through September 1997, the Company
broadcast approximately 88,000 thirty-second television commercials nationwide.
 
     The Company utilizes a proprietary call-tracking system that allows it to
trace the origin of each inbound call by geographic market, estimate the
approximate marketing costs incurred to generate the call and track the progress

of each file arising from the call to eventual funding or termination. The
Company's compensation policies for originations personnel rely heavily on
performance bonuses.
 
     The Company also markets directly to referral sources such as attorneys and
bankruptcy and estate trustees. The Company maintains contact with these sources
by a mix of outbound telemarketing, company sponsored newsletters and
advertising in trade and professional magazines. As an example of its successful
marketing to attorneys, the Company is the only organization to receive the
endorsement of ATLA-NJ in connection with its settlement funding programs. The
Company also seeks to increase awareness of the Company's funding products among
attorneys and other professionals and their clients by publishing and
distributing a newsletter named The National Funding Chronicle.
 
     Company personnel have also sought to increase the profile of the Company
among targeted groups by publishing articles in legal and other specialty
publications and making presentations to meetings of local bar associations and
trial lawyers' groups and other professional and business gatherings.
 
UNDERWRITING
 
  The Origination Process
 
     The Company originates substantially all of its receivables using its own
trained personnel as opposed to outside brokers. The Company has two separate
divisions that are involved in the funding process, the Originations Group
located in Fort Lee, New Jersey and the Underwriting Operations
 
                                       40
<PAGE>
Group located at the Company's corporate headquarters in Philadelphia,
Pennsylvania. This physical separation of the groups and their clearly
delineated responsibilities provide the Company with an effective checks and
balances system. The 175-member Originations Group establishes the initial
contact with the claimant but has no power to execute a transaction. Meanwhile,
the 17-member Underwriting Operations Group processes and executes transactions
but does not initiate business.
 
     The origination process starts when a claimant or a broker calls the
Company and ends with the execution of legal documentation and the disbursement
of funds. The Company's policies prohibit personnel from 'cold calling'
prospective claimants in connection with structured settlement originations. The
Company's first contact with a prospective claimant is always initiated by the
claimant or a referral source. The Originations Group includes an in-house
advertising agency as well as a 200-seat telemarketing call center with both
inbound and outbound capacity equipped with predictive dialing technology.
 
     The Company's use of its own personnel (as opposed to purchasing claims
through brokers) offers significant operational advantages. Minimizing reliance
on the broker community permits the Company to maintain more control of its
origination process. Broker-generated originations have fallen to less than five
percent of monthly production largely due to the Company's successful direct
marketing efforts. The Company relies on its highly trained sales force to
handle incoming claimant inquiries, provide customer service and thereby

increase the acquisition of high-quality receivables.
 
     The Originations Group is primarily responsible for gathering the
information from the claimant that is necessary for the Company to determine
whether the claimant has an asset that qualifies for funding and whether the
claimant has a real need for the Company's funding products. A claimant who
cannot supply appropriate evidence of the existence of an annuity contract that
names the claimant as the beneficiary of the policy, as well as appropriate
evidence of the settlement agreement giving rise to the receivable, or whose
financial profile does not make the claimant a logical candidate for funding is
rejected by trained staff member without the need of further review.
 
     Once a claimant is qualified, the account representative sends the file to
a staff member responsible for pricing, who analyzes the funding requirements of
the claimant, the structure of payments due the claimant and the Company's
return objective and then presents alternative funding choices to the claimant.
To meet the claimant's funding requirements, the Company may propose buying only
certain scheduled payments or may propose buying varying portions of each
scheduled payment. These alternatives are presented to the claimant, who then
makes a decision as to which structure best meets his or her requirements. The
Company establishes a direct relationship with its customers which often lead to
'continuations.' Continuations occur when claimants sell the Company a portion
of their payments due under the structured settlement and subsequently sell
another portion of their payments at a later time. Continuations give the
Company the opportunity to develop a history with a claimant prior to making
additional purchases and, therefore, potentially minimize risk of loss.
 
  Contract Review and Processing
 
     Once the claimant chooses a funding option, the file is submitted to the
Underwriting Operations Group for detailed review. The Company's comprehensive
underwriting procedures are designed to minimize the risk of claimant fraud and
the resulting loss with respect to its receivables. The Company does not need to
employ traditional underwriting procedures designed to determine the credit
quality of the obligor since a majority of the structured settlement receivables
are funded by highly rated Annuity Providers. The most prominent fraud-related
risks inherent in the purchase, financing, or securitization of structured
settlements are (i) diversion of payments to addresses other than those of the
bank accounts controlled by the Company, (ii) competing creditor interests and
(iii) duplicative financing of the receivable in question. The Company's
underwriting objective is to obtain an unencumbered interest in the right to
receive payments from the structured settlements.
 
     The Company has established written underwriting standards to minimize the
frequency and severity of these types of fraud risks. The review process is
divided into separate stages, with each stage of review being the responsibility
of different staff members. Staff members at each stage of
 
                                       41
<PAGE>
review have independent authority to reject an application. In the case of
structured settlements, the Company: (i) requires that the claimant retain an
attorney in good standing with the applicable state bar association; (ii)
conducts UCC, lien, and judgment searches against the claimant with whom the

Company is considering a transaction; (iii) accesses a database located at a
secure intranet web site that was created by the Company and several of its
competitors to identify quickly a claimant who is trying to sell his right to
receive payments more than once; (iv) obtains an 'estoppel' letter from
claimant's attorney confirming that the claimant agreed to assign payment rights
under the structured settlement knowingly and voluntarily after seeking the
advice of an attorney; (v) conducts taped exit interviews with claimants prior
to funding; (vi) completes review by in-house attorneys to ensure compliance
with eligibility criteria; and (vii) obtains confirmation from EDS that
settlement purchase agreements and other related documents are properly
executed.
 
     In 1995, the Company entered into an agreement with EDS, which in June 1997
was amended to increase its term to twenty years, pursuant to which the Company
delivers to EDS files with respect to each receivable the Company originates. As
a recipient of each file, EDS can track the Company's portfolio and
independently verify that the underwriting process for each receivable conforms
to the Company's standards. EDS also acts as 'back-up' servicer with respect to
both the Company's owned and serviced receivables.
 
COLLECTIONS
 
     The Company's five-member Collections Department is responsible for
monitoring any receivable for which a payment has not been received as expected,
and to take actions necessary to ensure collection. These instances include
circumstances when: (i) a payment is lost; (ii) a payment is not sent to the
proper address by the Annuity Provider or other obligor; (iii) a claimant has
diverted payment or otherwise compromised the Company's interest in a
receivable; (iv) the claimant seeks protection under the Bankruptcy Code; or (v)
the claimant is deceased.
 
     In the case of structured settlements, once a receivable has been referred
to the Collections Department, the Company investigates the cause of non-payment
and attempts to collect directly from the responsible party. The Company views
its first-level collection efforts as a 'rehabilitation' process. Administrative
delinquencies described in subparagraphs (i) and (ii) above are generally
quickly resolved by contacting the Annuity Provider responsible for the payment.
In these cases, the Company first works with the Annuity Provider to freeze
additional payments until it can be determined who is entitled to be paid. In
the event of actual diversion by the claimant, the Company's internal legal
staff initiates legal proceedings and seeks to obtain a judgment against the
claimant. Upon obtaining a judgment against the claimant, the Company serves
notice of such judgment on the Annuity Provider, and the Company subsequently
seeks to garnish the annuity payments and redirect them to the Company. If the
Annuity Provider is located in a jurisdiction different than the one in which
the judgment is obtained, the Company 'domesticates' the judgment in the
appropriate jurisdiction and garnishment process is then served on the Annuity
Provider. If the Company's efforts to garnish the annuity payments are
contested, the matter is referred to outside counsel. See 'Risk Factors --
Relationships with Annuity Providers.'
 
                                       42

<PAGE>
     The following table shows certain information with regard to the
delinquency history regarding the Company's receivables:
 
                          DEFAULT DELINQUENCY HISTORY
 
<TABLE>
<CAPTION>
                                                         DECEMBER 31,                  JUNE 30,
                                                  --------------------------      ------------------
                                                  1994      1995       1996        1996        1997
                                                  ----      ----      ------      ------      ------
                                                                (DOLLARS IN THOUSANDS)
<S>                                               <C>       <C>       <C>         <C>         <C>
Structured Settlements:
  Defaulted receivables......................       --         2          34           6          71
  Defaulted payments.........................       --         4         146          33         321
  Carrying value of defaulted receivables....       --      $ 40      $1,313      $  151      $3,280
  Carrying value of defaulted payments.......       --      $  7      $  200      $   39      $  334
  Defaulted receivables as a percentage of
     portfolio...............................       --       0.8%        2.2%        0.7%        3.1%
 
Other Deferred Payment Obligations:
  Delinquent receivables.....................       --        13          20          16          10
  Carrying value of delinquent receivables...       --      $133      $  197      $  127      $   63
  Delinquent receivables as a percentage of
     portfolio...............................       --       0.3%        0.7%        0.3%        0.4%
</TABLE>
 
     The Company's other deferred payment obligations have had no charge-offs
since inception. The Company recorded a net charge-off of $610,000 of structured
settlement receivables for the six months ended June 30, 1997, 0.6% of its
average portfolio for such period.
 
SECURITIZATIONS
 
     In a securitization transaction, the Company sells a pool of structured
settlements to a securitization trust or other special purpose vehicle, which in
turn issues interests that are sold to investors. Payments on the securitized
receivables, less a servicing fee and certain related expenses, are made by the
special purpose vehicle to investors. The Company recognizes revenue in an
amount equal to the Gain on Sale when the receivables are sold to the special
purpose vehicle. The Company also retains a subordinated interest in the pool of
securitized receivables which is recorded as a Retained Interest on the
Company's balance sheet.
 
     The following table presents certain information with respect to the
Company's securitizations:

<TABLE>
<CAPTION>
                                                      WEIGHTED AVERAGE    CREDIT
                                       OFFERING         PASS-THROUGH      RATING          OVER-
SECURITIZATION    DATE COMPLETED         SIZE             RATE (1)         (2)      COLLATERALIZATION
--------------  ------------------   -------------    ----------------    ------    -----------------
<S>             <C>                  <C>              <C>                 <C>       <C>
1997-1........  June 13, 1997        $70.8 million           7.8%           A2/A            16%
 
1997-A........  September 30, 1997   $31.0 million           7.2%           A2/A            16%
                October 1, 1997      $41.0 million           7.2%           A2/A            16%
</TABLE>
------------------
(1) Senior Security only.
 
(2) Rating from Moody's and Duff & Phelps, respectively.
 
     The Company acts as the master servicer of the securitized receivables for
which it receives a fee equal to one percent of the average discounted balance
of the securitized receivables on each monthly distribution date. See 'Risk
Factors,' 'Management's Discussion and Analysis of Financial Condition and
Results of Operations' and '--Servicing Operations.'
 
     As of October 3, 1997, the majority of the approximately $30.0 million in
structured settlement receivables on the Company's balance sheet did not meet
the eligibility criteria of the recent securitizations. These receivables
include originations from Notice States, from Illinois and payment
 
                                       43
<PAGE>
rights arising from workers' compensation awards. The Company does not
anticipate securitizing these receivables and presently intends to hold them to
maturity.
 
SERVICING OPERATIONS
 
     The Company has the administrative capacity to manage all aspects of the
servicing of its owned and serviced receivables. The Company maintains a
detailed computerized data base which lists payment due dates with respect to
all owned and serviced receivables. Any payment which is not received on time by
the Company is promptly investigated by the Company's Underwriting Operations
Department. To the extent such non-payment or delay in payment is unresolved or
is suspected of being the result of claimant fraud, such receivable is turned
over to the Company's Collections Department for further action.
 
     In addition, the Company acts as the master servicer with respect to its
securitized receivables. As master servicer, the Company is obligated to post
payments, produce reports, and allocate payments for the benefit of certificate
holders. In consideration of its services, the Company collects a servicing fee
equal to one percent of the aggregate receivables balance at the end of each
month. The Company's servicing capacity is supported by EDS, which maintains
detailed computer records pertaining to each of the Company's owned and managed
receivables in its role as 'back-up' servicer.
 

     In connection with its monitoring responsibilities, the standard operating
procedures of the Underwriting Operations Department require placing a telephone
call to an applicable Annuity Provider before an irregularly-scheduled payment
is due in order to make sure that the address for the payment is a lockbox
controlled by the Company. As monthly payments tend to be smaller than non-
monthly payments, no such calls are made to confirm payment instructions with
respect to such receivables. Instead, the Company relies on its ability to
closely track scheduled payments and to initiate rapid enforcement action in the
case of any non-payment due to claimant fraud.
 
COMPETITION
 
     The secondary market for deferred payment obligations is currently highly
fragmented. In the market for structured settlements, the Company currently
experiences competition from two main groups: specialty finance companies and
independent brokers. The Company also experiences competition from individual
brokers and networks of brokers through whom some of the Company's direct
funding competitors originate much of their business. Because the Company
originates substantially all of its receivables by its retail originations
infrastructure, independent brokers are more likely to broker claims they
identify to the Company's funding-company competitors than they are to refer
them to the Company. In the future, the Company could face competition from a
wide variety of financial services providers, including commercial banks, credit
unions, savings and loans and other consumer and commercial lending
institutions. Many of these existing and potential competitors in the financial
services business are substantially larger and have more capital and other
resources than the Company. The Company believes that it competes for business
based upon the quality of its services, convenience and turnaround time in the
funding process, availability of funding options and price. See 'Risk Factors --
Competition.'
 
INFORMATION TECHNOLOGY
 
     As part of its ongoing effort to increase efficiency, the Company has
recently installed a call center system combining voice-data integration,
predictive dialing and call and contact management software. The system provides
management with the power to change or update capabilities without the need for
costly customized software code due to its open-architecture design and
easy-to-use application-building software. In addition, the Company purchased a
new general ledger system and upgraded substantially all of its computer
hardware within the last year. The Company intends to continue to look for ways
to improve efficiencies through automation and improved information technology.
The Company believes that its information systems have all capabilities that are
required
 
                                       44
<PAGE>
to handle the change of the century in a standard and accurate manner, including
any data management problems related to the year 2000.
 
PROPRIETARY RIGHTS AND LICENCES
 
     The Company has applied for federal trademark protection for its company
name and logo, the name of its newsletter, The National Funding Chronicle, and

the slogan 'An American Financial Rescue.' Although the Company has not received
any response from the Patent and Trademark Office, and does not expect any
adverse office action on the application, there is no assurance that such
trademarks will be issued in a timely fashion, if at all.
 
GOVERNMENT REGULATION AND LEGISLATION
 
     Although in most states the Company's business is currently not subject to
significant regulation, the Company monitors the progress of regulation and
legislation in each state in which it acquires deferred payment obligations.
Because the business of originating rights to receive payment from structured
settlements has only developed recently, the number of new regulatory
initiatives may increase in the future. For example, the Illinois legislature
recently passed a statute that takes effect on January 1, 1998 that will require
that any assignment of a structured settlement be approved by a court having
jurisdiction over the underlying claim and will prohibit an Annuity Provider
from mailing payments to any party other than the claimant without such court
approval. The Illinois law does not currently specify the standards on which
courts would grant approvals of assignments or the process by which such
approval should be sought. Because of the uncertainty associated with the
Illinois law, the Company did not securitize any receivables purchased from
claimants in Illinois in its most recent securitization.
 
     The Company believes that the pressure on governments to regulate purchases
of structured settlements and other deferred payment obligations will grow as
the market continues to attract new entrants. The Company has led in the
formation of the National Association of Settlement Purchasers ('NASP'), a trade
group, through which it will work to influence the shape of new laws and
regulations to minimize the adverse impact of such legislation. Although the
Company believes that NASP efforts to promote a favorable regulatory environment
will be successful, the ultimate impact of future laws and regulations cannot be
determined. Accordingly, there is no assurance that new regulatory and
legislative initiatives will not have a material adverse effect upon the
Company's financial condition and results of operation. See 'Risk Factors --
Regulation and Legislation.'
 
LEGAL PROCEEDINGS
 
     The Company initiates legal proceedings in the ordinary course of its
business to collect delinquent payments due to the Company under the terms of
structured settlement purchase agreements entered into with claimants. The goal
of these actions is to obtain a judgment against the claimant and enforce the
judgment by seeking garnishment of payments made by Annuity Providers under the
annuity contracts. See 'Business -- Collections.' None of these proceedings,
considered separately, is material to the Company's business.
 
     Some Annuity Providers, however, have contested the Company's garnishment
actions, by raising a number of claims, allegations or defenses in their
responsive pleadings. The responses typically raise one or more of the following
issues: (i) contractual provisions in the settlement agreements or annuity
contracts prohibit assignment, encumbrance or garnishment of the scheduled
payments; (ii) the settlement purchase agreement between the Company and the
claimant is unenforceable because of fraud, collusion or misrepresentation by
the claimant and the Company; (iii) scheduled payments are exempt from

garnishment under various states' laws regarding insurance contracts and annuity
contracts; and (iv) certain judgments entered against garnishees by the court
clerk or prothonotary should be stricken because such clerk or prothonotary
exceeded its statutory authority. The Company has vigorously contested, and
expects to continue to contest, these claims, allegations and defenses when they
are raised by Annuity Providers. Although to date none of the defenses to the
Company's
 
                                       45
<PAGE>
garnishment actions brought by Annuity Providers have been successful, to the
extent that a court would accept the validity of such defenses, the collection
efforts of the Company could be materially adversely affected. The Company was
recently served with a complaint by an Annuity Provider that sought a
declaration that such Annuity Provider is not obligated to make scheduled
payments directly to the Company. Although the amount in issue in this
litigation is not material to the Company's business, if the Annuity Provider
were to prevail, other courts could rely on the conclusions of such court and
make it more difficult for the Company to collect payments under structured
settlement receivables. See 'Risk Factors -- Relationships with Annuity
Providers.'
 
     The Company is also party to two actions initiated by claimants, neither of
which is material to the Company.
 
EMPLOYEES
 
     As of October 1, 1997, the Company had approximately 200 employees. None of
the Company's employees is represented by a labor union. The Company believes
that its relations with its employees is good.
 
PROPERTIES
 
     The Company's headquarters and underwriting operations are located in
16,043 square feet of leased office space in Philadelphia, Pennsylvania, its
acquisitions and marketing operations are conducted from a 21,520-square foot
leased facility in Fort Lee, New Jersey and SSC leases shared office space in
Wilmington, Delaware. The leases for the Philadelphia and New Jersey facilities
expire in January 2003 and March 2002, respectively, with the Company having
options with respect to additional space in both locations. With this additional
space, the Company believes its existing facilities are adequate for its current
needs, but that additional space will be required by December 1998.
 
                                       46

<PAGE>
                                   MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
     The executive officers and directors of the Company are as follows:
 
NAME                           AGE  POSITION
-----------------------------  ---  --------------------------------------------

Gary Veloric.................  37   Chairman of the Board of Directors
James D. Delaney.............  46   President, Chief Executive Officer and
                                      Director
Michael B. Goodman...........  35   Executive Vice President, Chief Operating
                                      Officer and Director
Andrew S. Hillman............  45   Senior Vice President, General Counsel and
                                      Secretary
James J. O'Malley............  46   Vice President and Chief Financial Officer
Edward S. Stone..............  35   Director
Gerald E. Bisbee, Jr.........  55   Director
Philip J. Kendall............  68   Director
Anthony C. Salvo.............  54   Director
 
     GARY VELORIC serves as the Chairman of the Board of Directors of the
Company. Since founding JGW in 1991, Mr. Veloric has served as a director and in
various capacities as an officer of each of JGW and the General Partners, most
recently as Chairman and, until August 1997, as Chief Financial Officer of each
entity. From 1983 until May 1992, Mr. Veloric served as Senior Vice President of
Development for Geriatric and Medical Companies, Inc., a leading provider of
long-term care based in Philadelphia, Pennsylvania ('GeriMed'). Mr. Veloric also
served as a director of GeriMed.
 
     JAMES D. DELANEY serves as the President and Chief Executive Officer and a
director of the Company. Since co-founding JGW with Mr. Veloric in 1991, Mr.
Delaney has served as a director and in various capacities as an officer of each
of JGW and the General Partners, most recently as President and Chief Executive
Officer of each entity.
 
     MICHAEL B. GOODMAN serves as the Executive Vice President and Chief
Operating Officer and a director of the Company. From March 1994 until October
1997, Mr. Goodman served as Vice President of Marketing of the Company, at which
time Mr. Goodman helped develop the Company's marketing strategy and
originations operations. From 1991 until February 1994, Mr. Goodman was an
independent investor and business consultant.
 
     ANDREW S. HILLMAN serves as the Company's Senior Vice President, General
Counsel and Secretary since joining the Company in October 1997. From September
1994 until he joined the Company, Mr. Hillman was a shareholder at Silverman
Coopersmith Hillman & Frimmer, a Professional Corporation, a law firm based in
Philadelphia, PA, where he specialized in banking and corporate law and
represented the Company in a number of transactions and in certain corporate and
partnership matters. From 1986 until September 1994, Mr. Hillman was a partner
at the law firm of Cohen Shapiro Polisher Shiekman and Cohen in Philadelphia,
Pennsylvania.

 
     JAMES J. O'MALLEY serves as the Company's Vice President and Chief
Financial Officer. From August 1997, Mr. O'Malley served as Chief Financial
Officer of JGW and the General Partners. From 1989 until June 1997, Mr. O'Malley
served in various financial capacities with GeriMed and served as its Vice
President and Chief Financial Officer from June 1992 until it was acquired by
Genesis Health Ventures, Inc. in October 1996.
 
     EDWARD S. STONE serves as a director of the Company. From March 1997 until
October 1997, Mr. Stone served as outside General Counsel to the Company. Mr.
Stone began offering legal and other consulting services to the Company in May
1995 and billed the Company for such services through his legal practice, the
Law Offices of Edward S. Stone, and through Stone International LLC, a
consulting
 
                                       47
<PAGE>
firm of which Mr. Stone is the principal. Until May 1995, Mr. Stone was a
principal of Settlers' Funding LLC ('Settlers' Funding'), a company that
purchased settlement obligations of the JUA and MTF in competition with the
Company, at which time Mr. Stone ceased his involvement in management of that
firm's affairs. Settlers' Funding ceased business operations in June 1995.
 
     GERALD E. BISBEE, JR. has consented to become a member of the Company's
Board of Directors upon the completion of the Offering. Since January 1990, Mr.
Bisbee has been the Chairman and Chief Executive Officer of APACHE Medical
Systems, Inc., a publicly traded firm specializing in healthcare decision
support services. Mr. Bisbee also is a director of the Cerner Corporation, a
publicly traded software company located in Kansas City, Missouri, and is a
director of Yamaichi, a registered investment company.
 
     PHILIP J. KENDALL has consented to become a member of the Company's Board
of Directors upon the completion of the Offering. Since April 1991, Mr. Kendall
has been Chairman of the Board of Directors of Global Financial Press, a leading
financial printing and document imaging firm ('Global'). Global is providing
financial printing services to the Company in connection with the Offering.
 
     ANTHONY C. SALVO has consented to become a member of the Company's Board of
Directors upon the completion of the Offering. In May 1995, Mr. Salvo co-founded
and became a principal of Rai Capital LLC, a private investment firm located in
New York, NY. From 1988 until December 1994, he was a Vice President with Dillon
Read & Co., Inc., an investment bank that was based in New York, NY.
 
CLASSIFIED BOARD; COMMITTEES
 
     The Company's Board of Directors is divided into three classes. Each class
holds office until the third annual meeting for the election of directors
following the election of such class, except that the initial terms of the Class
I, Class II and Class III directors expire in 1998, 1999 and 2000, respectively.
Messrs. Goodman and Stone are Class I directors, Mr. Veloric is a Class II
director and Mr. Delaney is a Class III director. It is expected that upon the
completion of the Offering, Mr. Bisbee will be a Class I director, Mr. Kendall
will be a Class II director and Mr. Salvo will be a Class III director.
 

     The Board of Directors intends to establish an Executive Committee, a
Compensation Committee, an Audit Committee and a Corporate Compliance Committee.
The Executive Committee is authorized to exercised the power of the Board of
Directors between meetings. However, the Executive Committee may not: (i) amend
the Certificate of Incorporation or the By-laws of the Company, (ii) adopt an
agreement of merger or consolidation, (iii) recommend to the stockholders the
sale, lease, or exchange of all or substantially all of the Company's property
and assets, (iv) recommend to the stockholders a dissolution of the Company or
revoke a dissolution, (v) elect a director, or (vi) declare a dividend or
authorize the issuance of stock. The Compensation Committee will determine
salaries and bonuses and other compensation matters for officers of the Company,
determine employee health and benefit plans, and administer the Company's 1997
Stock Incentive Plan and any similar plans created in the future. The Audit
Committee will recommend the appointment of the Company's independent public
accountants and will review the scope and results of audits, internal accounting
controls and tax and other accounting related matters. The Corporate Compliance
Committee will ensure that the Company complies with all applicable laws and
regulations.
 
DIRECTOR COMPENSATION
 
     Each of the Company's non-employee directors will be entitled to receive an
annual fee of $10,000 for service as a director and a fee of $1,000 for each
meeting of the Board of Directors or any committee thereof such director
attends. In addition, each director will be entitled to reimbursement of travel
and other expenses incurred in connection with their service as directors. Each
director, other than the Principals, will also receive options to purchase
10,000 shares of Common Stock concurrently with the completion of the Offering
exercisable at the initial public offering price that will vest on the six-month
anniversary of the Offering.
 
                                       48

<PAGE>
EXECUTIVE COMPENSATION
 
     The following table sets forth certain information with respect to
compensation paid or accrued by the Company for fiscal 1996 to the Company's
Chief Executive Officer and to the four most highly compensated executive
officers of the Company whose salary and bonus for fiscal 1996 exceeded $100,000
for all services rendered in all capacities to the Company (the 'Named Executive
Officers'):
 
                         SUMMARY COMPENSATION TABLE(1)
 
<TABLE>
<CAPTION>
                                                           ANNUAL COMPENSATION
                                                           -------------------       ALL OTHER
              NAME AND PRINCIPAL POSITION                   SALARY      BONUS     COMPENSATION(2)
--------------------------------------------------------   --------    -------    ---------------
<S>                                                        <C>         <C>        <C>
James D. Delaney .......................................   $185,256      -0-         $  24,235
  President and Chief Executive Officer
Gary Veloric ...........................................   $182,814      -0-         $  24,235
  Chairman of the Board of Directors
Michael B. Goodman .....................................   $186,288      -0-         $ 211,735
  Executive Vice President and Chief Operating Officer
</TABLE>
------------------
(1) The compensation reported in the above table was not paid by the Company but
    by JGW and the Partnerships. For a description of the relationships between
    the Partnerships and JGW prior to the formation of the Company, see 'The
    Reorganization and Change in Tax Status.'
 
(2) Consists of commissions of $24,235 paid to each of the Principals as
    compensation for services provided in connection with organizing the
    business of the Partnerships and approximately $189,500 paid to Mr. Goodman
    by MFC as a consulting fee. Amounts do not include $223,000 distributed to
    each of Messrs. Delaney and Veloric by MFC and $42,000 distributed to each
    of the Principals by SSC in 1996. For additional information regarding
    payments made by the Partnerships to the Named Executive Officers and
    others, see 'Distributions and Dividend Policy' and 'The Reorganization and
    Change in Tax Status.'
 
EMPLOYMENT AGREEMENTS
 
     In October 1997, the Company entered into employment agreements with the
Principals, each for an initial term of three years. Under the terms of the
employment agreements, the Company will pay each of the Principals a base salary
of $195,000 per year, subject to annual cost of living adjustments and periodic
increases at the discretion of the Compensation Committee of the Board of
Directors. Each year, the executives are entitled to receive a formula bonus in
an amount ranging from 50% to 200% of the executives' base salary. The
percentage used to calculate the amount of the bonus increases on a
straight-line basis with the level of 'return on average equity' (as defined in
the appropriate employment agreement) achieved by the Company for the previous

year. Under the formula, the executives earn no bonus if ROAE is less than 15%
and achieve a maximum bonus of 200% of base salary if the ROAE equals or exceeds
35%. Each of the Principals shall be entitled to participate generally in the
Company's employee benefit plans, including the 1997 Stock Incentive Plan. Under
the terms of the employment agreements each of the Principals will be awarded
options to purchase 50,000 shares of Common Stock upon the completion of the
Offering at the initial public offering price and will vest in four equal annual
installments beginning on the first anniversary of the completion of the
Offering.
 
     Also in October 1997, the Company entered into an employment agreement with
Mr. Hillman for an initial term of one year. Under the terms of this employment
agreement, the Company will pay Mr. Hillman a base salary of $170,000 per year,
subject to annual cost of living adjustments and periodic increases at the
discretion of the Compensation Committee of the Board of Directors. Mr. Hillman
will also be entitled to a formula bonus and to participate generally in the
Company's employee benefit plans on the same terms as the Principals. Mr.
Hillman's employment agreement also provides for an award under the 1997 Stock
Incentive Plan of options to purchase 50,000 shares of Common Stock upon the
completion of the Offering and will vest on the same schedule as the options
 
                                       49
<PAGE>
to be granted to the Principals, except that upon Mr. Hillman's resignation for
'good reason,' the options shall vest immediately.
 
     According to each employment agreement, if the executive is terminated 'for
cause,' which definition generally includes termination by the Company due to
the executive's willful failure to perform his duties under the employment
agreement, the executive's personal dishonesty, or the executive's breach of his
fiduciary duties or any other provisions of his respective employment agreement,
then the Company is obligated to pay the executive so terminated only his base
salary up to his termination 'for cause.' If any of the Principals are
terminated without cause, or the executive leaves for 'good reason,' the Company
is obligated to pay such executive his base salary, bonus and benefits for the
remaining term of his employment agreement or, in the case of Mr. Hillman, the
greater of the remaining term of his Agreement or six months from the date of
termination. As used in the employment agreements, 'good reason' includes the
executive officer's resignation due to a breach by the Company of his employment
agreement or a change of control, the Company must pay such executive officer
his salary, bonus and benefits for the greater of the remaining term of the
employment agreement and one year after such termination.
 
1997 STOCK INCENTIVE PLAN
 
     Under the Company's 1997 Stock Incentive Plan (the 'Plan'), a variety of
awards, including stock options, stock appreciation rights and restricted and
unrestricted stock grants may be made to the Company's employees, officers,
consultants and advisors who are expected to contribute to the Company's future
growth and success. 1,500,000 shares of Common Stock are reserved for issuance
under the Plan and the maximum number of shares for which options, SARs or other
rights may be granted to any single individual during one year is 500,000. The
Compensation Committee will administer the Plan and determine the price and
other terms upon which awards shall be made. Stock options may be granted either

in the form of incentive stock options or non-statutory stock options. The
option exercise price of incentive stock options may not be less than the fair
market value of the Common Stock on the date of the grant. While the Company
currently anticipates that most grants under this Plan will consist of stock
options, the Company may grant stock appreciation rights, which represent rights
to receive any excess in value of shares of Common Stock over the exercise
price; restricted stock awards, which entitle recipients to acquire shares of
Common Stock, subject to the right of the Company to repurchase all or a part of
such shares at their purchase price in the event that the conditions specified
in the award are not satisfied; or unrestricted stock awards, which represent
grants of shares to participants free of any restrictions under the plan.
Options or other awards that are granted under the Plan but expire unexercised
are available for future grants. It is expected that prior to the completion of
the Offering options to purchase 650,000 shares of Common Stock will be granted
under the Plan to the employees, officers and directors with an exercise price
equal to the initial public offering price per share. No options to purchase
Common Stock have been granted to date.
 
                                       50
<PAGE>
401(K) SAVINGS PLAN
 
     In January 1997, the Company established a 401(k) Savings Plan (the '401(k)
Plan'), which is intended to comply with Sections 401(a) and 401(k) of the Code,
and the applicable provisions of the Employee Retirement Income Security Act of
1974, as amended. Amounts contributed to the 401(k) Plan are held under a trust
intended to be exempt from income tax pursuant to Section 501(a) of the Code.
All employees of the Company that have completed at least one year of service
and who are at least 21 years old are eligible to participate in the 401(k)
Plan. Participating employees are entitled to make pre-tax contributions to
their accounts, subject to certain maximum annual limits imposed by law ($9,500
in 1996), and certain other limitations.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     Prior to the Offering, the Company has not had a compensation committee or
any other committee of the Board of Directors performing similar functions.
Prior to the Offering, decisions concerning executive compensation were made by
the Principals, all of whom were, and continue to be, executive officers of the
J.G. Wentworth Affiliated Companies and participated in deliberations regarding
executive officer compensation. The Board of Directors of the Company has
established a Compensation Committee. See '-- Classified Board; Committees.'
 
     None of the executive officers of the Company currently serves on the
compensation committee of another entity or any other committee of the board of
directors of another entity performing similar functions. For other related
party transactions, see 'Certain Relationships and Related Party Transactions.'
 
                                       51

<PAGE>
                       PRINCIPAL AND SELLING STOCKHOLDERS
 
     The following table sets forth certain information regarding the ownership
of the Common Stock expected as of the completion of the Reorganization and as
adjusted to reflect the Offering by: (i) each of the Company's Named Executive
Officers and directors; (ii) all of the Company's executive officers and
directors as a group; (iii) each person known to the Company to own more than
five percent of the outstanding shares of Common Stock and (iv) each Selling
Stockholder. The information set forth in the table assumes that the initial
public offering price of the Common Stock will be $15.00 per share (the
mid-point of the price range set forth on the cover page of this Prospectus) and
that an aggregate 12,466,367 shares will be issued to Existing Stockholders in
the Reorganization. The calculation of number of shares to be issued to the
Existing Stockholders is governed by the provisions of the Contribution
Agreement. See 'The Reorganization and Change in Tax Status.'
 
<TABLE>
<CAPTION>
                                    SHARES
                                 BENEFICIALLY                             SHARES BENEFICIALLY
                              OWNED PRIOR TO THE                            OWNED AFTER THE
                                   OFFERING         NO. OF                      OFFERING
                              ------------------    SHARES     ------------------------------------------
NAME OF BENEFICIAL OWNER(1)    NUMBER     PERCENT   OFFERED          NUMBER                 PERCENT
---------------------------   ---------   ------    -------    -------------------    -------------------
<S>                           <C>         <C>       <C>        <C>                    <C>
James D. Delaney...........   2,687,313    21.6%    311,165              2,376,148            14.4%
 
Gary Veloric...............   2,687,313    21.6%    311,165              2,376,148            14.4%
 
Michael B. Goodman.........   2,662,223    21.4%    286,075              2,376,148            14.4%
 
Edward S. Stone............     975,731     7.8%     83,333                892,398             5.4%
 
Alpha Nickelberry..........     526,895     4.2%     45,000                481,895             3.0%
 
ING........................   2,927,192    23.5%    250,000              2,677,192            16.3%
 
All Directors and executive
  officers as a group (9
  persons).................   9,012,580    72.3%    991,738              8,020,842            48.7%
</TABLE>
------------------
(1) The address of each of Messrs. Delaney, Veloric, Goodman, Stone and
    Nickelberry is c/o the Company, The Graham Building, 15th and Ranstead
    Streets, 10th Floor, Philadelphia, Pennsylvania 19102. ING's address is 135
    East 57th Street, New York, New York 10022.
 
                                       52

<PAGE>
              CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
RELATIONSHIPS WITH PRINCIPALS
 
     Since founding JGW, Messrs. Delaney and Veloric have operated a number of
businesses not related to the business of the Company both through JGW and
through other corporations and partnerships under their joint control. Since
1991, Messrs. Delaney and Veloric have engaged in a merchant banking business
that specializes in the healthcare industry, performing through JGW and other
entities such activities as advising on strategic transactions and financings
and providing mortgage brokerage services (collectively the 'Healthcare
Business'). In connection with this business, Messrs. Delaney and Veloric formed
J.G. Wentworth Securities, Inc. ('Securities'), a registered broker-dealer in
compliance with the rules of the National Association of Securities Dealers,
Inc. and applicable federal and state regulatory authorities. In October 1996,
the activities related to the Healthcare Business conducted by JGW were assigned
to two partnerships controlled by Messrs. Delaney and Veloric, J. G. Wentworth
Mortgage Funding, L.P. ('Mortgage Funding') and J. G. Wentworth Partners, L.P.
('Partners LP'). Since their formation, Mortgage Funding and Partners LP have
paid management fees to JGW in consideration for the services performed by
Company personnel and for the Company's technological and administrative
resources. JGW billed Partners LP $122,000 in 1996 and an additional $345,000
for the six months ended June 30, 1997 for management and related services and
billed Mortgage Funding a de minimis amount for such services during the same
periods. Since its inception, Securities has not paid any management fees to JGW
or any of the other JGW Affiliated Companies.
 
     Messrs. Delaney and Veloric intend to divest themselves of all interests in
Securities, Mortgage Funding and Partners LP and cease active participation in
the Healthcare Business prior to completion of the Offering; however, if a
suitable buyer is not found such divestment may be delayed. After such
divestiture, all services performed by the Company on behalf of Securities,
Mortgage Funding and Partners LP will be performed under the terms of written
agreements approved by the Company's non-employee directors. In addition, the
Company will enter into agreements with Securities, Mortgage Funding and
Partners LP to permit their use of the Company's name for a limited period after
the completion of the Offering. The Company expects that in connection with such
divestitures, the Company, for the benefit of the purchasers, will make certain
representations and warranties and indemnities and other covenants customary in
transactions of such type. At June 30, 1997, Partners LP was indebted to the
Company for approximately $100,000 in management fees billed by JGW, which
amount represented the largest balance of such fees remaining unpaid since such
fees were charged. All such amounts are booked as related party receivables by
JGW and do not bear interest. At September 30, 1997, the remaining unpaid
balance of such indebtedness was $54,000. The Company expects that all unpaid
balances will be paid in full prior to completion of the Offering.
 
     In January 1996, JGW distributed to a partnership controlled by Messrs.
Delaney and Veloric all of its rights related to its development of a drug
formulary system, its 7.0% interest in a nursing home located in New Jersey and
its rights to be paid an investment banking fee of approximately $200,000. In
April 1996, the Company acquired rights to produce a musical recording and
shortly thereafter transferred such rights to J.G. Wentworth Short-term Funding

Corp., a corporation controlled by the Principals ('Short-term Funding'), for a
payment of $83,000. Prior to completion of the Offering, Short-term Funding will
sell to the Company, through SSC, its rights to payment under several lottery
claims and other financing transactions at their aggregate carrying value of
approximately $200,000. Mortgage Funding also originated a loan transaction
secured by royalty rights for musical recordings and publishing. Prior to
completion of the Offering, Mortgage Funding will transfer its rights under this
loan to the Company for $200,000, its net book value plus accrued interest.
 
     Certain minor personal transactions of the Principals have been conducted
through the offices of the Company. The Company maintained a record of personal
expenses paid through the Company and periodically the Principals reimbursed the
Company for past expenses or deposited personal funds with the Company to
finance anticipated expenses to be paid through the Company. Any indebtedness of
the Principals to the Company is booked as a related party receivable and does
not accrue interest. Neither
 
                                       53
<PAGE>
Mr. Goodman nor Mr. Veloric has been indebted to the Company for a material sum
since January 1, 1994. In August 1996, the balance of Mr. Delaney's account
showed indebtedness of $124,000 to the Company, the largest balance of such
indebtedness outstanding since the beginning of 1994. At September 30, 1997, no
indebtedness of Mr. Delaney to the Company remains outstanding. The Principals
do not intend to continue the practice of conducting personal transactions
through the Company after completion of the Offering. In addition, the
Principals have personally guaranteed the repayment of all amounts borrowed
under the MFC Facility, which guarantee is expected to be released in connection
with the Offering.
 
RELATIONSHIP WITH EDWARD S. STONE
 
     In May 1995, Mr. Stone began to provide legal and business consulting
services to the Company. The Law Offices of Edward S. Stone, Mr. Stone's legal
practice, billed the Company an aggregate of $0, $21,490 and $127,904 in 1995,
1996 and the six months ended June 30, 1997, respectively. Mr. Stone also
provided business consulting services to the Company through Stone International
LLC for which such company received $79,792, $115,939 and $36,827 in
compensation in 1995, 1996 and the six months ended June 30, 1997, respectively.
After completion of the Offering, Mr. Stone will continue to offer consulting
services to the Company and shall receive an annual fee of $175,000 in lieu of
legal or other fees otherwise payable to his legal practice or other entities he
controls.
 
RELATIONSHIP WITH ING
 
     In connection with providing the SSC Facility, ING became a 25% limited
partner in SSC. After completion of the Offering, ING is expected to own 16.3%
of the outstanding Common Stock. An affiliate of ING acts as agent with respect
to the Credit Facilities for both MFC and SSC and acts as placement agent for
the securitizations. The Company paid ING a placement agency fee of $1.2 million
for the June 1997 securitization and a placement agency fee of $1.2 million for
the September and October securitizations. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital

Resources' and 'Underwriting.'
 
     ING has a right of first refusal to act as placement agent in connection
with future securitizations of structured settlement receivables of up to an
aggregate of $200.0 million. At October 3, 1997, ING had acted as placement
agent in connection with the securitization of an aggregate of $60.5 million.
Accordingly, ING retains a right of first refusal with respect to $139.5 million
in future securitizations.
 
OTHER RELATIONSHIPS
 
     Prior to joining the Company in October 1997, Mr. Hillman's law firm served
as outside legal counsel to the Company. For legal services, the Company paid
$168,000, $240,000 and $215,000 to Mr. Hillman's law firm in 1995, 1996 and the
nine months ended September 30, 1997.
 
TRANSACTIONS IN CONNECTION WITH THE FORMATION
 
     On the date of the Reorganization, pursuant to the terms of a contribution
agreement (the 'Contribution Agreement'), the Principals will contribute all of
their capital stock in JGW, SSC Management and the General Partners and the
Existing Stockholders will contribute 100% of their interests in the
Partnerships to the Company, in exchange for a number of shares of Common Stock
determinable pursuant to a formula set forth in the Contribution Agreement. The
Reorganization will occur immediately prior to the completion of the Offering.
The Common Stock issued pursuant to the Contribution Agreement will constitute
all of the outstanding stock of the Company prior to the completion of the
Offering. The total number of shares distributable to the Existing Stockholders
in the Reorganization will be 12,466,367.
 
     As a result of the Reorganization, JGW and the General Partners, each of
which will become a wholly owned subsidiary of the Company, will be fully
subject to federal and state income taxes, and the Company will record a net
deferred tax liability on its balance sheet. From their formation until the
Reorganization, JGW and the General Partners have been treated as S corporations
for federal income
 
                                       54
<PAGE>
tax purposes and for certain state corporate income tax purposes. As a result,
the historical earnings of JGW and the General Partners have been taxed directly
to their respective stockholders at their individual federal and state income
tax rates. The amount of the deferred tax liability to be recorded as of the
date of termination of the S corporation status will result principally from
temporary differences between accounting and tax treatment of income earned from
finance receivables and Gain on Sale. The net deferred tax liability will be
recorded as a non-cash charge to the provision for taxes in the quarter in which
the Offering is completed. If the S corporation status of JGW and the General
Partners had been terminated as of June 30, 1997, the amount of the deferred tax
liability would have been approximately $6.2 million. See 'Risk
Factors--Possible Loss in Quarter; Variable Quarterly Earnings;'
'Capitalization' and 'Selected Combined Financial Data.'
 
     Since inception, JGW and the General Partners have paid approximately 92%

of their estimated taxable income, including an estimate for the six months
ended June 30, 1997 to the Principals as S corporation distributions
(approximately $1.2 million was distributed from January 8, 1991 through June
30, 1997). In September 1997, JGW made a distribution of $70,000. From June 30,
1997 through October 8, 1997 the Company distributed $2.1 million to the
Existing Stockholders and intends to distribute an additional $2.0 million to
the Existing Stockholders in October 1997. Such distributions were paid to the
Principals as distributions of a portion of JGW's and the General Partner's
earnings and to pay the Principals' taxes. On October 8, 1997, SSC distributed
$2.0 million to the Existing Stockholders and intends to distribute an
additional $2.0 million to the Existing Stockholders in October 1997. Since
inception through June 30, 1997, the Partnerships paid approximately $4.4
million to the Existing Stockholders. Prior to the Reorganization, JGW will
distribute an estimated $1.2 million Tax Distribution to the Principals. The Tax
Distribution represents the sum of approximately (i) $298,000 in taxes payable
at the applicable statutory rate by the Principals on the estimated net earnings
of JGW and the General Partners for the period from January 1, 1997 to November
30, 1997 and (ii) $939,000 in taxes payable at the applicable statutory rate by
the Principals on the estimated net profits of the Partnerships from January 1,
1997 to November 30, 1997.
 
     The Company, JGW, the General Partners and the Existing Stockholders have
entered into the Tax Agreement relating to their respective income tax
liabilities. Because JGW and the General Partners will be fully subject to
corporate income taxation after the termination of their S corporation status,
the reallocation of income and deductions between the period during which JGW
and the General Partners were treated as S corporations and the period during
which the Company, JGW and the General Partners will be subject to corporate
income taxation may increase the taxable income of one party while decreasing
that of another party. Accordingly, the Tax Agreement is intended to assure that
taxes are borne by the Company on the one hand and the Existing Stockholders on
the other only to the extent that such parties received the related income. The
Tax Agreement generally provides that the Company will indemnify the Existing
Stockholders against any liabilities of the Company after the Reorganization,
and the Existing Stockholders will indemnify the Company against any tax
liabilities of the Existing Stockholders prior to the date of the Reorganization
(in each case such indemnified amounts include interest and penalties and
related costs and expenses). The Company will also indemnify the Existing
Stockholders for all taxes imposed upon them as the result of their receipt of
an indemnification payment under the Tax Agreement. Any payment made by the
Company to the Existing Stockholders pursuant to the Tax Agreement may be
considered by the Internal Revenue Service or state taxing authorities to be
non-deductible by the Company for income tax purposes. The Tax Agreement also
provides that the Company will reimburse the Existing Stockholders for any taxes
that result from the disallowance of deductions taken by the Existing
Stockholders, the result of which is to permit the Company or JGW or the General
Partners to take such disallowed deductions after completion of the
Reorganization. None of the parties' obligations under the Tax Agreement are
secured, and, as such, there can be no assurance that the Existing Stockholders
or the Company will have funds available to make any payments which may become
due under the Tax Agreement. See 'The Reorganization and Change in Tax Status.'
 
                                       55

<PAGE>
                          DESCRIPTION OF CAPITAL STOCK
 
     The authorized capital stock of the Company consists of 30,000,000 shares
of Common Stock, and 5,000,000 shares of preferred stock, $.01 par value (the
'Preferred Stock'). Upon giving effect to the Reorganization but before
completion of the Offering, the Company will have 12,466,667 shares of Common
Stock outstanding. Upon completion of the Offering, the Company will have
16,466,667 shares of Common Stock outstanding. No shares of Preferred Stock are
currently outstanding.
 
COMMON STOCK
 
     The holders of Common Stock are entitled to receive dividends, when and as
declared by the Board of Directors, out of funds legally available therefor and
to receive pro rata the assets of the Company legally available for distribution
upon liquidation after payment to holders of preferred stock having a
liquidation preference over the Common Stock. In addition, holders of Common
Stock are entitled to one vote per share on all matters voted on by stockholders
generally, including the election of directors, and do not have cumulative
voting rights. There are no preemptive, conversion or redemption rights
applicable to the shares of the Common Stock. Accordingly, holders of a majority
of the shares of Common Stock entitled to vote in any election of directors may
elect all of the directors standing for election. The currently outstanding
shares of Common Stock are, and the shares of Common Stock offered by the
Company hereby, upon issuance by the Company against receipt of the purchase
price therefor, will be, fully paid and non-assessable. The Company's
Certificate of Incorporation provides that any action requiring stockholder
approval, other than the election of directors, shall require the affirmative
vote of a majority of the outstanding shares of Common Stock.
 
PREFERRED STOCK
 
     The Board of Directors is empowered by the Company's Certificate of
Incorporation to designate and issue from time to time one or more classes or
series of Preferred Stock without any action of the stockholders. The Board of
Directors may fix and determine the relative rights, preferences and limitations
of each class or series so authorized. The issuance of, or the ability to issue,
the preferred stock could adversely affect the voting power and other rights of
the holders of the Common Stock or could have the effect of decreasing the
market price of the Common Stock or discouraging or making difficult any attempt
by a person or group to obtain control of the Company, including any attempt
involving a bid for the Common Stock at a premium over the then market price.
The Company does not presently contemplate the issuance of any Preferred Stock.
 
ANTI-TAKEOVER PROVISIONS
 
     The Company's classified Board of Directors and the authority of the Board
to issue Preferred Stock and to determine the price, rights, preferences and
privileges with respect to those shares without any further vote or action by
the stockholders of the Company could have the effect of delaying, impeding or
discouraging the acquisition of control of the Company in a transaction not
approved by the Board of Directors. The provision of the By-laws classifying the
Board of Directors may be repealed or amended by a vote of stockholders entitled

to cast 66 2/3% of the votes at a meeting of stockholders. In addition, the
Company may obtain stockholder approval for certain actions without calling a
meeting or soliciting proxies because the Certificate of Incorporation and the
Company's By-laws permit actions by written consent of the stockholders without
a meeting.
 
     The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. In general, Section 203 prohibits a publicly held
Delaware corporation from engaging in a 'business combination' with an
'interested stockholder' for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner or unless the interested
stockholder acquired at least 85% of the corporation's voting stock (excluding
shares held by certain designated stockholders) in the transaction in which it
became an interested stockholder. A 'business combination' includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain
 
                                       56
<PAGE>
exceptions, an 'interested stockholder' is a person who, together with
affiliates and associates, owns, or within the previous three years did own, 15%
or more of the corporation's voting stock.
 
LIMITATIONS OF LIABILITY; INDEMNIFICATION OF OFFICERS AND DIRECTORS
 
     The Company's Certificate of Incorporation and By-laws contain certain
provisions relating to the limitation of liability and indemnification of
directors and officers. The Company's Certificate of Incorporation provides that
directors of the Company may not be held personally liable to the Company or its
stockholders for monetary damages for a breach of fiduciary duty, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, relating to prohibited dividends,
distributions and repurchases or redemptions of stock, or (iv) for any
transaction from which the director derives an improper benefit. However, such
limitation does not limit the availability of non-monetary relief in any action
or proceeding against a director. In addition, the Company's Certificate of
Incorporation and By-laws provide that the Company shall indemnify its directors
and officers to the fullest extent authorized by Delaware law.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services LLC.
 
                                       57

<PAGE>
                        SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon completion of the Offering, the Company will have 16,466,667 shares of
Common Stock outstanding. Of these shares, the 5,286,738 shares of Common Stock
sold in the Offering will be freely tradeable without restriction or
registration under the Securities Act. The remaining 11,179,929 shares of Common
Stock outstanding as of the date of this Prospectus are 'restricted securities'
as defined by Rule 144, all of which are held by the Selling Stockholders.
 
     In general, under Rule 144, a person who has beneficially owned shares for
at least one year, including an 'affiliate,' as that term is defined in the
Securities Act, is entitled to sell within any three-month period a number of
shares that does not exceed the greater of one percent of the then outstanding
shares of Common Stock (approximately 164,667 shares after the completion of the
Offering), or the average weekly trading volume during the four calendar weeks
preceding filing of notice of such sale, subject to certain requirements
concerning availability of public information, manner and notice of sale.
 
     In addition, affiliates must comply with the restrictions and requirements
of Rule 144, other than the one-year holding period requirement, in order to
sell shares of Common Stock which are not restricted securities. Under Rule
144(k), a person who is not an affiliate and has not been an affiliate for at
least three months prior to the sale and who has beneficially owned restricted
shares for at least a two year holding period may resell such shares without
compliance with the foregoing requirements.
 
     The Company, the Selling Stockholders, directors, executive officers and
certain other security holders of the Company, owning upon completion of the
Offering, in the aggregate, 11,179,929 shares of Common Stock, have agreed that,
they will not, directly or indirectly, offer, sell, offer to sell, contract to
sell, pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other sale or disposition) of any shares of Common Stock
or other capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for, any shares of Common Stock, or other capital
stock of the Company, for a period of 180 days from the date of this Prospectus,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, except that such agreement does not prevent the 
Company from granting additional options under the Company's stock option plans.
Prudential Securities Incorporated may, in its sole discretion, at any time and
without notice, release all or any portion of the securities subject to such
lock-up agreements.
 
     Upon completion of the Offering, it is expected that there will be 650,000
shares of Common Stock issuable upon exercise of options granted under the 1997
Stock Incentive Plan, which will vest in four equal annual installments
beginning on the first anniversary of the completion of the Offering. Pursuant
to the Underwriting Agreement, the Company has agreed not to file, at any time
prior to the date 180 days from the date of this Prospectus, a registration
statement under the Securities Act covering any of such shares. The Company,
however, intends to file a Form S-8 registration statement covering a portion of
these shares within one year from the date of this Prospectus. The shares
registered under such registration statement will be available for resale in the

open market upon the exercise of vested options, subject to Rule 144 volume
limitations applicable to affiliates.
 
     Prior to the Offering, there has been no public market for the Common
Stock. Sales of substantial amounts of shares of the Common Stock in the public
market following the Offering could adversely affect the market price of the
Common Stock, making it more difficult for the Company to sell equity securities
in the future at a time and price which it deems appropriate.
 
                                       58

<PAGE>
                                  UNDERWRITING
 
     The underwriters named below (the 'Underwriters'), for whom Prudential
Securities Incorporated, Oppenheimer & Co., Inc. and Furman Selz LLC are acting
as representatives (the 'Representatives'), have severally agreed, subject to
the terms and conditions contained in the Underwriting Agreement to purchase
from the Company and the Selling Stockholders the number of shares of Common
Stock set forth below opposite their respective names:
 
                                            NUMBER OF
UNDERWRITERS                                 SHARES
-----------------------------------------   ---------

Prudential Securities Incorporated.......
Oppenheimer & Co., Inc...................
Furman Selz LLC..........................




                                            ---------
     Total...............................
                                            ---------
                                            ---------
 
     The Company and the Selling Stockholders are obligated to sell, and the
Underwriters are obligated to purchase, all of the shares of Common Stock
offered hereby, if any are purchased.
 
     The Underwriters, through the Representatives, have advised the Company and
the Selling Stockholders that they propose to offer the Common Stock initially
at the public offering price set forth on the cover page of this Prospectus;
that the Underwriters may allow to selected dealers a concession of $      per
share; and that such dealers may reallow a concession of $          per share to
certain other dealers. After the Offering, the public offering price and the
concessions may be changed by the Representatives.
 
     The Selling Stockholders have granted to the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
793,011 additional shares of Common Stock at the initial public offering price,
less underwriting discounts and commissions, as set forth on the cover page of
this Prospectus. The Underwriters may exercise such option solely for the
purpose of covering over-allotments incurred in the sale of the shares of Common
Stock offered hereby. To the extent such option is exercised, each Underwriter
will become obligated, subject to certain conditions, to purchase approximately
the same percentage of such additional shares as the number set forth next to
such Underwriter's name in the preceding table.
 
     The Company, the Selling Stockholders, directors, executive officers and
certain other security holders of the Company have agreed that they will not,
directly or indirectly, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option to

purchase or other sale or disposition) of any shares of Common Stock or of
equity securities of the Company substantially similar thereto or any securities
convertible into, or exchangeable or exercisable for, any shares of Common Stock
or such similar securities for a period of 180 days after the date of this
Prospectus, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, except that during such
period, shares of Common Stock may be issued upon the exercise of outstanding
stock options and the Company may issue employee stock options which are
exercisable after the 180th day after the date of this Prospectus. Prudential
Securities Incorporated may, in its sole discretion, at any time and without
prior notice, release all or any portion of the shares of Common Stock subject
to such lock-up agreements.

 
                                       59
<PAGE>

     The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against and contribute to losses arising out of certain
liabilities, including liabilities under the Securities Act.
 
     The Representatives have informed the Company and the Selling Stockholders
that the Underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.
 
     Prior to the Offering, there has been no public market for the Common Stock
of the Company. Consequently, the offering price will be determined through
negotiations between the Company and the Representatives. Among the factors to
be considered in making such determination will be prevailing market conditions,
the Company's financial and operating history and condition, its prospects and
prospects for the industry in general, the management of the Company and the
market prices of securities for companies in businesses similar to that of the
Company.
 
     In connection with the Offering, certain Underwriters and selling group
members (if any) and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the selling
Underwriters by selling more Common Stock in connection with the Offering then
they are committed to purchase from the Company, and in such case may purchase
Common Stock in the open market following completion of the Offering to cover
all or a portion of such short position, up to 793,011 shares of Common Stock,
by exercising the Underwriters' over-allotment option referred to above. In
addition, Prudential Securities Incorporated, on behalf of the Underwriters, may

impose 'penalty bids' under contractual arrangements with the Underwriters
whereby it may reclaim from an Underwriter (or dealer participating in the
Offering) for the account of the other Underwriters, the selling concession with
respect to the Common Stock that is distributed in the Offering but subsequently
purchased for the account of the Underwriters in the open market. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the Common Stock at a level above that which might otherwise prevail in
the open market. None of the transactions described in this paragraph is
required, and, if any is undertaken, it may be discontinued at any time.
 
     Under the Rules of Fair Practice of the National Association of Securities
Dealers ('NASD'), if more than 10% of the net proceeds of a public offering of
securities, not including underwriting compensation, are intended to be paid to
members of the NASD or affiliated or associated persons that are participating
in the distribution of the offering, the initial public offering price at which
the securities are distributed to the public must be no lower than that
recommended by a 'qualified independent underwriter,' as defined in Rule 2720 of
the Conduct Rules of the NASD. ING, an affiliate of Furman Selz LLC, one of the
Representatives, will be participating in the Offering as a Selling Stockholder
and, following completion of the Offering, will own approximately 16.3% of the
outstanding Common Stock. The Company also intends to use a substantial portion
of the net proceeds of the Offering to pay down amounts outstanding on the
Credit Facilities, in connection with which ING serves as agent. Accordingly,
ING is expected to receive in the aggregate more than 10% of the net proceeds of
the Offering. Prudential Securities Incorporated has agreed to act as the
qualified independent underwriter in connection with this Offering. The initial
public offering price of the Common Stock as set forth on the cover of this
Prospectus will not be lower than that recommended by Prudential Securities
Incorporated.
 
                                 LEGAL MATTERS
 
     The validity of the shares offered hereby will be passed upon for the
Company by Wolf, Block, Schorr and Solis-Cohen LLP, Philadelphia, Pennsylvania.
Certain legal matters relating to the Offering will be passed upon for the
Underwriters by Stroock & Stroock & Lavan LLP, New York, New York.
 
                                    EXPERTS
 
     The combined balance sheets as of December 31, 1996 and 1995 and the
combined statements of operations, changes in equity and cash flows for each of
the three years in the period ended December 31, 1996 included in this
Prospectus and the Registration Statement have been included in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
 
                                       60

<PAGE>
                             ADDITIONAL INFORMATION
 
     The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-1 under the
Securities Act with respect to the shares of Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information with
respect to the Company and the shares of Common Stock, reference is hereby made
to the Registration Statement and the exhibits and schedules filed as a part
thereof. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference. The Registration Statement, including exhibits and
schedules thereto, may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's Regional Offices located at Seven World Trade
Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
may also be obtained at prescribed rates from the Public Reference Section of
the Commission, Washington, D.C. 20549. In addition, registration statements and
certain other filings made with the Commission through its Electronic Data
Gathering, Analysis and Retrieval ('EDGAR') systems are publicly available
through the Commission's site on the Internet's World Wide Web, located at
http://www.sec.gov. The Registration Statement, including all exhibits thereto
and amendments thereof, has been filed with the Commission through EDGAR.
 
                          ANNUAL AND QUARTERLY REPORTS
 
     After the Offering, the Company will be subject to the information
requirements of the Securities Exchange Act of 1934, as amended, and in
accordance therewith will file reports, proxy statements and other information
with the Commission. The Company intends to furnish its stockholders with annual
reports containing financial statements audited by its independent auditors and
quarterly reports for the first three quarters of each fiscal year containing
unaudited condensed financial information.
 
                                       61

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES
 
                     INDEX TO COMBINED FINANCIAL STATEMENTS
 
                                                                          PAGE
                                                                          ----
Report of Independent Accountants.....................................     F-2
 
Combined Balance Sheets as of December 31, 1995, 1996 and June 30,
  1997 (unaudited)....................................................     F-3
 
Combined Statements of Operations for the years ended December 31,
  1994, 1995, 1996 and the six months ended June 30, 1996 (unaudited)
  and 1997 (unaudited)................................................     F-4
 
Combined Statements of Changes in Equity (Deficit) for the years ended
  December 31, 1994, 1995, 1996 and the six months ended June 30, 1997
  (unaudited).........................................................     F-5
 
Combined Statements of Cash Flows for the years ended December 31,
  1994, 1995, 1996 and the six months ended June 30, 1996 (unaudited)
  and 1997 (unaudited)................................................     F-6
 
Notes to Combined Financial Statements................................     F-7
 
                                      F-1

<PAGE>
                       REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Stockholders and Partners of
J. G. Wentworth Affiliated Companies:
 
We have audited the accompanying combined balance sheets of J. G. Wentworth
Affiliated Companies (the 'Company') as of December 31, 1995 and 1996, and the
related combined statements of operations, changes in equity (deficit) and cash
flows for each of the three years in the period ended December 31, 1996. These
combined financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall combined
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
 
In our opinion, the combined financial statements referred to above present
fairly in all material respects, the combined financial position of J. G.
Wentworth Affiliated Companies as of December 31, 1995 and 1996, and the
combined results of their operations and their cash flows for each of the three
years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.
 
COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
September 19, 1997 except for Note 15
as to which the date is October 8, 1997
 
                                      F-2

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES
 
                            COMBINED BALANCE SHEETS
                                ($ IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                 JUNE 30 (UNAUDITED)
                                              DECEMBER 31,       --------------------
                                           ------------------               PRO FORMA
                                            1995       1996       1997        1997
                                           -------    -------    -------    ---------
<S>                                        <C>        <C>        <C>        <C>
                 ASSETS

Cash and cash equivalents...............   $ 1,509    $   102    $   611     $   611
Finance receivables.....................    60,104     90,930     71,757      71,757
Allowance for credit losses.............        --       (500)    (1,520)     (1,520)
Office equipment........................
  Net of accumulated depreciation of $73
    in 1995, $111 in 1996 and $265 in
    June 30, 1997.......................        98        524      2,125       2,125
Servicing asset.........................        --         --        890         890
Retained interests......................        --         --      5,219       5,219
Restricted cash.........................        --         --        709         709
Other assets............................     1,276        919      1,654       1,654
                                           -------    -------    -------    ---------
      Total assets......................   $62,987    $91,975    $81,445     $81,445
                                           -------    -------    -------    ---------
                                           -------    -------    -------    ---------
              LIABILITIES

Notes payable, banks....................   $56,907    $91,858    $75,165     $75,165
Overdraft payable.......................       955      1,457        968         968
Accounts payable........................     2,299      1,541      1,739       2,945
Accrued expenses........................        88        798      2,556       2,556
Claims payable..........................     1,694        724      1,707       1,707
Deferred tax liability..................        --         --         --       6,200
                                           -------    -------    -------    ---------
      Total liabilities.................    61,943     96,378     82,135      89,541
 
Commitments and contingencies (note 11)

            EQUITY (DEFICIT)

Common stock............................         2          2          2         125
Additional paid-in capital..............       261        261        261      (3,960)
Retained earnings.......................       512        285      1,939      (4,261)
Partner capital (deficit) accounts......       269     (4,732)    (2,861)         --
Due from stockholders or partners.......        --       (219)       (31)         --
                                           -------    -------    -------    ---------
      Total equity (deficit)............     1,044     (4,403)      (690)     (8,096)
                                           -------    -------    -------    ---------
    Total liabilities and equity
      (deficit).........................   $62,987    $91,975    $81,445     $81,445
                                           -------    -------    -------    ---------
                                           -------    -------    -------    ---------
</TABLE>
 
                The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-3

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES
 
                       COMBINED STATEMENTS OF OPERATIONS
                   ($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
 
<TABLE>
<CAPTION>
                                             YEAR ENDED DECEMBER 31,      SIX MONTHS ENDED JUNE 30,
                                           ---------------------------    --------------------------
                                            1994      1995      1996         1996           1997
                                           ------    ------    -------    -----------    -----------
                                                                          (UNAUDITED)    (UNAUDITED)
<S>                                        <C>       <C>       <C>        <C>            <C>
Revenue:
  Interest income.......................   $2,755    $8,560    $10,426      $ 5,601        $ 8,743
  Gain on sale of receivables...........       --       268        576           --         11,419
  Other income..........................      417       894        785          319            386
                                           ------    ------    -------    -----------    -----------
    Total revenues......................    3,172     9,722     11,787        5,920         20,548
                                           ------    ------    -------    -----------    -----------
Expenses:
  Interest expense......................    1,541     4,995      6,380        2,820          4,783
  Marketing expenses....................      148       224      3,606        1,010          3,682
  Salaries and benefits.................      686     1,509      1,992          697          2,384
  Other expense.........................      873     1,350      3,384        2,588          1,800
  Provision for credit losses...........       --        --        500          165          1,630
                                           ------    ------    -------    -----------    -----------
    Total expenses......................    3,248     8,078     15,862        7,280         14,279
                                           ------    ------    -------    -----------    -----------
Income (loss) before extraordinary
  loss..................................      (76)    1,644     (4,075)      (1,360)         6,269
Extraordinary loss......................       --      (876)        --           --             --
                                           ------    ------    -------    -----------    -----------
  Net income (loss).....................   ($  76)   $  768    ($4,075)     ($1,360)       $ 6,269
                                           ------    ------    -------    -----------    -----------
                                           ------    ------    -------    -----------    -----------
(Unaudited) Pro forma information:
Pro forma (benefit) provision for
  taxes.................................                                    ($1,508)       $ 2,320
Pro forma net income (loss).............                                    ($2,567)       $ 3,949
Pro forma net income (loss) per share...                                    ($  .20)       $   .31
Pro forma number of shares
  outstanding...........................                                     12,549         12,549
</TABLE>
 
                The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-4

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES
 
               COMBINED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
                                ($ IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                       PARTNER
                                           ADDITIONAL                  CAPITAL       DUE FROM
                                 COMMON     PAID-IN      RETAINED     (DEFICIT)    STOCKHOLDERS
                                 STOCK      CAPITAL      EARNINGS     ACCOUNTS     OR PARTNERS      TOTAL
                                 ------    ----------    ---------    ---------    ------------    -------
<S>                              <C>       <C>           <C>          <C>          <C>             <C>
Balance, January 1, 1994......     $1         $249        $    53      $   401        $   --       $   704
Net income (loss).............     --           --           (256)         180            --           (76)
                                   --        -----       ---------    ---------       ------       -------
Balance, December 31, 1994....      1          249           (203)         581            --           628
Capital contributions.........      1           12             --          450            --           463
Distributions and dividends...     --           --            (22)        (793)           --          (815)
Net income....................     --           --            737           31            --           768
                                   --        -----       ---------    ---------       ------       -------
Balance, December 31, 1995....      2          261            512          269            --         1,044
Capital contributions.........     --           --             --          762            --           762
Distributions and dividends...     --           --           (285)      (1,630)           --        (1,915)
Net income (loss).............     --           --             58       (4,133)           --        (4,075)
Receivable from partner.......     --           --             --           --          (219)         (219)
                                   --        -----       ---------    ---------       ------       -------
Balance, December 31, 1996....      2          261            285       (4,732)         (219)       (4,403)
Repayments (unaudited)........     --           --             --           --           188           188
Distributions and dividends
  (unaudited).................     --           --           (794)      (1,950)           --        (2,744)
Net income (unaudited)........     --           --          2,448        3,821            --         6,269
                                   --        -----       ---------    ---------       ------       -------
Balance, June 30, 1997
  (unaudited).................     $2         $261        $ 1,939      $(2,861)       $  (31)      $  (690)
                                   --        -----       ---------    ---------       ------       -------
                                   --        -----       ---------    ---------       ------       -------
</TABLE>
 
                The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-5

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

                       COMBINED STATEMENTS OF CASH FLOWS
                                ($ IN THOUSANDS)
 
<TABLE>
<CAPTION>
                                                                                                  SIX MONTHS ENDED
                                                                  YEAR ENDED DECEMBER 31,             JUNE 30,
                                                               ------------------------------    ------------------
                                                                1994        1995       1996       1996       1997
                                                               -------    --------    -------    -------    -------
                                                                                                    (UNAUDITED)
<S>                                                            <C>        <C>         <C>        <C>        <C>
Cash flows from operating activities:
  Net income (loss).........................................   $   (76)   $    768    $(4,075)   $(1,360)   $ 6,269
  Adjustments to reconcile net income (loss) to net cash
    used in operations:
      Amortization and depreciation.........................       632       1,516      1,360        683      1,274
      Accretion of unearned income..........................    (2,968)     (8,718)   (12,303)    (5,779)    (9,714)
      Gain on sale of receivables...........................        --        (268)      (576)        --    (11,419)
      Provision for credit losses...........................        --          --        500        165      1,630
  Changes in assets and liabilities:
      (Increase) decrease in other assets...................       (43)       (311)       357        125       (735)
      Increase (decrease) in accounts payable...............       305       1,656       (743)    (1,081)       209
      Increase in accrued expenses..........................        --          17        710        114      1,758
      Increase (decrease) in claims payable.................        --       1,506       (970)    (1,506)       983
                                                               -------    --------    -------    -------    -------
           Total adjustments................................    (2,074)     (4,602)   (11,665)    (7,279)   (16,014)
                                                               -------    --------    -------    -------    -------
      Net cash (used in) operations.........................    (2,150)     (3,834)   (15,740)    (8,639)    (9,745)
                                                               -------    --------    -------    -------    -------
Cash flows from investing activities:
  Finance receivable collections............................     4,152      44,328     50,857     24,683     26,067
  Finance receivable purchases, including acquisition
    costs...................................................   (32,721)    (62,351)   (76,755)   (30,398)   (51,568)
  Proceeds from sale of receivables, net....................        --          --      6,671         --     58,269
  Increase in restricted cash...............................        --          --         --         --       (709)
  Proceeds from disposition of equipment....................        --          44         53         --        560
  Purchase of equipment.....................................       (34)        (45)      (559)      (173)    (2,316)
                                                               -------    --------    -------    -------    -------
      Net cash (used in) provided by investing activities...   (28,603)    (18,024)   (19,733)    (5,888)    30,303
                                                               -------    --------    -------    -------    -------

Cash flows from financing activities:
  Net draws against notes payable, banks....................    29,572      24,256     34,951     14,232    (16,693)
  Partners' capital distributions and dividends to
    shareholders............................................        --        (815)    (1,915)    (1,112)    (2,744)
  Partners' and stockholders' capital contributions.........        11         463        762        395         --
  (Decrease) increase in overdraft payable..................       981        (355)       502        (79)      (489)
  Principal payments under capital lease obligation.........        (1)        (15)       (15)        (9)       (11)
  Payments for financing costs..............................       (32)       (215)        --         (2)      (300)
  Repayments on amounts due from stockholders or partners...        --          --         --         --        188
  Borrowings from stockholders or partners..................       310          --       (219)        --         --
  Repayment of investor notes...............................      (145)         --         --         --         --
                                                               -------    --------    -------    -------    -------
      Net cash provided by (used in) financing activities...    30,696      23,319     34,066     13,425    (20,049)
                                                               -------    --------    -------    -------    -------
Net increase (decrease) in cash and cash equivalents........       (57)      1,461     (1,407)    (1,102)       509
Cash and cash equivalents, beginning of period..............       105          48      1,509      1,509        102
                                                               -------    --------    -------    -------    -------
Cash and cash equivalents, end of period....................   $    48    $  1,509    $   102    $   407    $   611
                                                               -------    --------    -------    -------    -------
                                                               -------    --------    -------    -------    -------
Supplemental disclosure of cash flow information:
  Cash paid during the period for interest..................   $ 1,466    $  4,333    $ 5,624    $ 2,684    $ 4,674
Noncash transactions:
  Gross charge-offs.........................................   $    --    $     --    $    --    $    --    $   610
  Refinancing of notes payable..............................   $    --    $ 56,014    $    --    $    --    $    --
  Retained interest.........................................   $    --    $     --    $    --    $    --    $ 5,219
  Servicing asset...........................................   $    --    $     --    $    --    $    --    $   890
</TABLE>
 
                The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-6

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

                     NOTES TO COMBINED FINANCIAL STATEMENTS
 
1. ORGANIZATION AND BASIS OF PRESENTATION
 
     The combined financial statements include the accounts of the following
affiliated entities under common management, including: J. G. Wentworth and
Company, Inc. ('JGW'), J.G. Wentworth Structured Settlement Funding Corporation
('SSFC'), J.G. Wentworth S.S.C., Limited Partnership ('SSC'), J.G. Wentworth
Funding Corp. ('FC'), and J.G. Wentworth MFC Associates, L.P. ('MFC'),
(collectively referred to herein as 'J.G. Wentworth Affiliated Companies' or the
'Company'). All significant transactions between the affiliated entities have
been eliminated in the accompanying combined financial statements.
 
     JGW is a Pennsylvania corporation, incorporated on January 8, 1991, whose
primary purpose is to provide management services to the affiliated entities in
connection with the administration of insurance and lottery claims. SSFC is a
Delaware corporation that serves as the General Partner in SSC, a Delaware
limited partnership. Both SSFC and SSC commenced operations on August 25, 1995.
FC is a Pennsylvania corporation that serves as the General Partner in MFC, a
Delaware limited partnership. Both FC and MFC commenced operations on June 11,
1993.
 
     SSC acquires the seller's right to receive payments with respect to settled
insurance company claims and annuities ('structured settlements') and state
lottery winnings ('lottery claims') which are paid to the recipient over a
period of years in return for a discounted lump sum payment to the seller. MFC
acquires settled bodily injury claims ('BI Claims') made to the New Jersey
Automobile Full Insurance Underwriting Association ('JUA'), the New Jersey
Market Transition Facility ('MTF') or other affiliated entities, for which
payment has been deferred twelve or eighteen months. The JUA and MTF pay BI
Claims on a specific date with interest accruing at 6% annually and payable to
MFC. MFC is restricted in its ability to purchase additional BI Claims since the
MTF has discontinued the deferral of claims. Structured settlements, lottery
claims and BI Claims are collectively referred to herein as finance receivables.
 
     Prior to the completion of the initial public offering, the Company will
reorganize (the 'Reorganization') whereby SSC and MFC will contribute all of
their limited partnership interests and SSFC, FC and JGW will contribute all of
their capital stock in exchange for shares of common stock of a newly formed
corporation, entitled J.G. Wentworth & Company, Inc. In connection with the
Reorganization, management plans to account for the exchange of ownership
interests at their historical carry-over basis given that, (i) the affiliated
entities are under common management, (ii) the current ownership distribution of
SSC (the most significant affiliate of the Company) will generally approximate
the ownership percentages of the newly formed company, and (iii) the
reorganization will not have a substantial economic effect on the stockholder
group.

2. UNAUDITED PRO FORMA INFORMATION
 
     The unaudited pro forma combined balance sheet represents the financial
position as of June 30, 1997 adjusted to give effect to the establishment of
$6,200,000 of net deferred tax liabilities that would have been recorded had the
Company been taxed as a C corporation and to give effect to the $1,237,000
distribution to S corporation stockholders and partners. The principal
components of the Company's net deferred tax liabilities relate to the method of
recognizing interest income and the recognition of gain on sale of finance
receivables.
 
     The unaudited pro forma combined net income (loss) represents the results
of operations adjusted to reflect the change in the Company's income tax status
to a C corporation using a pro forma blended federal and state income tax rate
of 37%. The pro forma income (loss) per share is computed based on 12,466,667
shares outstanding before the initial public offering giving effect to the
Reorganization and reflects the issuance of 82,467 shares of Common Stock which
would be needed to generate the cash to fund the S corporation distribution at
the assumed initial public offering price of $15 per share.
 
                                      F-7
<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Finance Receivables
 
     The Company purchases finance receivables at a discount from their maturity
value. This discount is recorded as unearned income and is netted against
finance receivables in the accompanying combined financial statements. Unearned
income on finance receivables is recognized as interest income using the
interest method over the life of the related finance receivables.
 
     Certain direct acquisition costs are capitalized and recognized as an
adjustment to interest income over the contractual lives of the related finance
receivables utilizing the interest method.
 
  Allowance for Credit Losses
 
     The Company maintains an allowance for credit losses at a level that
management considers adequate to provide for potential losses in the finance
receivable portfolio based upon current economic conditions, past experience,
known and inherent risks in the portfolio and other relevant factors. These
credit losses principally result from individual payments not collected on
finance receivables. The Company will charge-off the defaulted payment balance
at the time it determines it to be uncollectible or if there has been no
progress toward restoration of the defaulted payments for a twelve-month period.

     The Company calculates the allowance for credit losses in accordance with
Statement of Financial Accounting Standards No. 114, Accounting by Creditors for
Impairment of a Loan. Management considers the portfolio of structured
settlements to be homogeneous, except finance receivables in excess of $250,000.
Management individually determines the valuation of impairment on large
structured settlements and collectively evaluates the remaining portfolio for
impairment.
 
  Securitizations
 
     Effective January 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities ('SFAS 125'). SFAS 125, which
is effective for transfers and extinguishments occurring after December 31,
1996, provides consistent standards for distinguishing transfers of financial
assets that are sales from transfers that are secured borrowings.
 
     Gains or losses on securitization transactions are determined based upon
the difference between the proceeds of the receivables sold and the allocation
of recorded investment therein. The Company allocates the recorded investment in
the receivables between the receivables sold, the portion retained, and the
servicing asset based on their respective fair values on the date of sale.
 
     Currently, the Company does not classify finance receivables held for sale.
The Company intends to continue to sell finance receivables in the future based
on eligibility requirements determined at the time of each transaction.
 
  Retained Interests
 
     Retained interests represent subordinated Class B certificates and excess
cash flows from the June 1997 securitization. The amounts are classified as held
to maturity and carried at amortized cost in accordance with Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities, as the underlying cash flows are not subject to
prepayment risk and the Company has both the ability and intent to hold these
securities to maturity.
 
  Servicing Asset
 
     A servicing asset is determined by allocating the finance receivables
previous carrying amount between the servicing asset, the finance receivables
that were sold, and the interest retained, if any, based on their relative fair
values at the date of sale. The fair value of the servicing asset is initially
calculated from market estimates of other servicing arrangements using a
discount rate that
 
                                      F-8

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

management believes is appropriate. The servicing asset is amortized in
proportion to, and over the period of, estimated net servicing income. The
servicing asset recorded at June 30, 1997 amounted to $890,000.
 
     Impairment of the servicing asset and the retained interests are evaluated
through an assessment of the fair value of the discounted cash flows method
under which the expected cash flows are adjusted to actual and discounted to
present value. The net carrying value is compared to its discounted estimated
cash flow remaining to determine whether adjustments should be made to the
carrying value or amortization schedule.
 
     The net cash flows of the receivables are currently not subject to
prepayment. Impairment of a servicing asset or retained interests is recognized
through a valuation allowance and a charge to current period earnings if it is
considered to be temporary, or, through a direct write-down of the asset and a
charge to current period net income if it is considered other than temporary.
Currently, the Company has not recorded a valuation allowance or a write-down
for these assets.
 
  Restricted Cash
 
     In connection with the June 1997 securitization transaction, the Company is
required to maintain a cash reserve account with the trustee. This amount has
been presented on the combined balance sheet as restricted cash.
 
  Income Taxes
 
     Affiliated entities within the Company are currently taxed as S
corporations or partnerships under the Internal Revenue Code and under
applicable provisions of Pennsylvania law. Accordingly, no provision has been
made for income taxes since all income is taxed and losses and tax credits are
utilized directly by the stockholders or partners.
 
     The affiliated entities will terminate their S corporation status upon the
Reorganization. Subsequent to the Reorganization, the Company intends to file a
consolidated federal income tax return. Upon termination of the tax status and
completion of the Reorganization, the Company will apply SFAS No. 109,
Accounting for Income Taxes ('SFAS 109'), to its arising temporary differences.
Under the asset and liability method prescribed by SFAS 109, deferred tax assets
and liabilities are recognized for future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis (temporary differences) using
currently enacted tax rates. The effect on deferred tax assets or liabilities of
a change in tax rates is recognized in income in the period that includes the
enactment date of the tax change. Under SFAS 109, deferred tax assets are
recognized for deductible temporary differences and operating loss and tax
credit carryforwards, and then a valuation allowance is established to reduce

that deferred tax asset if it is 'more likely than not' that the related tax
benefits will not be realized.
 
     On a pro forma basis, the net deferred tax liability at June 30, 1997,
resulted primarily from differences in the financial statement and tax treatment
of income earned from the finance receivables and the gain on sale of
receivables. The net deferred tax liability will be recorded as a non-cash
charge to the provision for taxes in the quarter in which the proposed initial
public offering is completed.
 
  Marketing Expenses
 
     The Company's policy is to expense marketing costs as incurred.
 
  Cash Flow Statement
 
     For purposes of the combined statement of cash flows, the Company considers
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. The Company's cash management program
utilizes zero balance accounts. Accordingly, book overdraft balances have been
reclassified to overdraft payable.
 
                                      F-9
<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

  Recent Accounting Pronouncements
 
     In March 1997, the FASB issued Statement of Financial Accounting Standards
No. 128, Earnings per Share ('SFAS 128') which supersedes Accounting Principles
Board Opinion No. 15, Earnings per Share ('APB 15'), and is effective for the
Company for the year ending December 31, 1997. This statement requires
restatement of all prior-period earnings per share data presented. SFAS 128
establishes standards by simplifying the computation and presentation of
earnings per share ('EPS'), and applies to entities with publicly held common
stock or potential common stock. It replaces the presentation of primary EPS
with a presentation of basic EPS. It also requires dual presentation of basic
and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. Basic EPS excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS pursuant to APB 15. If EPS had been calculated in
accordance with SFAS 128, the basic EPS and diluted EPS for the six months ended
June 30, 1997 would have been the same as primary EPS under APB 15.

     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ('SFAS 130'), which is effective for the
Company for the year ending December 31, 1998, and requires restatement of all
prior-period financial statements presented for comparative purposes. SFAS 130
establishes standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements and SFAS 130 requires that all items are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. It is anticipated that the
adoption of SFAS 130 will not have a material effect on the combined financial
position or results of operations of the Company.
 
  Use of Estimates
 
     The preparation of combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the combined
financial statements and the amount of revenues and expenses during the reported
period. Actual results may differ from those estimates.
 
  Unaudited Information
 
     In the opinion of management, the unaudited Combined Financial Statements
and related notes as of June 30, 1997 and for the six months ended June 30, 1996
and 1997 reflect all adjustments (which include normal recurring adjustments)
necessary to present fairly the combined statements of operations, cash flows
and balance sheets for the periods presented. The combined results for the
interim periods are not necessarily indicative of combined results to be
expected for the full year.
 
                                      F-10

<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
4. FINANCE RECEIVABLES
 
     Finance receivables consist of the following:
 
                                              DECEMBER 31,
                                           -------------------     JUNE 30,
                                            1995        1996         1997
                                           -------    --------    -----------
                                                 (000's)            (000's)
                                                                  (UNAUDITED)

Structured settlements..................   $13,639    $133,365     $  119,451
BI claims...............................    56,583      30,668         18,605
Lottery claims..........................     4,598       2,028            164
                                           -------    --------    -----------
  Maturity value........................    74,820     166,061        138,220
Unearned income.........................   (15,348)    (83,656)       (73,448)
Deferred acquisition costs, net.........       632       8,525          6,985
                                           -------    --------    -----------
  Carrying value........................   $60,104    $ 90,930     $   71,757
                                           -------    --------    -----------
                                           -------    --------    -----------
 
     At December 31, 1996 and June 30, 1997, the contractual maturities of
finance receivables were as follows:
 
                              DECEMBER 31,     JUNE 30,
                                  1996           1997
                              ------------    -----------
                                (000's)         (000's)
                                              (UNAUDITED)

     1997..................     $ 32,048       $   18,737
     1998..................        8,342           21,950
     1999..................       12,626           15,402
     2000..................        6,897           12,596
     2001..................       17,726           11,480
     2002 and thereafter...       88,422           58,055
                              ------------    -----------
                                $166,061       $  138,220
                              ------------    -----------
                              ------------    -----------
 
     On June 13, 1997, the Company sold a substantial portion of its structured
settlements (the receivables) to outside investors ('A Certificate Holders')
through a private placement securitization transaction. Proceeds of the
securitization amounted to $59,546,000 which resulted in a gain on sale of
receivables of $11,284,000. The Company sold the receivables for cash, and
retained a subordinate interest (the 'B Certificates') and any remaining cash

flows, after expenses, of the securitized receivables. The A Certificate
Holders' recourse to the Company is limited to the retained interests and the
required cash reserve balance. The Company will service the receivables sold for
a fee.
 
                                      F-11
<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
4. FINANCE RECEIVABLES -- (CONTINUED)

     Changes in the allowance for credit losses during the periods indicated
were as follows:
 
                                              DECEMBER 31,
                                           -------------------     JUNE 30,
                                            1995        1996         1997
                                           -------    --------    -----------
                                                 (000's)            (000's)
                                                                  (UNAUDITED)

Balance, beginning of period............   $    --    $     --     $      500
Provision for credit losses.............        --         500          1,630
Charge-offs.............................        --          --           (610)
                                           -------    --------    -----------
Balance, end of period..................   $     0    $    500     $    1,520
                                           -------    --------    -----------
                                           -------    --------    -----------
 
     No finance receivables were individually identified as impaired for the
periods ended December 31, 1995, 1996 and June 30, 1997.
 
5. OFFICE EQUIPMENT
 
     Office equipment at December 31, 1995 and 1996 were as follows:
 
                                                DECEMBER 31,
                                                ------------
                                                1995    1996
                                                ----    ----
                                                  (000's)

     Equipment...............................   $ 65    $109
     Furniture...............................     35     193
     Data processing systems.................     71     333
                                                ----    ----
                                                 171     635
       Less accumulated depreciation.........    (73)   (111)
                                                ----    ----
                                                $ 98    $524
                                                ----    ----
                                                ----    ----

     Depreciation expense for the years ended December 31, 1994, 1995 and 1996
was $21,000, $46,000 and $114,000, respectively.
 
6. NOTES PAYABLE TO BANKS
 
     A summary of Notes Payable to Banks is as follows:
 
                                   DECEMBER 31,
                                ------------------     JUNE 30,
                                 1995       1996         1997
                                -------    -------    -----------
                                     (000's)            (000's)
                                                      (UNAUDITED)

     Notes Payable-MFC (a)...   $49,616    $27,414      $16,783
     Notes Payable-SSC (b)...     7,291     64,444       58,382
                                -------    -------    -----------
                                $56,907    $91,858      $75,165
                                -------    -------    -----------
                                -------    -------    -----------
 
(A) NOTES PAYABLE, MFC
 
     On May 26, 1995, MFC consummated a $90,000,000 revolving credit agreement
with a lender which replaced the revolving credit and term loan and subordinated
term loan agreements outstanding on December 31, 1994. Pursuant to an amendment
dated March 20, 1996 the credit facility was reduced to $80,000,000. MFC has the
option to convert all or any portion of the loan accruing interest at the Base
Rate Option to a fixed rate loan with a stated maturity date (the 'Fixed Rate
Option'). At December 31, 1996, $25,968,000 has been converted to fixed rates
and with maturities less than 1 year. The credit agreement, as amended in 1997,
was reduced to $20,000,000 and expires on May 20, 1998. Interest is payable
monthly until all principal has been repaid in full at the greater of Chemical
Bank or Citibank's prime rate minus 1.5% or LIBOR plus 1.5% (the 'Base Rate
Option'). The weighted average interest rate on the borrowings under this
agreement were 10.2%, 8.8% and 8.8% in 1994,
 
                                      F-12
<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
6. NOTES PAYABLE TO BANKS -- (CONTINUED)

1995 and 1996, respectively. Borrowings under this agreement are collateralized
by BI Claims and substantially all other remaining assets of MFC.
 
     In connection with the revolving credit agreement, MFC is obligated to pay
a commitment fee of 1/4% per annum on the average daily unused portion of the
revolving credit agreement. The commitment fee amounted to $91,000, $39,000 and
$42,000 in 1994, 1995, and 1996, respectively.

     Under the terms of the revolving credit agreement, the most restrictive
covenant is a minimum net worth requirement, as defined in the agreement.
 
     The MFC notes payable are personally guaranteed by two of the partners of
MFC.
 
(B) NOTES PAYABLE, SSC
 
     On August 25, 1995, SSC consummated a three-year, $20,000,000 revolving
credit and term loan agreement with a bank that is affiliated with one of the
Limited Partners of SSC. Through December 31, 1996, the agreement was amended
twice and the line increased to $75,000,000. Effective February 1997, the
revolving credit agreement was amended to reflect an increase to $105,000,000
and addition of another bank was added to the facility. Interest is payable
monthly on the average daily borrowings under the revolving credit agreement at
the greater of the lender's prime rate plus .5% or LIBOR plus 3.5%. Principal is
repaid as the underlying finance receivables are collected. The agreement
expires on August 25, 1998 and if not extended will convert to a term loan
arrangement subject to certain conditions. Borrowings under this agreement are
collateralized by structured settlements, lottery claims, and substantially all
other assets of SSC. The weighted average interest rate during 1995 and 1996 was
9.8% and 9.8%, respectively. At December 31, 1996, the interest rate on the
outstanding loan balance was 8.6%.
 
     In connection with the revolving credit agreement SSC is obligated to pay a
commitment fee of 1/2% per annum on the average daily unused portion of the
revolving credit agreement. This fee amounted to $15,000 in 1995 and $45,000 in
1996.
 
     Under the terms of the revolving credit agreement, the most restrictive
covenant relates to the payment of dividends or distribution of assets.
 
7. OPERATING LEASES
 
     The Company has commitments under long-term operating leases, principally
for building space which are for a five year term. The following summarizes
future minimum lease payments under non-cancelable operating leases.
 
                     DECEMBER 31, 1996
                     -----------------
                          (000's)

     1997.........        $   535
     1998.........            550
     1999.........            544
     2000.........            538
     2001.........            538
     Thereafter...            331
                         --------
                          $ 3,036
                         --------
                         --------

     Rent expense was approximately $133,000 in 1994, $135,000 in 1995 and
$195,000 in 1996.
 
                                      F-13
<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
8. GAIN ON SALE OF LOTTERY CLAIMS
 
     From time to time, SSC will enter into an agreement to sell lottery claims.
The sale of the lottery claims resulted in gains of $268,000 in 1995, $576,000
in 1996, and $135,000 at June 30, 1997, which is included in Gain on sale of
receivables in the accompanying Combined Financial Statements. The proceeds from
the sale of the lottery claims were used to pay down the Note Payable-SSC.
 
9. EXTRAORDINARY ITEM
 
     On March 29, 1995, MFC refinanced all of its outstanding notes payable. The
Company incurred an extraordinary loss in the amount of $876,000 as a result of
the refinancing which has been reported as a separate line item in the
accompanying Combined Statement of Operations. Deferred financing costs in the
amount of $456,000 were recorded as a loss on that date, as well as the
profit-sharing provision of the subordinated loan agreement which amounted to
$420,000.
 
10. FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     Statement of Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments, ('SFAS 107') as amended by Statement of
Financial Accounting Standards No. 119, Disclosure About Derivative Financial
Instruments and Fair Value of Financial Instruments, requires disclosure of the
estimated fair value of an entity's assets and liabilities considered to be
financial instruments. The majority of the combined assets and liabilities are
considered financial instruments as defined in SFAS 107. These amounts represent
estimates of fair value of financial instruments at a point-in-time. Significant
estimates using available market information and appropriate valuation
methodologies were used for the purposes of this disclosure. The estimates are
not necessarily indicative of the amounts the Company could realize in a current
market exchange, and the use of different market assumptions or methodologies
could have a material effect on the estimated fair value amounts.

                                 DECEMBER 31, 1995         DECEMBER 31, 1996
                               ----------------------    ----------------------
                               CARRYING    ESTIMATED     CARRYING    ESTIMATED
                                VALUE      FAIR VALUE     VALUE      FAIR VALUE
                               --------    ----------    --------    ----------
                                      (000's)                   (000's)
Assets:
  Cash and cash
    equivalents.............   $  1,509     $  1,509     $    102     $     102
  Finance receivables.......     60,104       60,104       90,930       104,038
Liabilities:
  Notes payable.............     56,907       56,907       91,858        91,858
 
     The Company using the following methods and assumptions to estimate fair
value of each class of financial instruments for which it is practicable to
estimate that value:
 
     Cash and Cash Equivalents:  The carrying value is a reasonable estimate of
fair value.
 
     Finance Receivables:  At December 31, 1995, the carrying amount in the
Combined Financial Statements approximates fair value because of the relatively
short period of time between the origination of the receivables and their
expected realization. At December 31, 1996, the fair value is based on the
discounted value of the expected future cash flows from the receivables, using a
discount rate that management believes is appropriate based on aggregate risk
factors.
 
     Notes Payable:  The carrying value is a reasonable estimate of fair value
due to the variable rate nature of existing SSC notes and the short-term nature
of the MFC notes.
 
11. COMMITMENTS AND CONTINGENCIES
 
     The Company currently maintains a contractual relationship with an
independent party whereby the party performs verification, quality control and
collection procedures with respect to finance receivables. The agreement for
lottery claims and other finance receivables will automatically renew for two
successive terms of three years each with subsequent terms of two years each,
unless terminated by either party to the contract.
 
                                      F-14
<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
11. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)

     In the normal course of business, the Company is subject to various legal
proceedings and claims, the resolution of which, in management's opinion, will
not have a material adverse effect on the combined financial position or the
results of operations of the Company.

12. RELATED PARTY TRANSACTIONS
 
     The Company has an agreement with Gemini Media, Inc. ('Gemini') in which
Gemini will provide marketing and advertising services to the Company. An
employee of the Company is the owner of Gemini. Fees paid to Gemini for
marketing services were $0, $0 and $2,362,000 for the years ended December 31,
1994, 1995, and 1996. At December 31, 1996 there was $500,000 of prepaid
expenses to Gemini included in other assets.
 
     The Company receives legal services from a law firm whose general partner
is a limited partner of SSC. Fees paid for legal services by the Company for the
years ended December 31, 1995 and 1996 were $5,000 and $70,000, respectively.
There were no accrued legal expenses for these services as of December 31, 1995
and 1996.
 
     An affiliate of ING Capital Corporation, a 25% owner of SSC, acts as a
lending institution for both MFC and SSC and acts as the private placement agent
in connection with SSC's securitization transactions for SSC. Both MFC and SSC
maintained revolving lines of credit with ING. Interest expense incurred on
Notes payable to banks by the Company for the years ended December 31, 1994,
1995 and 1996 were $1,541,000, $4,995,000, and $6,380,000, respectively. Accrued
interest expense was $51,000 and $476,000 as of December 31, 1995 and 1996.
Commitment fees paid on average daily unused lines of credit are disclosed in
Note 6. There were no bank fees paid or accrued for securitizations in 1994,
1995 and 1996. The Company paid ING a fee of $1,200,000 for the June 13, 1997
securitization.
 
     The Company performs management services for affiliated companies not
included in these combined financial statements. These fees amounted to $0, $0
and $139,000 in 1994, 1995 and 1996, respectively.
 
     In addition, the Company had noninterest bearing receivables from partners
in the amounts of $0 and $219,000 at December 31, 1995 and 1996, respectively.
$188,000 of the receivables were repaid in 1997.
 
13. EMPLOYEE BENEFIT PLAN
 
     The Company maintains a Savings Plan under section 401(k) of the Internal
Revenue Code (the 'Plan'). The Plan was established effective January 1, 1997
and covers substantially all employees of the Company. Under the plan
contributions are at the discretion of the Board of Directors. No contributions
have been made by the Company to the Plan.
 
14. RISKS AND UNCERTAINTIES
 
     The Company's finance receivable balances are primarily obligations of
insurance companies, state lottery divisions, and states and municipalities. The
Company's exposure to concentration of credit risk with respect to these
receivables is generally limited due to the large number of insurance companies
comprising the Company's receivable base, their dispersion across geographical
areas, and state insurance guarantee funds. As of June 30, 1997, two insurance
companies comprise approximately 10% of the total originations, respectively,
while three states represent in excess of 10% of the total originations,
respectively. The Company's exposure to credit loss in the event of non-

performance of these entities is represented by the finance receivable balance.
 
     The Company's earnings are dependent upon the level of net interest income
that is earned annually. Accordingly, the earnings are subject to risks and
uncertainties surrounding its exposure to changes in the interest rate
environment and ability to maintain sufficient effective yields in the future.
 
                                      F-15
<PAGE>
                      J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
14. RISKS AND UNCERTAINTIES -- (CONTINUED)

     The Company retains interest rate risk resulting from mismatches between
the fixed discount rates of finance receivables in relation to the variable rate
notes payable to a bank maturing or repricing within a given time period. An
increase in interest rates could significantly affect the Company's net interest
income.
 
     The Company is also subject to numerous risks associated with structured
settlements. The risks include, but are not limited to, restrictions on
assignability of structured settlements, a change in the U.S. tax law, diversion
by a seller of scheduled payments to the Company, insolvency of a seller or
insurance company, and other potential risks of regulation and/or legislation.
 
     The Company has and will continue to experience negative cash flow from
operations. As a result of its anticipated growth, the Company will remain
dependent on its credit facilities and access to the securitization markets.
 
     Significant estimates are made by management in determining the allowance
for credit losses, servicing assets, the fair value of securitized assets
retained and certain deferred acquisition costs. Consideration is given to a
variety of factors in establishing these estimates, including current economic
conditions, the results of internal review processes, delinquencies and the
results of internal time analysis. Since the allowance for credit losses is
dependent on general and other economic conditions beyond the Company's control,
it is at least reasonably possible that the estimates could differ materially
from currently reported values in the term.
 
15. SUBSEQUENT EVENTS (UNAUDITED)
 
     On September 12, 1997, the Company entered into a sale-leaseback of office
equipment. In connection with transaction this the Company received $1,619,000.
The lease has a term of 48 months.
 
     On September 30, 1997 and October 1, 1997, the Company sold approximately
$20,897,000 and $28,714,000, in carrying value of structured settlement finance
receivables that generated gain on sale of receivables of approximately
$6,833,000 and $8,020,000 respectively. Approximately 35% of the securitized
structured settlements were originated by the Company since June 30, 1997. The
Company plans to continue to perform servicing of these receivables for a fee.
The proceeds from the sale of the receivables were used to pay down the

revolving credit facility. The Company plans to continue to originate structured
settlement finance receivables.

     From July 1, 1997 through October 8, 1997, SSC, MFC, and JGW made partner
or stockholder distributions of $2,173,000, $221,000, and $70,000, respectively.
In addition, SSC intends to distribute an estimated additional $2,000,000 to its
partners in October 1997.
 
                                      F-16

<PAGE>
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY OF THE SELLING STOCKHOLDERS OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON
STOCK OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
 
UNTIL                   , 1997 ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                            ------------------------
 
                               TABLE OF CONTENTS
                                                                    PAGE
                                                                    -----
       Prospectus Summary..........................................     3
       Risk Factors................................................     8
       The Reorganization and Change in Tax Status.................    18
       Use of Proceeds.............................................    20
       Distributions and Dividend Policy...........................    20
       Capitalization..............................................    21
       Dilution....................................................    22
       Selected Combined Financial Data............................    23
       Management's Discussion and Analysis of Financial Condition
         and Results of Operations.................................    25
       Business....................................................    34
       Management..................................................    47
       Principal and Selling Stockholders..........................    52
       Certain Relationships and Related Party Transactions........    53
       Description of Capital Stock................................    56
       Shares Eligible for Future Sale.............................    58
       Underwriting................................................    59
       Legal Matters...............................................    60
       Experts.....................................................    60
       Additional Information......................................    61
       Annual and Quarterly Reports................................    61
       Index to Combined Financial Statements......................   F-1

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                5,286,738 Shares
 
                                    [LOGO]
 
                                 J.G. WENTWORTH
                                       &
                                 COMPANY, INC.
 
                                  Common Stock
 
                            ------------------------
                                   PROSPECTUS
                            ------------------------
 
                       PRUDENTIAL SECURITIES INCORPORATED
 
                            OPPENHEIMER & CO., INC.
 
                                  FURMAN SELZ
 
                                              , 1997
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

<PAGE>
                                    PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13.  Other Expenses of Issuance and Distribution.
 
     The following table sets forth expenses in connection with the issuance and
distribution of the securities being registered, all of which are being borne by
the Registrant.
 
Securities and Exchange Commission registration fee..............   $   29,477
National Association of Securities Dealers, Inc. fee.............       10,276
Nasdaq Stock Market Inc./National Market listing fee.............       50,000
Printing and engraving expenses..................................      200,000
Accountants' fees and expenses...................................      225,000
Legal fees and expenses..........................................      400,000
Blue Sky qualification fees and expenses.........................        8,000
Transfer agent's fees and expenses...............................       10,000
Director's and officer's insurance...............................       10,000
Miscellaneous....................................................       57,247
                                                                    ----------
     TOTAL.......................................................   $1,000,000
                                                                    ----------
                                                                    ----------
 
     The foregoing, except for the Securities and Exchange Commission
registration fee, the National Association of Securities Dealers, Inc. fee, and
the Nasdaq Stock Market fee are estimates.
 
ITEM 14.  Indemnification of Directors and Officers.
 
     Under Section 145 of the Delaware General Corporation Law, as amended, the
Registrant has the power to indemnify directors and officers under certain
prescribed circumstances and subject to certain limitations against certain
costs and expenses, including attorneys' fees actually and reasonably incurred
in connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which any of them is a party by reason of
his being a director or officer of the Registrant if it is determined that he
acted in accordance with the applicable standard of conduct set forth in such
statutory provision.
 
     Article VIII of the Registrant's Bylaws filed as Exhibit 32 hereby provides
indemnification to directors, officers and other agents of the Registrant
against all expenses, liability and loss incurred as a result of such person's
being a party to, or threatened to be made a party to, any action, suit or
proceeding by reason of the fact that he or she is or was a director or officer
of the Registrant or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another enterprise, to the fullest
extent authorized by the Delaware General Corporation Law. Article VIII further
permits the Registrant to maintain insurance, at its expense, to protect itself
and any such director or officer of the Registrant or another enterprise against
any such expenses, liability or loss, whether or not the Registrant would have
the power to indemnify such person against such expense, liability or loss under
the Delaware General Corporation Law. Amendments, repeals or modifications of

Article VIII can only be prospective and such changes require the affirmative
vote of not less than two-thirds of the outstanding shares of stock of the
Registrant entitled to vote in elections of directors.
 
     The Registrant intends to purchase directors' and officers' liability
insurance.
 
     See Article 7 of the Underwriting Agreement, filed as Exhibit 1 hereto,
pursuant to which the Underwriters agree to indemnify the Registrant, its
directors, officers and controlling persons against certain liabilities,
including liabilities under the Securities Act of 1933.
 
                                      II-1

<PAGE>
ITEM 15.  Recent Sales of Unregistered Securities.
 
     Immediately prior to the completion of the Offering, the Company will issue
to the Existing Stockholders 12,466,367 shares of Common Stock in exchange for
the contribution by the Existing Stockholders of their interests in the J.G.
Wentworth Affiliated Companies.
 
ITEM 16.  Exhibits and Financial Statement Schedules.
 
     (a) Exhibits
 
<TABLE>
<CAPTION>
EXHIBIT
NUMBER        DESCRIPTION
-------       ----------------------------------------------------------------------------------------------------
<S>     <C>
 *1      --   Form of Underwriting Agreement.
 *3.1    --   Certificate of Incorporation of the Company.
 *3.2    --   By-laws of the Company.
  5      --   Opinion of Wolf, Block, Schorr and Solis-Cohen LLP with respect to the legality of the securities
              being offered.
*10.1    --   1997 Stock Incentive Plan.
*10.2    --   Form of Employment Agreement by and between the Company and James D. Delaney.
*10.3    --   Form of Employment Agreement by and between the Company and Gary Veloric.
*10.4    --   Form of Employment Agreement by and between the Company and Michael B. Goodman.
*10.5    --   Employment Agreement by and between the Company and Andrew S. Hillman dated October 13, 1997.
*10.6    --   Form of Contribution Agreement among the Company and the Existing Stockholders.
*10.7    --   Form of Tax Indemnity Agreement among the Company, JGW, the General Partners and the Existing
              Stockholders.
*10.8    --   Amended and Restated Credit Agreement, by and between SSC, the Lenders listed therein and ING and a
              Bank, dated February 11, 1997.
*10.9    --   Credit Agreement among MFC, the MFC Funding, the Lenders listed therein and ING dated May 26, 1995.
*10.10   --   Master Trust Indenture and Security Agreement between J.G. Wentworth Receivables III LLC
              ('Receivables III'), JGW and a Bank dated as of September 30, 1997.
*10.11   --   Master Trust Indenture and Security Agreement, Series 1997-A Supplement between Receivables III, JGW
              and a Bank dated as of September 30, 1997.
*10.12   --   Purchase and Contribution Agreement between SSC and J.G. Wentworth Receivables II LLC ('Receivables
              II') dated as of September 30, 1997.
*10.13   --   Purchase and Contribution Agreement (Issuer-Purchase Agreement) between Receivables II and
              Receivables III dated as of September 30, 1997.
*10.14   --   Note Purchase Agreement between the Note Purchasers, named therein, and Receivables III dated as of
              September 30, 1997.
*10.15   --   Amended and Restated Collateral Trust and Intercreditor Agreement among ING, a Bank, as Servicing
              Agent, other Lender referred to therein, Receivables I, Receivables III, SSC, Receivables II and JGW
              dated as of September 30, 1997.
*10.16   --   Collateral Trust and Intercreditor Agreement among ING, a Bank, other Lender referred to therein,
              J.G. Wentworth Receivables I LLC ('Receivables I'), SSC and JGW dated as of June 13, 1997.
*10.17   --   Certificate Purchase Agreement among the Purchasers set forth therein, SSC Master Trust I ('Trust
              I'), Receivables I and a Bank dated as of June 13, 1997.
</TABLE>
                                      II-2

<PAGE>
<TABLE>
<CAPTION>
EXHIBIT
NUMBER        DESCRIPTION
-------       ----------------------------------------------------------------------------------------------------
<S>     <C>
*10.18   --   Purchase Agreement between SSC and Receivables I dated as of June 13, 1997.
*10.19   --   Pooling and Servicing Agreement, Series 1997-I Supplement, between Receivables I, JGW and a Bank
              dated as of June 13, 1997.
*10.20   --   Pooling and Servicing Agreement, Trust I, between Receivables I, JGW and a Bank dated as of June 13,
              1997.
 11      --   Statement regarding Computation of Per Share Earnings.
*23.1    --   Consent of Coopers & Lybrand L.L.P.
 23.2    --   Consent of Wolf, Block, Schorr and Solis-Cohen LLP (included as part of Exhibit 5).
*24      --   Power of Attorney (included on signature page of this Registration Statement).
*27      --   Financial Data Schedule
*99.1    --   Consent to be Named as a Proposed Director, for Gerard E. Bisbee, Jr.
*99.2    --   Consent to be Named as a Proposed Director, for Philip J. Kendall.
*99.3    --   Consent to be Named as a Proposed Director, for Anthony C. Salvo.
</TABLE>
------------------
  * Filed herewith
 
     (b) Financial Statement Schedules
 
     The following Schedules are filed with this Registration Statement.
 
ITEM 17.  Undertakings.
 
     The undersigned Registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
 
     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to Item 14 above, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
 
     The undersigned Registrant hereby undertakes that:
 
          (1) For purposes of determining any liability under the Securities Act

     of 1933, the information omitted from the form of prospectus filed as part
     of this registration statement in reliance upon Rule 430A and contained in
     a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
     (4) or 497(h) under the Securities Act shall be deemed to be part of this
     registration statement as of the time it was declared effective.
 
          (2) For the purpose of determining any liability under the Securities
     Act of 1933, each post-effective amendment that contains a form of
     prospectus shall be deemed to be a new registration statement relating to
     the securities offered therein, and the offering of such securities at that
     time shall be deemed to be the initial bona fide offering thereof.
 
------------------
     All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable or the required
information is given in the Combined Financial Statements of the J.G. Wentworth
Affiliated Companies or the Notes thereto, and therefore have been omitted.
 
                                      II-3

<PAGE>
                                   SIGNATURES
 
     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Philadelphia, Pennsylvania on the
13th day of October, 1997.
 
                                       J.G. WENTWORTH & COMPANY, INC.
 
                                       By: /s/ James D. Delaney
                                           -------------------------------------
                                           James D. Delaney
                                           President and Chief Executive Officer
 
                               POWER OF ATTORNEY
 
     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James D. Delaney and Gary Veloric, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection herewith, with authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes, may
lawfully do or cause to be done by virtue thereof.
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
 
          SIGNATURE                         TITLE                     DATE
------------------------------   ----------------------------   ----------------
 
       /s/ Gary Veloric          Chairman of the Board of       October 13, 1997
------------------------------   Directors
         Gary Veloric
 
      /s/ James D. Delaney       President, Chief Executive     October 13, 1997
------------------------------   Officer and Director
       James D. Delaney          (principal executive
                                 officer)
 
    /s/ James J. O'Malley        Vice President and Chief       October 13, 1997
------------------------------   Financial Officer (principal
      James J. O'Malley          financial and accounting
                                 officer)
 
    /s/ Michael B. Goodman       Executive Vice President,      October 13, 1997
------------------------------   Chief Operating Officer and
      Michael B. Goodman         Director

     /s/ Edward S. Stone         Director                       October 13, 1997
------------------------------
       Edward S. Stone
 
                                      II-4

<PAGE>
                               INDEX TO EXHIBITS

<TABLE>
<CAPTION>
EXHIBIT                                                                                                                 SEQUENTIAL
NUMBER        DESCRIPTION                                                                                                 PAGE NO.
-------       ----------------------------------------------------------------------------------------------------      -----------
<S>     <C>
 *1      --   Form of Underwriting Agreement.
 *3.1    --   Certificate of Incorporation of the Company.
 *3.2    --   By-laws of the Company.
  5      --   Opinion of Wolf, Block, Schorr and Solis-Cohen LLP with respect to the legality of the securities
              being offered.
*10.1    --   1997 Stock Incentive Plan.
*10.2    --   Form of Employment Agreement by and between the Company and James D. Delaney.
*10.3    --   Form of Employment Agreement by and between the Company and Gary Veloric.
*10.4    --   Form of Employment Agreement by and between the Company and Michael B. Goodman.
*10.5    --   Employment Agreement by and between the Company and Andrew S. Hillman dated October 13, 1997.
*10.6    --   Form of Contribution Agreement among the Company and the Existing Stockholders.
*10.7    --   Form of Tax Indemnity Agreement among the Company, JGW, the General Partners and the Existing
              Stockholders.
*10.8    --   Amended and Restated Credit Agreement, by and between SSC, the Lenders listed therein and ING and a
              Bank, dated February 11, 1997.
*10.9    --   Credit Agreement among MFC, the MFC Funding, the Lenders listed therein and ING dated May 26, 1995.
*10.10   --   Master Trust Indenture and Security Agreement between J.G. Wentworth Receivables III LLC
              ('Receivables III'), JGW and a Bank dated as of September 30, 1997.
*10.11   --   Master Trust Indenture and Security Agreement, Series 1997-A Supplement between Receivables III, JGW
              and a Bank dated as of September 30, 1997.
*10.12   --   Purchase and Contribution Agreement between SSC and J.G. Wentworth Receivables II LLC ('Receivables
              II') dated as of September 30, 1997.
*10.13   --   Purchase and Contribution Agreement (Issuer-Purchase Agreement) between Receivables II and
              Receivables III dated as of September 30, 1997.
*10.14   --   Note Purchase Agreement between the Note Purchasers, named therein, and Receivables III dated as of
              September 30, 1997.
*10.15   --   Amended and Restated Collateral Trust and Intercreditor Agreement among ING, a Bank, as Servicing
              Agent, other Lender referred to therein, Receivables I, Receivables III, SSC, Receivables II and JGW
              dated as of September 30, 1997.
*10.16   --   Collateral Trust and Intercreditor Agreement among ING, a Bank, other Lender referred to therein,
              J.G. Wentworth Receivables I LLC ('Receivables I'), SSC and JGW dated as of June 13, 1997.
*10.17   --   Certificate Purchase Agreement among the Purchasers set forth therein, SSC Master Trust I ('Trust
              I'), Receivables I and a Bank dated as of June 13, 1997.
*10.18   --   Purchase Agreement between SSC and Receivables I dated as of June 13, 1997.
*10.19   --   Pooling and Servicing Agreement, Series 1997-I Supplement, between Receivables I, JGW and a Bank
              dated as of June 13, 1997.
*10.20   --   Pooling and Servicing Agreement, Trust I, between Receivables I, JGW and a Bank dated as of June 13,
              1997.
 11      --   Statement regarding Computation of Per Share Earnings.
*23.1    --   Consent of Coopers & Lybrand L.L.P.
 23.2    --   Consent of Wolf, Block, Schorr and Solis-Cohen LLP (included as part of Exhibit 5).
*24      --   Power of Attorney (included on signature page of this Registration Statement).

*27      --   Financial Data Schedule
*99.1    --   Consent to be Named as a Proposed Director, for Gerard E. Bisbee, Jr.
*99.2    --   Consent to be Named as a Proposed Director, for Philip J. Kendall.
*99.3    --   Consent to be Named as a Proposed Director, for Anthony C. Salvo.
</TABLE>
------------------
  * Filed herewith
[{"type": "S-1", "sequence": "1", "description": "REGISTRATION STATEMENT", "secsgml_size_bytes": 350218}]
{"company-data": {"conformed-name": "WENTWORTH J G & CO INC", "cik": "0001047706", "assigned-sic": ""}, "filing-values": {"form-type": "S-1", "act": "33", "file-number": "333-37891", "film-number": "97695586"}, "business-address": {"street1": "GRAHAM BUILDING 10TH FL", "street2": "15TH & RANSTEAD STREETS", "city": "PHILADELPHIA", "state": "PA", "zip": "19102", "phone": "2155677660"}, "mail-address": {"street1": "GRAHAM BUILDING 10TH FL", "street2": "15TH & RANSTEAD STREETS", "city": "PHILADELPHIA", "state": "PA", "zip": "19102"}}
AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON OCTOBER 14, 1997

                                                   REGISTRATION NO. 333-________
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                       SECURITIES AND EXCHANGE COMMISSION
                             WASHINGTON, D.C. 20549

                          ---------------------------
 
                                    FORM S-1
                             REGISTRATION STATEMENT
                                     UNDER
                           THE SECURITIES ACT OF 1933

                          ---------------------------
 
                         J.G. WENTWORTH & COMPANY, INC.
             (Exact name of registrant as specified in its charter)

                          ---------------------------
 
         DELAWARE                     6162                   23-2927741
      (State or other          (Primary Standard          (I.R.S. Employer
      jurisdiction of              Industrial            Identification No.)
     incorporation or         Classification Code
       organization)                Number)
 
                              THE GRAHAM BUILDING
                           15TH AND RANSTEAD STREETS
                                   10TH FLOOR
                             PHILADELPHIA, PA 19102
                                 (215) 567-7660
              (Address, including zip code, and telephone number,
       including area code, of registrant's principal executive offices)

                          ---------------------------
 
                                JAMES D. DELANEY
                     PRESIDENT AND CHIEF EXECUTIVE OFFICER
                         J.G. WENTWORTH & COMPANY, INC.
                              THE GRAHAM BUILDING
                           15TH AND RANSTEAD STREETS
                                   10TH FLOOR
                             PHILADELPHIA, PA 19102
                                 (215) 567-7660
           (Name, address, including zip code, and telephone number,
                   including area code, of agent for service)

                          ---------------------------

                                With copies to:
 
         JASON M. SHARGEL, ESQ.                 JAMES R. TANENBAUM, ESQ.
       RICHARD P. PASQUIER, ESQ.             STROOCK & STROOCK & LAVAN LLP
WOLF, BLOCK, SCHORR AND SOLIS-COHEN LLP             180 MAIDEN LANE
     TWELFTH FLOOR PACKARD BUILDING             NEW YORK, NY 10038-4982
         111 SOUTH 15TH STREET                       (212) 806-5400
      PHILADELPHIA, PA 19102-2678
             (215) 977-2000
 
    APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE OF THE SECURITIES TO THE
PUBLIC:  As promptly as practicable after the effective date of this
Registration Statement.
 
    If the securities being registered on this Form are to be offered on a
delayed or continuous basis pursuant to Rule 415 under the Securities Act of
1933, check the following box. / /
 
    If this Form is filed to register additional securities for an offering
pursuant to Rule 462(b) under the Securities Act, please check the following box
and list the Securities Act registration statement number of the earlier
effective registration statement for the same offering. / /
 
    If this Form is a post-effective amendment filed pursuant to Rule 462(c)
under the Securities Act, check the following box and list the Securities Act
registration statement number of the earlier effective registration statement
for the same offering. / /
 
    If delivery of the prospectus is expected to be made pursuant to Rule 434,
please check the following box. / /
                          ---------------------------
 
                        CALCULATION OF REGISTRATION FEE
PROPOSED           PROPOSED
                                                 AMOUNT          MAXIMUM            MAXIMUM          AMOUNT OF
    TITLE OF EACH CLASS OF SECURITIES            TO BE        OFFERING PRICE       AGGREGATE        REGISTRATION
             TO BE REGISTERED                REGISTERED (1)   PER SHARE (2)    OFFERING PRICE (2)       FEE
    ---------------------------------        --------------   --------------   ------------------   ------------
Common Stock,
  $.01 par value..........................     6,079,749          $16.00          $97,275,984        $29,477.57
------------ 
(1) Includes 793,011 shares which the Underwriters have a right to purchase to
    cover over-allotments, if any.

(2) Estimated pursuant to Rule 457 solely for the purpose of calculating the
    registration fee.

                          ---------------------------

    THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE COMMISSION, ACTING PURSUANT TO SAID SECTION 8(A),
MAY DETERMINE.

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
Information contained herein is subject to completion or amendment. A
registration statement relating to these securities has been filed with the
Securities and Exchange Commission. These securities may not be sold nor may
offers to buy be accepted prior to the time the registration statement becomes
effective.  This prospectus shall not constitute an offer to sell or the
solicitation of an offer to buy nor shall there be any sales of these securities
in any State in which such offer, solicitation or sale would be unlawful prior
to registration or qualification under the securities laws of any such State.

                SUBJECT TO COMPLETION -- DATED OCTOBER 14, 1997
PROSPECTUS
--------------------------------------------------------------------------------
 
                                5,286,738 Shares
 
[LOGO]                   J.G. WENTWORTH & COMPANY, INC.
 
                                  Common Stock
 
--------------------------------------------------------------------------------
 
Of the shares of Common Stock, par value $.01 per share (the 'Common Stock'),
offered hereby (the 'Offering'), 4,000,000 shares are being sold by J.G.
Wentworth & Company, Inc. (the 'Company') and 1,286,738 shares are being sold by
certain selling stockholders (the 'Selling Stockholders'). The Company will not
receive any of the proceeds from the sale of shares by the Selling Stockholders.
See 'Principal and Selling Stockholders.'
 
Prior to the Offering, there has been no public market for the Common Stock of
the Company. It is currently anticipated that the initial public offering price
per share will be between $14.00 and $16.00. See 'Underwriting' for a discussion
of the factors to be considered in determining the initial public offering
price. Application has been made to have the Common Stock approved for inclusion
in The Nasdaq Stock Market's National Market (the 'Nasdaq National Market')
under the symbol 'JGWC.'
 
SEE 'RISK FACTORS' ON PAGES 8 TO 17 FOR A DISCUSSION OF CERTAIN MATERIAL FACTORS
THAT SHOULD BE CONSIDERED IN CONNECTION WITH AN INVESTMENT IN THE COMMON STOCK
OFFERED HEREBY.
 
--------------------------------------------------------------------------------
 
 THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
      EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
          SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
            COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS
         PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
                                   OFFENSE.

                                 Underwriting                      Proceeds to
                  Price to      Discounts and     Proceeds to        Selling
                   Public       Commissions(1)     Company(2)      Stockholders
               --------------   --------------   --------------   --------------
Per Share....        $                $                $                $
Total(3).....   $                $                $                $

------------------
(1) The Company and the Selling Stockholders have agreed to indemnify the
    several Underwriters against certain liabilities, including liabilities
    under the Securities Act of 1933. See 'Underwriting.'
 
(2) Before deducting expenses payable by the Company estimated to be $1 million.
 
(3) The Selling Stockholders have granted the Underwriters a 30-day
    over-allotment option to purchase up to 793,011 additional shares of Common
    Stock on the same terms and conditions as set forth above. If all such
    additional shares are purchased by the Underwriters, the total Price to
    Public will be $        , the total Underwriting Discounts and Commissions
    will be $        , the total Proceeds to Company will be $        and the
    total Proceeds to Selling Stockholders will be $        . See
    'Underwriting.'
--------------------------------------------------------------------------------
 
The shares of Common Stock are offered by the several Underwriters subject to
delivery by the Company and the Selling Stockholders and acceptance by the
Underwriters, to prior sale and to withdrawal, cancellation or modification of
the offer without notice. Delivery of the shares to the Underwriters is expected
to be made at the office of Prudential Securities Incorporated, One New York
Plaza, New York, New York, on or about         , 1997.
 
PRUDENTIAL SECURITIES INCORPORATED
                                        OPPENHEIMER & CO., INC.
                                                                     FURMAN SELZ
 
             , 1997
CERTAIN PERSONS PARTICIPATING IN THE OFFERING MAY ENGAGE IN TRANSACTIONS
THAT STABILIZE, MAINTAIN, OR OTHERWISE AFFECT THE PRICE OF THE COMMON STOCK,
INCLUDING PURCHASES OF COMMON STOCK TO STABILIZE ITS MARKET PRICE, PURCHASES OF
COMMON STOCK TO COVER SOME OR ALL OF A SHORT POSITION IN THE COMMON STOCK
MAINTAINED BY THE UNDERWRITERS AND THE IMPOSITION OF PENALTY BIDS. FOR A
DESCRIPTION OF THESE ACTIVITIES, SEE 'UNDERWRITING.'
 
                                       2
PROSPECTUS SUMMARY
 
     The following summary is qualified in its entirety by, and should be read
in conjunction with, the more detailed information and the Combined Financial
Statements of the J.G. Wentworth Affiliated Companies and the Notes thereto
appearing elsewhere in this Prospectus. Except as otherwise indicated, all
information in this Prospectus gives effect to the following transactions which
will occur on or before completion of the Offering (collectively, the
'Reorganization') pursuant to which: (i) the limited partners of J.G. Wentworth
MFC Associates, L.P., a Delaware limited partnership ('MFC'), and J.G. Wentworth
S.S.C. Limited Partnership, a Delaware limited partnership ('SSC' and,
collectively with MFC, the 'Partnerships'), will contribute all of their limited
partnership interests in the Partnerships to the Company; (ii) the shareholders
of J.G. Wentworth Funding Corp., a Pennsylvania corporation ('MFC Funding'), and
J.G. Wentworth Structured Settlement Funding Corporation, a Delaware corporation
('SSC Funding'), the respective general partners of the Partnerships
(collectively, the 'General Partners'), will contribute all of the capital stock
of the General Partners to the Company; and (iii) the shareholders of J.G.
Wentworth & Company, Inc., a Pennsylvania corporation ('JGW'), and SSC
Management Company, Inc., a Pennsylvania corporation ('SCC Management' and,
together with JGW, the Partnerships and the General Partners, the 'J.G.
Wentworth Affiliated Companies'), will contribute all of the capital stock of
JGW to the Company; each in exchange for the issuance by the Company of shares
of Common Stock. See 'The Reorganization and Change in Tax Status' and the
Combined Financial Statements of the J.G. Wentworth Affiliated Companies and the
Notes thereto. Unless the context otherwise requires, (a) all references herein
to the 'Company' refer to the J.G. Wentworth Affiliated Companies on a combined
basis, (b) all references herein to the Company's activities, financial
condition or results of operations refer to those of the J.G. Wentworth
Affiliated Companies, taken as a whole and (c) all information in this
Prospectus assumes that the Underwriters' over-allotment option will not be
exercised.
 
                                  THE COMPANY
 
     The Company is a specialty finance company that originates, securitizes and
services rights to receive payments from structured settlements and other
deferred payment obligations. Deferred payment obligations are contractual
arrangements under which one party has agreed to make fixed, scheduled payments
to another party over time to satisfy an obligation that would otherwise be paid
in an up-front, lump sum. The Company specializes in transactions involving two
types of deferred payment obligations: (i) structured settlements arising from
personal injury litigation as to which highly-rated insurance companies are the
obligor, and, to a lesser extent, (ii) other deferred payment obligations such
as claims arising from personal injury litigation and state-operated lotteries
as to which governmental or quasi-governmental entities are the obligor.

     According to industry sources, in excess of $40 billion of annuity premiums
paid to third parties to fund structured settlements were generated from 1980 to
1995 and approximately $4 billion to $5 billion in new structured settlements
are generated each year in the United States. Structured settlements continue to
be an attractive option for claimants and insurance companies because structured
settlements: (i) offer favorable tax treatment; (ii) permit payment flexibility
and incorporation of investment management features; and (iii) lower the cost of
compensating victims and thereby help foster timely settlement of litigation.
From the claimants' point of view, however, structured settlements have a
significant weakness, inflexibility. When claimants' financial needs change, the
fixed payment schedule of a structured settlement may no longer satisfy these
needs. The Company's funding programs offer those claimants the ability to
convert their rights to future payments into cash that they can use for such
purposes as paying medical or tuition expenses, purchasing or improving a home,
starting a business or repaying debt.
 
     The Company has achieved significant growth in the number and maturity
value of receivables purchased since commencing operations. From inception to
June 30, 1997, the Company has purchased 14,022 deferred payment obligation
receivables with an aggregate maturity value of $374.8 million.
 
                                       3
Maturity value equals the sum of all future payments to be received under a
deferred payment obligation. The Company has generally purchased receivables at
a significant discount from maturity value. The difference between the amount
paid by the Company and the maturity value of the receivables is accrued as
income over the life of the receivable. The weighted average yield of the
Company's portfolio was 22.5% for the six months ended June 30, 1997. The
Company's revenues have increased significantly as the Company's originations
volume and portfolio have grown and the Company has employed securitizations to
fund its operations. Revenues increased from $249,000 in 1992 to $11.8 million
in 1996 and $20.5 million in the six months ended June 30, 1997.
 
     In June 1997, the Company completed a $70.8 million securitization in what
it believes is the first investment grade rated securitization of structured
settlement receivables. The Company sold, through a special purpose entity,
$59.5 million of senior pass-through certificates rated 'A2' by Moody's
Investors Service, Inc. ('Moody's') and 'A' by Duff & Phelps Credit Rating Co.
('Duff & Phelps'). The Company retained $11.3 million in face value of unrated
subordinated certificates and recorded a Gain on Sale (as defined herein) of
$11.3 million for the six months ended June 30, 1997. The Company completed a
securitization transaction in which it sold $31.0 million of receivables in
September 1997 and $41.0 million of receivables in October 1997, and recorded a
Gain on Sale of $6.8 million and $8.0 million, respectively. Structured
settlement receivables and other deferred payment obligations differ from other
regularly securitized financial assets, such as consumer credit cards and
mortgage loans, in that (i) prepayment risk is minimal because the timing of
scheduled payments is fixed and (ii) credit risks are low because obligors are
typically insurance companies that have received a credit rating of 'A' or
better from A.M. Best or are governmental entities. From inception through
December 31, 1996, the Company had not charged-off any receivables. For the six
months ended June 30, 1997, the Company recorded a net charge-off of 0.7% of the
Company's average owned portfolio.

     The Company does not rely on brokers to originate structured settlements
and other deferred payment receivables and its policies prohibit the 'cold
calling' of prospective customers. Instead, the Company utilizes a nationwide
television advertising campaign to identify hard-to-find claimants who want to
sell their payment rights to the Company. Using a 21,520-square-foot call
center, the Company's originations staff responds to claimant inquiries,
attempts to quantify an individual claimant's financial needs and endeavors to
structure the funding transaction to meet those needs. The Company's policies
prohibit the origination of receivables from minors and incompetent persons.
 
     The Company's growth strategy is to increase its originations of deferred
payment receivables and profitability by further enhancing its position as the
leading originator of the rights to receive payments from structured settlements
and other deferred payment obligations. To achieve its goals for profitable
growth, the Company intends to continue to: (i) increase retail originations
through its nationwide targeted television advertising campaign; (ii) provide
quality customer service by continuing to qualify and structure transactions
based on the needs of the claimant through the Company's trained marketing,
underwriting and servicing personnel; (iii) maintain stringent underwriting
standards to minimize the risks of claimant fraud; (iv) market to referral
sources such as attorneys and bankruptcy and estate trustees; (v) obtain
institutional financing and complete regular securitizations of its receivables;
(vi) maintain its state-of-the-art information management systems; and (vii)
expand into new deferred payment market niches through internal growth and
possible acquisitions.
 
     The Company was formed in October 1997 in connection with the
Reorganization as a successor to the businesses of the J.G. Wentworth Affiliated
Companies. See 'The Reorganization and Change in Tax Status.' JGW was formed by
James D. Delaney and Gary Veloric in 1991 as a merchant bank specializing in
transactions in the healthcare industry. In 1992, the Company entered the
business of purchasing the deferred settlement obligations of the New Jersey
Full Insurance Joint Underwriting Association ('JUA'), and its successor, the
New Jersey Market Transition Facility ('MTF'). As the Company's success in the
JUA/MTF market established its reputation as a creative funding source, it began
to search for other opportunities to purchase income streams that, while secure
and predictable, did not meet the requirements for more traditional means of
financing. After evaluating a number of market possibilities, the Company
decided in 1995 to enter the secondary market for structured
 
                                       4
settlements. By using the capabilities and systems it developed for the JUA/MTF
business, the Company emerged as a market leader in the business of purchasing
structured settlements. In May 1995, ING (U.S.) Capital Corporation (together
with its affiliates, 'ING') extended a credit facility to the Company to fund
its originations of other deferred payment obligations. In August 1995, the
Company and ING expanded their relationship to include funding the acquisition
of structured settlement receivables, at which time ING became a stockholder of
the Company.
 
     The Company's principal executive office is located at The Graham Building,
15th and Ranstead Streets, 10th Floor, Philadelphia, PA 19102, and its telephone
number is (215) 567-7660.

                                  THE OFFERING
 
Common Stock Offered by the         4,000,000 shares (1)
  Company..........................
 
Common Stock Offered by the Selling 1,286,738 shares (1)
  Stockholders.....................
 
Common Stock to be Outstanding      16,466,667 shares (2)
  after the Offering...............
 
Use of Proceeds.................... To pay a cash tax distribution to certain of
                                    the Company's stockholders, to pay down
                                    outstanding amounts on the Credit Facilities
                                    (as defined herein) and for other general
                                    corporate purposes. See 'The Reorganization
                                    and Change in Tax Status' and 'Use of
                                    Proceeds.'
 
Proposed Nasdaq National Market     JGWC
  symbol...........................
 
------------------
(1) Assumes that the Underwriters' over-allotment option to purchase 793,011
    shares from the Selling Stockholders will not be exercised.
 
(2) Does not include 650,000 shares issuable upon exercise of stock options to
    be granted to employees and directors upon the completion of the Offering
    with an exercise price equal to the initial public offering price.
 
                                  RISK FACTORS
 
     Investors should consider the material risk factors involved in connection
with an investment in the Common Stock and the impact to investors from various
events which could adversely affect the Company's business. See 'Risk Factors.'
 
                                       5
SUMMARY COMBINED FINANCIAL DATA
 
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     The following summary combined financial information should be read in
conjunction with the Combined Financial Statements of the J.G. Wentworth
Affiliated Companies and the Notes thereto, 'Selected Combined Financial Data'
and 'Management's Discussion and Analysis of Financial Condition and Results of
Operations' included elsewhere in this Prospectus. The following table also
includes certain unaudited pro forma combined statement of operations data for
the year ended December 31, 1996 and the six months ended June 30, 1997, which
give effect to the Reorganization, the Offering and certain other adjustments as
if they had occurred on June 30, 1997. The unaudited operating data has been
derived from management records for all periods presented.
SIX MONTHS ENDED
                                                      YEAR ENDED DECEMBER 31,                                  JUNE 30,
                                -------------------------------------------------------------------    -------------------------
                                   1992          1993          1994          1995          1996           1996          1997
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
                                (UNAUDITED)   (UNAUDITED)                                              (UNAUDITED)   (UNAUDITED)
INCOME STATEMENT DATA:
Revenues:
  Interest income.............     $  --        $   389       $ 2,755       $ 8,560     $    10,426      $ 5,601     $     8,743
  Gain on sale of
    receivables...............        --             --            --           268             576           --          11,419
  Other income................       249          1,008           417           894             785          319             386
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
    Total revenues............       249          1,397         3,172         9,722          11,787        5,920          20,548
    Total expenses............       256          1,322         3,248         8,078          15,862        7,280          14,279
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
Income (loss) before
  extraordinary loss..........        (7)            75           (76)        1,644          (4,075)      (1,360)          6,269
Extraordinary loss............        --             --            --           876              --           --              --
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
Net income (loss).............     $  (7)       $    75       $   (76)      $   768     $    (4,075)     $(1,360)    $     6,269
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------
                                   -----      -----------   -----------   -----------   -----------    -----------   -----------

UNAUDITED PRO FORMA
 INFORMATION:
Pro forma (benefit) provision
  for income taxes (1)........                                                               (1,508)                       2,320
                                                                                        -----------                  -----------
Pro forma net income (loss)
  (1).........................                                                          $    (2,567)                 $     3,949
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
PER SHARE DATA:
Pro forma net income (loss)
  per share (1)(2)............                                                          $     (0.20)                 $      0.31
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
Pro forma number of shares
  outstanding (1)(2)..........                                                           12,549,134                   12,549,134
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
JUNE 30, 1997
                                 --------------------------
                                               PRO FORMA
                                 ACTUAL     AS ADJUSTED (3)
                                 -------    ---------------
                                        (UNAUDITED)
BALANCE SHEET DATA:
Finance receivables...........   $71,757       $  71,757
Retained interests............     5,219           5,219
Servicing asset...............       890             890
Total assets..................    81,445          81,445
Notes payable, banks..........    75,165          21,571
Deferred tax liability........        --           6,220
Total liabilities.............    82,135          34,741
Total equity (deficit)........      (690)         46,704
6
SIX MONTHS ENDED
                                                        YEAR ENDED DECEMBER 31,                       JUNE 30,
                                           --------------------------------------------------    -------------------
                                            1992      1993      1994       1995        1996       1996        1997
                                           ------    ------    -------    -------    --------    -------    --------
UNAUDITED OPERATING DATA:
Portfolio Owned and Serviced:
  Maturity value........................   $   14    $3,839    $38,799    $74,820    $166,061    $82,377    $245,337
  Carrying value........................   $   12    $3,221    $33,778    $60,104    $ 90,930    $71,255    $142,394
Weighted average yield..................     29.7%     26.2%      18.0%      14.0%       20.2%      17.4%       22.4%
Allowance for credit losses.............       --        --         --         --    $    500    $   165    $  1,630
Allowance for credit losses as a
  percentage of average portfolio
  owned.................................       --        --         --         --         0.8%       0.2%        2.3%
Net charge-offs.........................       --        --         --         --          --         --    $    610
Net charge-offs as a percentage of
  average portfolio owned...............       --        --         --         --          --         --         0.6%
Structured Settlements:
  Total number of receivables
    originated..........................       --        --         --        136       2,197        577       2,219
  Cost of receivables originated........       --        --         --    $ 4,916    $ 56,004    $17,762    $ 48,889
  Maturity value of receivables
    originated..........................       --        --         --    $13,674    $125,697    $41,242    $103,239
  Weighted average yield................       --        --         --       20.5%       22.3%      20.7%       23.2%
  Weighted average maturity (in
    years)..............................       --        --         --        9.1         6.5        7.6         6.1
  Total number of defaulted
    receivables.........................       --        --         --          2          34          6          71
  Total number of defaulted payments....       --        --         --          4         146         33         321
  Carrying amount of defaulted
    payments............................       --        --         --    $     7    $    200    $    39    $    334
  Carrying value of defaulted
    receivables.........................       --        --         --    $    40    $  1,313    $   151    $  3,280
  Percentage of defaulted receivables...       --        --         --        0.8%        2.2%       0.7%        3.1%
  Net charge-offs.......................       --        --         --         --          --         --    $    610
  Net charge-offs as a percentage of
    portfolio owned.....................       --        --         --         --          --         --         0.7%

Other Deferred Payment Obligations:
  Total number of receivables
    originated..........................        1       475      2,637      4,610       1,409        919         354
  Cost of receivables originated........   $   12    $1,427    $31,854    $53,213    $ 17,052    $12,280    $  4,192
  Maturity value of receivables
    originated..........................   $   14    $1,871    $38,745    $62,851    $ 19,738    $14,217    $  4,905
  Weighted average yield................     29.7%     26.2%      18.1%      14.1%       13.2%      12.7%       13.5%
  Weighted average maturity (in
    years)..............................      0.5       1.1        1.2        1.3         1.2        1.3         1.2
  Total number of delinquent
    receivables.........................       --        --         --         13          20         16          10
  Carrying value of delinquent
    receivables.........................       --        --         --    $   133    $    197    $   127    $     63
  Delinquent receivables as a percentage
    of average portfolio................       --        --         --        0.3%        0.7%       0.3%        0.4%
  Net charge-offs.......................       --        --         --         --          --         --          --
------------------
(1) Prior to the Reorganization, JGW and the General Partners were treated as S
    corporations under Subchapter S of the Internal Revenue Code of 1986 (the
    'Code') and applicable state law. The pro forma presentation reflects the
    provision for income taxes as if JGW and the General Partners had always
    been C corporations and the activities of the Partnerships had always been
    taxed as if owned by the Company at an assumed effective tax rate of 37%.
 
(2) Pro forma net income (loss) per share is computed based on 12,466,667 shares
    of Common Stock outstanding before the Offering and gives effect to the
    Reorganization and reflects the 82,467 shares of Common Stock which would
    need to be issued to generate the cash necessary to fund the Tax
    Distribution (as defined herein) at an assumed initial public offering price
    of $15.00 per share (the mid-point of the price range set forth on the cover
    page of this Prospectus). See 'The Reorganization and Change in Tax Status.'
 
(3) Adjusted to reflect (i) the conversion of JGW and the General Partners to C
    corporations and (ii) the sale of 4,000,000 shares of Common Stock offered
    hereby at an assumed initial public offering price of $15.00 per share (the
    mid-point of the price range set forth on the cover page of this Prospectus)
    after deducting underwriting discounts and commissions and estimated
    offering expenses payable by the Company. See 'The Reorganization and Change
    in Tax Status.'
 
                                       7
RISK FACTORS
 
     An investment in the shares of Common Stock involves a high degree of risk.
Prospective investors should carefully consider the following risk factors, in
addition to the other information set forth in this Prospectus, in connection
with the investment in the shares of Common Stock.
 
     When used in this Prospectus, the words 'may,' 'will,' 'expect,'
'anticipate,' 'continue,' 'estimate,' 'project,' 'intend,' and similar
expressions are intended to identify forward-looking statements regarding
events, conditions and financial trends that may affect the Company's future
plans of operations, business strategy, results of operations and financial
position. Prospective investors are cautioned that any forward-looking
statements are not guarantees of future performance and are subject to risks and
uncertainties and that actual results may differ materially from those included
within the forward-looking statements as a result of various factors. Factors
that could cause or contribute to such differences include, but are not limited
to, those described below, and under the heading 'Management's Discussion and
Analysis of Financial Condition and Results of Operations' and elsewhere in this
Prospectus.
 
     CAPITAL NEEDS AND ACCESS TO CAPITAL MARKETS
 
     History of Negative Cash Flow.  The Company has operated, and expects to
continue to operate, on a negative operating cash flow basis, and the level of
negative operating cash flow is expected to increase as the volume of the
Company's originations of deferred payment obligations and other receivables
increases. The Company incurs significant expenses in connection with its
originations and does not receive cash from receivables until scheduled payments
are received or its receivables are sold. The Company's primary operating cash
requirements include the funding of (i) originations of deferred payment
obligations and other receivables, (ii) reserve accounts, over-collateralization
requirements, fees and expenses incurred in connection with its securitizations,
(iii) interest expense due under various financing arrangements, (iv)
television, radio and direct mail advertising and other marketing expenses, (v)
administrative and other operating expenses and (vi) working capital
requirements. The Company has historically funded its operations principally
through borrowings from financial institutions, payments on receivables and
securitizations. For the six months ended June 30, 1997, the Company used $9.7
million more than it generated through its operations.
 
     Dependence on Credit Facilities.  The Company depends on credit facilities
with financial institutions to finance the purchase of deferred payment
obligations and other receivables pending securitization. The Company currently
has a $105 million Revolving Credit Facility with ING and a bank (the 'SSC
Facility') and a $20.0 million Credit Facility with ING and a bank (the 'MFC
Facility' and together with the SSC Facility, the 'Credit Facilities') of which
$28.3 million and $12.3 million were outstanding at October 3, 1997,
respectively. The SSC Facility expires on August 25, 1998 and the MFC Facility
expires on May 20, 1998. To finance its growth, the Company intends to seek
additional financing, whether by increasing the amounts available pursuant to
the Credit Facilities or otherwise. There can be no assurance, however, that
such financing will be available to the Company on favorable terms or at all.

The inability of the Company to arrange new financing capacity or to extend the
term of the Credit Facilities when they expire would have a material adverse
effect on the Company's financial condition and results of operations. Continued
availability of the Credit Facilities is subject to, among other things,
continued compliance by the Company with various representations and covenants
included within the applicable loan documents and the absence of an occurrence
of any of the events of default set forth in the loan documents. The SSC
Facility includes as an event of default failure of J.G. Wentworth Receivables
II LLC (a special purpose limited liability company wholly owned by SSC) to meet
various financial and other covenants. The MFC Facility provides for events of
default upon the failure of MFC to abide by financial covenants including
maintaining a minimum net worth of its receivables and upon any change in the
law that may materially alter the schedule of payments due on the deferred
payment obligations owned by MFC. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations -- Liquidity and Capital
Resources.'
 
                                       8
Dependence on Securitizations.  The Company intends to rely significantly
upon securitizations to generate cash proceeds for repayment of the Credit
Facilities and to finance originations of deferred payment obligations and other
receivables. In addition, Gain on Sale (as defined below) of receivables
generated by these securitizations is expected to represent a significant
portion of the Company's revenues. In June, September and October 1997, the
Company completed securitizations of structured settlement receivables. There
can be no assurance that the Company will be able to securitize its deferred
payment obligations and other receivables efficiently or successfully in the
future.
 
     As of October 3, 1997, the majority of the approximately $30.0 million in
structured settlement receivables on the Company's balance sheet did not meet
the eligibility criteria of the recent securitizations. These receivables
include originations from Notice States (as defined herein), from Illinois and
payment rights arising from workers' compensation awards. The Company does not
anticipate securitizing these receivables and presently intends to hold them to
maturity.
 
     The securitization market for the Company's assets is relatively
undeveloped and may be more susceptible to market fluctuations or other adverse
changes than markets for other asset classes. Securitization transactions may be
affected by a number of factors, some of which are beyond the Company's control,
including, among others, conditions in the securities markets in general,
conditions in the asset-backed securitization market, conformity of asset pools
to rating agency requirements and the type of credit enhancements used. Adverse
changes in the secondary market could impair the Company's ability to originate,
purchase or sell assets on a favorable or timely basis. Failure to obtain
acceptable rating agency ratings could adversely affect the terms or timing of
future securitizations. The Company intends to continue securitizing its
receivables on a regular basis. Any delay in the sale of an asset pool beyond a
quarter end may eliminate reported Gain on Sale in that quarter and would likely
result in losses for such quarter being reported by the Company. If the Company
were unable to securitize receivables for any reason, the Company's growth could
be materially impaired and the Company's financial condition and results of

operations could be materially adversely affected. See 'Management Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources' and 'Business -- Securitizations.'
 
     Need for Additional Capital.  The net proceeds of the Offering, along with
borrowings under the Credit Facilities and proceeds from regular
securitizations, are expected to be sufficient to meet the Company's expected
cash requirements and fund operations based on management's strategic growth
plans for the twelve months following the Offering. See 'Management's Discussion
and Analysis of Financial Condition and Results of Operations -- Liquidity and
Capital Resources.' The Company's ability to implement its business strategy
will depend upon its ability to effect securitizations, to continue to obtain
sufficient financing under the existing Credit Facilities or to establish
alternative long-term financing arrangements. There can be no assurance that
such financing will be available to the Company on favorable terms. If such
financing were not available or the Company's capital requirements exceed
anticipated levels, then the Company may be required to seek additional equity
financing which would dilute the interests of stockholders who purchase Common
Stock in the Offering. The Company cannot determine the amount and timing of
additional equity financing requirements because such requirements are tied to,
among other factors, the growth of the Company's originations of deferred
payment obligations. If the Company were unable to access the capital markets,
its financial condition and results of operations would be materially adversely
affected. No assurance can be given, however, that the Company will have access
to the capital markets in the future for securitizations or for equity or debt
issuances, or that financing through borrowings or other means will be available
on acceptable terms to satisfy the Company's cash requirements and implement its
business strategy. See 'Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Liquidity and Capital Resources.'
 
     INTEREST RATE FLUCTUATIONS.  The Company's profitability is directly
affected by levels of and fluctuations in interest rates. Such profitability is
largely determined by the difference, or 'spread,' between the effective yield
earned by the Company on the deferred payment obligations and other receivables
acquired by the Company and the interest rates payable under the Credit
Facilities and for pass-through certificates or notes issued in securitizations.
Several factors affect the Company's ability
 
                                       9
to manage interest rate risk. Deferred payment obligations and other receivables
are purchased at effective yields which are fixed, while amounts borrowed under
the Credit Facilities bear interest at variable rates that are subject to
frequent adjustment to reflect prevailing rates for short-term borrowings. As a
result, increases in interest rates after deferred payment obligations and other
receivables are acquired, but before they are securitized or otherwise sold,
could have a material adverse effect on the Company's results of operations and
financial condition. Securitization of the Company's receivables fixes the
spread between the effective yields earned by the Company and the interest rates
paid to investors in securitizations (the 'Excess Spread') with respect to such
receivables. This Excess Spread is a component of what will determine Gain on
Sale if the securitization meets the requirements of Statement of Financial
Accounting Standards No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishments of Liabilities ('SFAS 125'), although such

Excess Spread may be less than the potential spread that existed at the time the
receivables were purchased by the Company. Furthermore, the interest rates
demanded by investors in securitizations are affected by prevailing market rates
for comparable transactions and the general interest rate environment. The
Excess Spread discounted to its present value is a significant component of the
Company's Gain on Sale. Thus, increases in interest rates prior to the sale or
securitization of deferred payment obligations and other receivables may reduce
Gain on Sale earned by the Company. See 'Management's Discussion and Analysis of
Financial Condition and Results of Operations.'
 
     VALUATION AND POTENTIAL IMPAIRMENT OF RETAINED INTEREST.  As a fundamental
part of its business and financing strategy, the Company intends to sell a
significant portion of its receivables through securitizations. In a
securitization, the Company sells receivables that it has originated to a
special purpose vehicle for a cash purchase price and may retain a subordinated
interest in the receivables securitized and an interest in any excess cash
flows, after expenses (collectively, the 'Retained Interest'). The cash purchase
price is raised through an offering of pass-through certificates or notes by the
special purpose vehicle. Following securitization, purchasers of the
pass-through certificates or notes receive the principal collected and the
investor pass-through interest rate on the principal balance, while the Company
receives the cash flows from the Retained Interest and servicing fees.
 
     A substantial portion of the Company's total revenues for the six months
ended June 30, 1997 was recognized as gain on sale of receivables, which
represents the difference between the cash proceeds (less expenses from the sale
of pass-through certificates to investors) and the allocated basis attributable
to the pass-through certificates ('Gain on Sale'). The Company will recognize
such Gain on Sale of receivables in the quarter in which such receivables are
sold. Concurrent with recognizing such Gain on Sale, the Company records the
value of the Retained Interest and the servicing asset on its balance sheet.
 
     To account for the securitization of its receivables, the Company has
adopted SFAS 125. Under SFAS 125, the Company determines the value of the
Retained Interest by allocating the recorded investment in the receivables based
on the relative fair values of each portion on the date of sale. To value the
Retained Interest, the cash flows are projected over the life of the residual
certificates using default and interest rate assumptions that market
participants would use for similar financial instruments, subject to credit and
interest rate risks. These cash flows are discounted using an interest rate that
market participants would use for similar financial instruments. The fair
valuation also includes considerations of type of receivable, size, date of
origination and schedule of payment. The estimate of the fair value of the
servicing asset is initially calculated from market quotes for the type of
servicing performed by the Company; or alternatively, the fair value is based on
an analysis of discounted cash flows from servicing that incorporates estimates
of (i) prevailing market servicing costs; (ii) servicing revenues and (iii)
prevailing market profit margins. Although management of the Company believes
that it has made reasonable estimates of the Retained Interest and servicing
asset likely to be realized, it should be recognized that assumptions utilized
by the Company represent estimates. Actual experience may vary from these
estimates. If the Company's assumptions used in deriving the value of the
Retained Interest and the servicing asset differ from the actual results,
earnings could be negatively affected and the Company may be required to write

down the value of its
 
                                       10
Retained Interest and servicing asset. Furthermore, if a liquid market for the
Retained Interest exists, it is limited. Therefore, no assurance can be given
that all or any portion of the Retained Interest could be sold at any price,
including at its stated value on the balance sheet, if at all. See 'Management's
Discussion and Analysis of Financial Condition and Results of Operations --
Certain Accounting Considerations.' If the Reorganization had occurred as of
June 30, 1997, the amount of the deferred tax charge would have been
approximately $6.2 million.
 
     COMPETITION.  As an originator of rights to receive payments from
structured settlements and other deferred payment obligations, the Company faces
competition, primarily from other specialty finance companies. In the future,
the Company could face competition from a wide variety of financial services
providers, including commercial banks, credit unions, savings and loans and
other consumer and commercial lending institutions. Many of these existing and
potential competitors in the financial services business are substantially
larger and have more capital and other resources than the Company. Competition
can take many forms, including convenience in obtaining funding, service,
marketing and distribution channels and effective interest rates and may be
affected by fluctuations in interest rates and general economic conditions.
During periods of rising interest rates, competitors which have 'locked in' low
borrowing costs may have a competitive advantage. Furthermore, the current level
of gains realized on the sale of the type of receivables by the Company and its
competitors is attracting additional competitors into this market with the
effect of lowering the gains that may be realized by the Company on future sales
and securitizations. In addition, greater investor acceptance of securities
backed by assets comparable to the Company's receivables and greater
availability of information regarding the default experience of such receivables
creates greater efficiencies in the market for such securities. Such
efficiencies may create a desire for even larger transactions giving companies
with greater volumes of originations a competitive advantage. In addition, a
more efficient market for such securities may lead certain investors to purchase
securities backed by other types of assets where potential returns may be
greater. See 'Business -- Competition.'
 
     POSSIBLE LOSS IN QUARTER; VARIABLE QUARTERLY EARNINGS.  The Company will
record a one-time, non-cash charge to the provision for income taxes in the
quarter when the Offering is completed to reflect the deferred tax liability of
the J.G. Wentworth Affiliated Companies recorded in connection with the
Reorganization. Accordingly, the recording of such charge in the quarter in
which the Offering is completed may result in the Company reporting a net loss
for such quarter. See Note 2 to Combined Financial Statements for a discussion
of the effects of the change in tax status of the Company.
 
     Several other factors affecting the Company's business can cause
significant variations in its quarterly results of operations. In particular,
variations in the volume of the Company's receivables originations, the interest
rate spreads between the Company's cost of funds and the average effective yield
on purchased receivables, gains recorded on the sale of receivables which are
affected by the rate paid to investors in securitizations, and the timing and

size of securitizations, can result in significant increases or decreases in the
Company's revenues and income from quarter to quarter. Moreover, should the
volume of originations fail to grow as anticipated in any quarterly or other
period, the Company's earnings for such period will experience an immediate
adverse impact since the costs associated with the Company's internal
originations capacity cannot be easily or quickly reduced should the volume of
originations fall. Any significant decrease in the Company's quarterly revenues
or income could have a material adverse effect on the Company's financial
condition and results of operations. See 'Management's Discussion and Analysis
of Financial Condition and Results of Operations -- Quarterly Results of
Operations.'
 
     ABILITY OF THE COMPANY TO CONTINUE GROWTH STRATEGY.  The Company's ability
to continue its growth strategy depends on its ability to increase the volume of
deferred payment receivables it originates while successfully managing its
growth. This volume increase is, in part, dependent on the Company's ability to
effect regular securitizations and to procure, maintain and manage sources of
funding pursuant to the Credit Facilities or otherwise. In addition to the
Company's financing needs, the Company's ability to manage its growth
successfully and sustain profitability will depend upon, among other factors,
(i) offering attractive products to prospective customers, (ii) marketing its
 
                                       11
products successfully, (iii) maintaining appropriate procedures, policies and
systems to ensure that the Company's receivables have an acceptable level of
credit risk and loss, (iv) managing the costs associated with expanding its
infrastructure, (v) identifying new lines of business and asset classes where
the opportunities for profitable operations are present as competition
intensifies in existing lines of business, (vi) hiring and retaining qualified
personnel and (vii) continuing to operate in competitive economic, regulatory
and judicial environments that are conducive to the Company's business
activities. In order to support the growth of its business, the Company has
added a significant number of new operating procedures and personnel. The
Company recently implemented new computer hardware and software systems that
require additional corresponding investments in training and education. The
Company's significant growth has placed substantial new and increased pressures
on the Company personnel. There can be no assurance that the addition of new
operating procedures and personnel, together with the Company's enhanced
computer system, will be sufficient to enable it to meet its current or future
operating needs. Changes in the Company's ability to obtain or maintain any or
all of these factors or to successfully manage its growth strategy could have a
material adverse effect on the Company's operations, profitability and growth.
 
     RISKS ASSOCIATED WITH STRUCTURED SETTLEMENTS
 
     Limited Operating Experience in Structured Settlements.  The Company began
acquiring rights to receive payments from structured settlements in 1995.
Consequently, the Company has limited operating history in acquiring, servicing
and collecting structured settlement receivables. Therefore, the historical
performance of the Company's operations, including its underwriting and
servicing operations, may be of limited relevance in predicting future
performance. Any collections or other problems associated with the large number
of structured settlement receivables originated in the recent past will not

become apparent until sometime in the future. Consequently, the Company's
historical results of operations may be of limited relevance to an investor
seeking to predict the Company's future performance.
 
     Restrictions on Assignability of Structured Settlement Receivables.  Most
of the settlement agreements giving rise to the structured settlement payments
purchased by the Company contain anti-assignment clauses that expressly
proscribe the assignment of the scheduled payments due thereunder. Consequently,
there is no assurance that the assignment proscribed by an anti-assignment
clause would be effective against the obligor which, in the case of most
structured settlements, is a special purpose entity to which an insurance
company assigns its obligations to make payments under the settlement (the
'Assumption Party'). Although the Company believes that the modern trend in the
law would permit assignments to be effective against the Assumption Party
notwithstanding an express contractual provision to the contrary, the
traditional legal rule would hold that an express prohibition of assignment will
normally be enforced in accordance with its terms. In the majority of the
states, case law is insufficient to allow any determination as to how a court
would rule. Even in the jurisdictions which have adopted the modern trend,
however, an assignment in violation of an anti-assignment clause would give rise
to a breach of the underlying settlement contract, thereby permitting the
beneficiary of such clause to recover damages, if any could be proved, for
breach of contract. The presence of restrictions on the assignability of certain
receivables may make such receivables ineligible for the Company's
securitization program. Therefore, to the extent that courts permit the recovery
of damages from claimants, the Company's business could be materially adversely
affected. Furthermore, although the Company believes that reported case law
appears to allow it to maintain a successful action to enforce the assignment as
against the Assumption Party or the Annuity Provider (as defined herein) even in
the presence of an anti-assignment clause, there is no assurance that a court
would permit the Company to enforce the assignment. For a description of the
typical structure of a structured settlement, see 'Business -- Market Overview
-- Structured Settlements.'
 
     In addition, a Texas statute deems assignments of payment rights in
contravention of anti-assignment clauses void ab initio. Although the Company
does not seek to originate receivables from claimants who the Company believes
would be subject to the Texas statute, to the extent any of the
 
                                       12
Company's receivables are subject to Texas law, the Company's ability to collect
delinquent payments may be adversely affected.
 
     Because of the legal uncertainties associated with the effectiveness of an
assignment to the Company, the Company may not be able to enforce its rights to
the scheduled payments directly against the Assumption Party or the Annuity
Provider. Because the Company believes that the claimant has the right to
enforce the settlement contract and that the power to enforce that right can be
delegated, the Company has required that each claimant deliver to the Company a
power of attorney giving the Company the right to assert the claimant's rights
to such enforcement, subject to its potential liability for damages for breach
of contract as discussed above. The Company believes that the form of such power
of attorney gives the Company the power to sue to enforce its rights with

respect to the scheduled payments and that the power will not terminate upon the
bankruptcy of a claimant. If, however, a bankruptcy court were to rule that the
scheduled payments were part of the bankruptcy estate of the claimant, the
automatic stay imposed by Section 362 of the U.S. Bankruptcy Code of 1978, as
amended (the 'Bankruptcy Code'), would prevent the exercise of such power of
attorney. Although in such cases the Company would seek relief from automatic
stay from the bankruptcy court, there is no assurance that the court would rule
in the Company's favor. See '-- Insolvency Risks.'
 
     Furthermore, the assignment by the claimant of its rights may violate the
terms of the annuity contract entered into between the Assumption Party and the
Annuity Provider. The assignment of the rights to the proceeds of an annuity
contract may in some states be governed by insurance statutes whose provisions
may be more restrictive than the general legal principles governing assignments
of payment rights. In addition, the assignment of the settlement payments may
result in the breach of certain other provisions in the underlying settlement
agreements. These restrictions on assignability may also have an adverse effect
on the Company's ability to complete securitizations of its receivables.
 
     Risk of Tax Law Change.  The use of structured settlements is largely the
result of the favorable federal income tax treatment of such transactions under
current law. See 'Business -- Market Overview -- Structured Settlements.' If
such treatment were changed adversely by a statutory change or a change in
interpretation, the dollar volume of structured settlements could be reduced
significantly which would also reduce the level of the Company's structured
settlement business. In addition, if there were a change in the Code that would
result in adverse tax consequences of the assignment of deferred payment
obligations, such change could have a material adverse effect on the Company's
business.
 
     Risk of Diversion of Scheduled Payments.  Approximately 2.7% of the
claimants from whom the Company has purchased structured settlement receivables
have diverted scheduled payments. Diverted scheduled payments are considered
defaults. Although the Company, as part of its collection efforts, has
instituted litigation to recover the diverted payments, the Company's ability to
enforce judgments entered against the claimants may be adversely affected by the
actions of Annuity Providers. In connection with its collection efforts, the
Company, upon obtaining a judgment against a claimant, serves garnishment
process on the applicable Annuity Provider in order to enforce the judgment and
preclude the claimant from receiving and diverting additional scheduled
payments. Certain garnishee Annuity Providers have filed pleadings challenging
the Company's garnishment process. The responsive pleadings of such Annuity
Providers have included allegations and legal arguments to the effect that: (i)
contractual provisions in the underlying settlement agreements and annuity
contracts prohibit assignment, encumbrance, or garnishment of the scheduled
payments thereunder; (ii) the settlement purchase agreements entered into by the
Company and the claimant are unenforceable because of fraud or prohibitions on
assignment and offer of scheduled payments set forth in the settlement
agreements and/or the annuity contracts; and/or (iii) the scheduled payments are
exempt from garnishment under certain state laws. Certain states have enacted
statutes that prohibit garnishment of payments under specified arrangements such
as insurance contracts and workers' compensation awards. Although collections
under the deferred payment obligations originated by the Company have not to
date been adversely affected by such statutes, there is no assurance that such

statutes will not have a material adverse effect on the Company's business in
future periods.
 
     Although the Company has filed pleadings contesting all of the material
allegations and defenses asserted by such garnishee Annuity Providers and is
presently engaged in settlement discussions with
 
                                       13
substantially all such garnishee Annuity Providers with whom the Company is
currently engaged in litigation, to the extent that any such Annuity Provider is
successful in contesting the Company's garnishment process, the collectibility
of any diverted scheduled payments and the value of the Company's owned or
managed receivables may be materially adversely impacted. Any impairment of the
collectibility of the managed receivables may also constitute an event of
default under the documents governing any applicable securitization transaction.
See 'Business -- Legal Proceedings.'
 
     Insolvency Risks.  The Company's rights to scheduled payments in structured
settlement transactions will be adversely affected if any of the claimant, the
Assumption Party or the Annuity Provider becomes insolvent and/or becomes a
debtor in a case under the Bankruptcy Code.
 
          Risks of Insolvency of the Claimant.  The ability of the Company to
     collect scheduled payments from the Annuity Provider may be adversely
     affected by a number of risks related to the possible insolvency of the
     claimant, including without limitation the following:
 
       o Risk of Scheduled Payments Being Deemed a Part of the Claimant's
         Estate.  The Company believes that, if a claimant were to become a
         debtor in a case under the Bankruptcy Code, a court would hold that the
         scheduled payments transferred by the claimant under the applicable
         settlement purchase agreement would not constitute property of the
         estate of the claimant under the Bankruptcy Code. If, however, a
         trustee in bankruptcy or other receiver were to assert a contrary
         position, such as by requiring the Company (or any securitization
         vehicle) to establish its right to those payments under Federal
         bankruptcy law or by persuading courts to recharacterize the
         transaction as secured loans, such result could have a material adverse
         effect on the Company's business. Such risks may be greater in cases
         where anti-assignment clauses are enforced. See '-- Restrictions on
         Assignment of Structured Settlements.'
 
       o Risk of Avoidance of Assignment by Trustee.  If the scheduled payments
         are deemed to be property of the bankruptcy estate of the claimant, the
         trustee may be able to avoid assignment of the receivable to the
         Company. Courts in the jurisdictions that have ruled on such matters
         are not in agreement as to the ability of the trustee to avoid the
         transfer when the Assumption Party has not been notified of the
         assignment. The Company is aware that of the states that have
         considered such issues, judicial decisions of only four (each
         hereinafter referred to as a 'Notice State') conclude that a subsequent
         creditor takes priority over an assignee of a payment right who did not
         notify the obligor of such assignment. Although the Company purchases

         receivables in Notice States, it has not securitized receivables
         purchased from residents of the Notice States where it has not given
         proper notice. To the extent that other states in which claimants
         reside from whom the Company originates receivables adopt the rule of
         the Notice States, the Company's ability to collect or securitize its
         receivables may be adversely affected.
 
          Risks of Insolvency of Assumption Party and Annuity Provider.  The
     Company believes that the vast majority of its structured settlement
     receivables emanate from qualified assignments which require that the
     Assumption Parties fund their respective obligations under the applicable
     settlement agreements with an annuity contract covering the payments
     required to be made under such settlement agreements. Pursuant to each
     qualified assignment and the related annuity contract, the obligation to
     make the scheduled payments in respect of a structured settlement continues
     to be the responsibility of the Assumption Party, but an Assumption Party's
     ability to make such payments is typically dependent on the ability of the
     Annuity Provider to fund such payments under the related annuity contract.
     Although the large majority of the Company's structured settlement
     receivables are funded with annuity contracts issued by Annuity Providers
     rated 'A' or better by A.M. Best, there can be no assurance that such
     Annuity Providers will satisfy their obligations under the annuity
     contracts when due.
 
          Furthermore, a general creditor or representative of the creditors
     (such as a trustee in bankruptcy) of an Assumption Party could make the
     argument that the payments due from the Annuity Provider are the property
     of the estate of such Assumption Party (as the named owner thereof). There
     is very little judicial precedent addressing this issue in the context of
     annuity contracts. To the extent that a court would accept this argument,
     the resulting delays or reductions
 
                                       14
in payments on the Company's receivables could have a material adverse
     effect on the Company's financial condition and results of operations.
 
     Relationships with Annuity Providers.  The ability of the Company to
collect payments under structured settlement transactions depends on the Annuity
Providers not successfully challenging the claimant's right to direct the
payment to be sent to lockboxes or bank accounts controlled by the Company.
Although the Company believes that the claimant is legally entitled to change
the address of payment and the majority of Annuity Providers have changed the
address of payment when requested to do so by claimants, certain Annuity
Providers have resisted, and continue to resist, sending payments to Company
controlled lockboxes and bank accounts. Successful challenges by Annuity
Providers in this regard or any effort by Annuity Providers to resist
redirecting payments to the Company could have a material adverse affect on the
Company's business. See 'Business -- Legal Proceedings.'
 
     REGULATION AND LEGISLATION.  There is currently no significant government
regulation of the Company's current business, except in Illinois, where the
legislature enacted a law that takes effect on January 1, 1998 and requires that
any assignment of a structured settlement be approved by a court having

jurisdiction over the underlying claim and prohibits an Annuity Provider from
mailing payments to any party other than the claimant without such court
approval. The Illinois law does not currently specify the standards on which
courts would grant approval of assignments or the process by which such approval
should be sought. Accordingly, although the Company expects to gain court
approval for any structured settlement receivables purchased in Illinois, there
is no assurance that such approvals will be granted. As of June 30, 1997, 4.3%
of the Company's serviced receivables consisted of receivables relating to
structured settlements originated in Illinois. Also, there is no assurance that
other states will not enact similar statutes or impose other forms of regulation
in the future or that the assignment of certain receivables originated outside
of Illinois may not be subject to the restrictions in the Illinois law.
Consequently, the Company's structured settlements business may become subject
to similar or other government regulation. The nature and impact of any such
future regulation cannot be determined. There is no assurance that any such
regulation will not have a material adverse effect upon the Company's financial
condition and results of operations.
 
     Every state has statutes that regulate activities related to 'conducting an
insurance business.' Although the Company does not believe that it is conducting
an 'insurance business' and is not aware of any judicial authority in favor of
such interpretation, there can be no assurance that some or all of these
statutes will not be interpreted in the future to preclude the Company's
purchase of rights under annuity contracts or other insurance products in that
state. In addition, federal law and the laws of each state regulate the
activities of lending institutions. Although the Company believes that its
originations of receivables are true sales of such assets and thus are not
lending transactions, there is no assurance that laws that regulate lending
activities may not be interpreted in the future as applying to all or any aspect
of the Company's business activities. The application of lending regulations,
such as usury limits, disclosure requirements and capital requirements, could
have a material adverse effect on the Company's business.
 
     LOSS OF SERVICING RIGHTS AND SUSPENSION OF FUTURE SERVICING CASH
FLOWS.  The Company is entitled to receive servicing income only while it acts
as servicer for securitized receivables. Any loss of the servicing rights would
have a material adverse effect on the Company's operations and financial
condition. The Company's right to act as servicer can be terminated under
certain circumstances described in the purchase and contribution agreement or
the pooling and servicing agreement applicable to each securitization. The
Company's loss of the servicing rights under any purchase and contribution
agreement or the pooling and servicing agreement or the occurrence of a trigger
event that would block release of future servicing cash flows from the servicing
account would have a material adverse effect on the Company's financial
condition and results of operations.
 
     RISKS RELATING TO PURCHASES OF NEW CLASSES OF ASSETS.  The Company plans to
expand the scope of its business by investing in additional classes of assets on
a trial basis prior to making large scale commitments to purchases of such
assets. See 'Business -- Strategy.' As a result, investors in the Offering will
not know into what new areas, if any, the Company will expand its business and,
accordingly, will have to rely on management's determinations in this regard.
Any such new areas may involve a number of financial, competitive, regulatory
and other risks. As result, there is no assurance

 
                                       15
that the Company will be able to expand the scope of its business or, if it
does, that it will be able to do so on a long-term profitable basis. Any
unsuccessful attempt in this regard may have a material adverse effect on the
Company's financial condition and results of operations.
 
     RISKS RELATING TO ENTRY INTO MARKET FOR SELLER-FINANCED MORTGAGES.  The
Company has recently hired a group of brokers to assist it in investigating the
market for seller-financed mortgages. If the Company expands into this market as
a principal, the Company's business could be affected by new risks including:
(i) potentially weak credit profiles of some obligors; (ii) lack of uniform
documentation of the transactions; (iii) prepayment risks; and (iv) factors
affecting the value of real estate as collateral and the state of the economy
generally. Any failure of the Company to manage these risks successfully could
have a material adverse impact on its future financial condition and results of
operations. See 'Business -- Market Overview -- Other Markets.'
 
     RISKS RELATING TO INVESTMENT COMPANY ACT REGISTRATION.  A company is
generally required to register as an investment company under the Investment
Company Act of 1940, as amended (the 'Investment Company Act'), if it owns
'investment securities,' as defined under the Investment Company Act, having a
value exceeding 40% of the value of the company's total assets (exclusive of
government securities and cash items) on an unconsolidated basis (the '40%
Test'). There is no direct authority on whether any or all of the various types
of rights that the Company acquires as part of its business constitute
investment securities for purposes of the 40% Test. Although the Company
believes that none of such rights constitutes investment securities for such
purposes, there is no assurance that the Securities and Exchange Commission (the
'Commission') or courts will not reach a contrary conclusion with respect to
some or all of such rights. Registration as an investment company under the
Investment Company Act would result in a number of restrictions and requirements
that would make it impracticable for the Company to operate as currently
contemplated. Accordingly, the Company will have to monitor the mix of its
current and future investments so that it does not become subject to the
requirement to register as an investment company as a result of the 40% Test or
otherwise.
 
     DEPENDENCE ON KEY PERSONNEL.  The Company's success depends to a
significant degree upon the continuing contributions of its key management
personnel including James D. Delaney, its President and Chief Executive Officer,
Gary Veloric, its Chairman, and Michael B. Goodman, its Executive Vice President
and Chief Operating Officer (collectively, 'the Principals'). The Company
currently has employment agreements with each of the Principals for a three-year
term. The loss of these or other key management or technical personnel could
have a material adverse effect on the Company's financial condition and results
of operations. The Company does not intend to obtain key man insurance with
respect to any of its executives.
 
     CONTROL BY EXISTING STOCKHOLDERS AND POSSIBLE EFFECT OF ANTI-TAKEOVER
PROVISIONS.  The Principals, together with Alpha Nikelberry, Edward S. Stone and
ING (collectively, the 'Existing Stockholders'), currently own 100% of the
issued and outstanding capital stock of the Company. All of the Existing

Stockholders are participating in the Offering as Selling Stockholders (in this
context, the 'Selling Stockholders'). After the Offering, the Existing
Stockholders are expected to own approximately 67.9% of the outstanding Common
Stock. As a result, the Existing Stockholders would effectively be able to
control all matters requiring approval by the Company's stockholders, including
the election of directors. See 'Principal and Selling Stockholders' and 'Shares
Eligible for Future Sale.' In addition, the Company is subject to the
anti-takeover provisions of Section 203 of the Delaware General Corporation Law,
which prohibit the Company from engaging in a 'business combination' with an
'interested stockholder' for a period of three years after the date of the
transaction which such stockholder became an 'interested stockholder' unless the
business combination is approved in a prescribed manner. These provisions,
together with other provisions in the Company's Certificate of Incorporation and
By-laws, may discourage acquisition bids for the Company by persons unrelated to
certain existing stockholders. The effect of Existing Stockholders' stock
ownership and these provisions may be to limit the price that investors might be
willing to pay in the future for shares of the Common Stock or prevent or delay
a merger, takeover, or other change in control of the Company and thus
discourage attempts to acquire the Company. In addition, the Company's Board of
Directors has the authority to issue up to 5,000,000 shares of Preferred Stock
(as defined herein) and to determine the price, rights, preferences and
privileges of those shares without any further vote or action by the
stockholders. The rights of the holders of Common Stock will be subject to, and
may be adversely affected by, the rights of the holders of any Preferred Stock
that may
 
                                       16
be issued in the future. The issuance of Preferred Stock, while providing
flexibility in connection with possible acquisitions and other corporate
purposes, could have the effect of making it more difficult for a third party to
acquire a majority of the outstanding voting stock of the Company. The Company
has no present plan to issue any shares of Preferred Stock. The Company's
Certificate of Incorporation and By-laws contain other provisions, such as a
classified Board of Directors, notice requirements for stockholders and
limitations on the stockholders' ability to remove directors or to present
proposals to the stockholders for a vote, all of which may have the further
effect of making it more difficult for a third party to gain control or to
acquire the Company. See 'Description of Capital Stock.'
 
     NO PRIOR PUBLIC MARKET; POTENTIAL VOLATILITY OF STOCK PRICE.  Prior to the
Offering, there has been no public market for the Common Stock, and there can be
no assurance that an active trading market will develop or, if developed, be
sustained after the Offering. The initial public offering price will be
determined through negotiations between the Company and the representatives of
the Underwriters and may bear no relationship to the price at which the Common
Stock will trade after the Offering. See 'Underwriting.' The market price of the
Common Stock may be volatile and may be significantly affected by factors such
as actual or anticipated fluctuations in the Company's operating results,
announcements of new lines of business by the Company or its competitors,
developments with respect to conditions and trends in the Company's lines of
business or in the financial services industry as a whole, governmental
regulation, changes in estimates by securities analysts of the Company's or its
competitors' future financial performance, general market conditions and other

factors, many of which are beyond the Company's control. In addition, the stock
market has from time to time experienced significant price and volume
fluctuations that have adversely affected the market prices of securities of
companies irrespective of such companies' operating performances.
 
     SHARES ELIGIBLE FOR FUTURE SALE.  Sales of substantial amounts of the
Common Stock in the public market following the Offering could adversely affect
the market price of the Common Stock. Upon the completion of the Offering, the
Company will have 16,466,667 shares of Common Stock outstanding. Of these
shares, the 5,286,738 shares of Common Stock sold in the Offering will be freely
tradeable without restriction or further registration under the Securities Act
of 1933, as amended (the 'Securities Act'). The remaining 11,179,929 shares of
Common Stock outstanding as of the date of this Prospectus are 'restricted
securities' as defined by Rule 144 under the Securities Act ('Rule 144').
 
     Upon the completion of the Offering, there will be 650,000 shares of Common
Stock issuable upon exercise of options under the 1997 Stock Incentive Plan. The
options will become exercisable in four equal annual installments beginning on
the first anniversary of the completion of the Offering. The Company intends to
file a registration statement on Form S-8 covering the shares of Common Stock
issuable upon exercise of options within one year from the date of this
Prospectus. The shares registered under such registration statement will be
available for resale in the open market upon the exercise of options, subject to
Rule 144 volume limitations applicable to affiliates. See 'Management -- 1997
Stock Incentive Plan.'
 
     The Company, the Selling Stockholders, directors, executive officers and
certain other securityholders of the Company have agreed that they will not,
directly or indirectly, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option to
purchase or other sale or disposition) any shares of Common Stock, or of equity
securities of the Company substantially similar thereto or any other securities
convertible into, or exercisable or exchangeable for, any shares of Common Stock
or such similar securities for a period of 180 days after the date of this
Prospectus, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, except that during such period,
shares of Common Stock may be issued upon the exercise of outstanding stock
options and the Company may issue employee stock options which are exercisable
after the 180th day after the date of this Prospectus. Prudential Securities
Incorporated, on behalf of the Underwriters, may, in its sole discretion at any
time and without prior notice, release all or any portion of the shares of
Common Stock subject to the agreement.
 
     IMMEDIATE AND SUBSTANTIAL DILUTION.  Purchasers of shares of Common Stock
in the Offering will experience an immediate and substantial dilution of
approximately $12.16 per share, assuming an initial public offering price of
$15.00 (the mid-point of the price range set forth on the cover page of this
Prospectus) in the pro forma net tangible book value per share of Common Stock
from the initial public offering price. See 'Dilution.'
 
                                       17
THE REORGANIZATION AND CHANGE IN TAX STATUS
 
     On the date of the Reorganization, pursuant to the terms of a contribution
agreement (the 'Contribution Agreement'), the Principals will contribute all of
their capital stock in JGW, SSC Management and the General Partners and the
Existing Stockholders will contribute 100% of their interests in the
Partnerships to the Company, in exchange for a number of shares of Common Stock
determinable pursuant to a formula set forth in the Contribution Agreement. The
Reorganization will occur immediately prior to the completion of the Offering.
The Common Stock issued pursuant to the Contribution Agreement will constitute
all of the outstanding stock of the Company prior to the completion of the
Offering. The total number of shares distributable to the Existing Stockholders
in the Reorganization will be 12,466,367.
 
     As a result of the Reorganization, JGW and the General Partners, each of
which will become a wholly owned subsidiary of the Company, will be fully
subject to federal and state income taxes, and the Company will record a net
deferred tax liability on its balance sheet. From their formation until the
Reorganization, JGW and the General Partners have been treated as S corporations
for federal income tax purposes and for certain state corporate income tax
purposes. As a result, the historical earnings of JGW and the General Partners
have been taxed directly to their respective stockholders at their individual
federal and state income tax rates. The amount of the deferred tax liability to
be recorded as of the date of termination of the S corporation status will
result principally from temporary differences between accounting and tax
treatment of income earned from finance receivables and Gain on Sale. The net
deferred tax liability will be recorded as a non-cash charge to the provision
for taxes in the quarter in which the Offering is completed. If the S
corporation status of JGW and the General Partners had been terminated as of
June 30, 1997, the amount of the deferred tax liability would have been
approximately $6.2 million. See 'Risk Factors--Possible Loss in Quarter;
Variable Quarterly Earnings;' 'Capitalization' and 'Selected Combined Financial
Data.'
 
     Since inception, JGW and the General Partners have paid approximately 92%
of their estimated taxable income, including an estimate for the six months
ended June 30, 1997 to the Principals as S corporation distributions
(approximately $1.2 million was distributed from January 8, 1991 through June
30, 1997). Such distributions were paid to the Principals as distributions of a
portion of JGW's and the General Partner's earnings and to pay the Principals'
taxes. In September 1997, JGW made a distribution of $70,000. From June 30, 1997
through October 8, 1997, SSC distributed $2.1 million to the Existing
Stockholders and intends to distribute an additional $2.0 million to the
Existing Stockholders in October 1997. Since inception through June 30, 1997,
the Partnerships paid approximately $4.4 million to the Existing Stockholders.
Prior to the Reorganization, JGW will distribute an estimated $1.2 million cash
payment to the Principals (the 'Tax Distribution'). The Tax Distribution
represents the sum of approximately (i) $298,000 in taxes payable at the
applicable statutory rate by the Principals on the estimated net earnings of JGW
and the General Partners for the period from January 1, 1997 to November 30,
1997 and (ii) $939,000 in taxes payable at the applicable statutory rate by the
Principals on the estimated net profits of the Partnerships from January 1, 1997
to November 30, 1997.

 
     The Company, JGW, the General Partners and the Existing Stockholders have
entered into a tax indemnification agreement (the 'Tax Agreement') relating to
their respective income tax liabilities. Because JGW and the General Partners
will be fully subject to corporate income taxation after the termination of
their S corporation status, the reallocation of income and deductions between
the period during which JGW and the General Partners were treated as S
corporations and the period during which the Company, JGW and the General
Partners will be subject to corporate income taxation may increase the taxable
income of one party while decreasing that of another party. Accordingly, the Tax
Agreement is intended to assure that taxes are borne by the Company on the one
hand and the Existing Stockholders on the other only to the extent that such
parties received the related income. The Tax Agreement generally provides that
the Company will indemnify the Existing Stockholders against any liabilities of
the Company after the Reorganization, and the Existing Stockholders will
indemnify the Company against any tax liabilities of the Existing Stockholders
prior to the date of the Reorganization (in each case such indemnified amounts
include interest and penalties and related costs and expenses).
 
                                       18
The Company will also indemnify the Existing Stockholders for all taxes imposed
upon them as the result of their receipt of an indemnification payment under the
Tax Agreement. Any payment made by the Company to the Existing Stockholders
pursuant to the Tax Agreement may be considered by the Internal Revenue Service
or state taxing authorities to be non-deductible by the Company for income tax
purposes. The Tax Agreement also provides that the Company will reimburse the
Existing Stockholders for any taxes that result from the disallowance of
deductions taken by the Existing Stockholders, the result of which is to permit
the Company, JGW or the General Partners to take such disallowed deductions
after completion of the Reorganization. None of the parties' obligations under
the Tax Agreement are secured, and, as such, there can be no assurance that the
Existing Stockholders or the Company will have funds available to make any
payments which may become due under the Tax Agreement. See 'Certain
Relationships and Related Party Transactions.'
 
                                       19
USE OF PROCEEDS
 
     The net proceeds to the Company from the sale of 4,000,000 shares of Common
Stock offered by the Company hereby are estimated to be $54.8 million, assuming
an initial public offering price of $15.00 per share (the mid-point of the price
range set forth on the cover page of this Prospectus) and after deducting
underwriting discounts and commissions and estimated offering expenses. The
Company will not receive any of the proceeds from the shares of Common Stock
sold by the Selling Stockholders.
 
     The Company anticipates applying approximately $1.2 million to fund the
cash Tax Distribution to the Principals and to pay down the outstanding amounts
on the Credit Facilities that were incurred to fund the Company's originations
of structured settlements and other deferred payment obligations. At October 3,
1997, $28.3 million was outstanding on the SSC Facility, which bore interest at
a rate of 9.15% per annum on that date, and $12.3 million was outstanding on the
MFC Facility, which bore interest at a rate of 7.15% per annum on that date. See
'Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Liquidity and Capital Resources.'
 
     The remainder of the net proceeds will be added to working capital to be
used for general corporate purposes. Pending such uses, the net proceeds will be
invested in interest-bearing instruments.
 
                       DISTRIBUTIONS AND DIVIDEND POLICY
 
     Prior to the Reorganization, the Partnerships distributed cash to their
partners on a periodic basis, including the Principals. MFC paid $793,000,
$928,000 and $0 in distributions to its partners in 1995, 1996 and the six
months ended June 30, 1997, respectively, and SSC paid $0, $702,000 and $2.0
million in distributions to its partners in 1995, 1996 and the six months ended
June 30, 1997, respectively. In addition, JGW and the General Partners made S
corporation distributions to their shareholders of $22,000, $285,000 and
$793,000 in 1995, 1996 and the six months ended June 30, 1997, respectively.
During the period from June 30, 1997 until October 8, 1997, JGW, SSC and MFC
distributed $70,000, $2.01 million and $221,000 to their partners, respectively.
Also, SSC intends to distribute an additional $2.0 million to the Existing
Stockholders in October 1997.
 
     The Company, as a newly formed entity, has not paid or declared cash
dividends on its capital stock. The Company currently expects it will retain its
future earnings for use in the operation and expansion of its business and does
not anticipate paying or declaring any cash dividends in the foreseeable future.
 
                                       20
CAPITALIZATION
 
     The following table sets forth the capitalization of the Company at June
30, 1997 (i) on a historical combined basis, (ii) on a pro forma combined basis
assuming the Reorganization, the payment of the Tax Distribution and the
recording of a deferred tax liability, and (iii) on a pro forma combined basis
as adjusted to reflect the sale of the 4,000,000 shares of Common Stock offered
by the Company at the assumed initial public offering price of $15.00 per share
(the mid-point of the price range set forth on the cover page of this
Prospectus) and the application of the estimated net proceeds therefrom.
 
     The table should be read in conjunction with the Combined Financial
Statements of the J.G. Wentworth Affiliated Companies and the Notes thereto
included elsewhere herein. See 'The Reorganization and Change in Tax Status,'
'Use of Proceeds' and 'Management's Discussion and Analysis of Financial
Condition and Results of Operations.'
 
                                             JUNE 30, 1997
                                 -------------------------------------
                                              PRO
                                 ACTUAL     FORMA(1)    AS ADJUSTED(2)
                                 -------    --------    --------------
                                        (DOLLARS IN THOUSANDS)
Debt:
Notes payable, banks..........   $75,165    $ 75,165       $ 21,571
Stockholders' equity:
  Preferred Stock $.01 par
     value, 5,000,000 shares
     authorized and no shares
     outstanding..............        --          --             --
  Common stock, $.01 par
     value, 30,000,000 shares
     authorized, 12,466,667
     outstanding pro-forma and
     16,466,667 shares
     outstanding, as
     adjusted.................         2         125            165
Additional paid-in capital....       261      (3,960)        50,800
Retained earnings (deficit)...     1,939      (4,261)        (4,261)
Partners capital (deficit)
  accounts....................    (2,861)         --             --
Due from shareholders or
  partners....................       (31)         --             --
                                 -------    --------    --------------
     Total equity (deficit)...      (690)     (8,096)        46,704
                                 -------    --------    --------------
     Total capitalization.....   $74,475    $ 67,069       $ 68,275
                                 -------    --------    --------------
                                 -------    --------    --------------
------------------
(1) Gives pro forma effect to (i) the Tax Distribution to the Principals in the
    amount of $1.2 million and (ii) the creation of a net deferred tax liability
    in the amount of $6.2 million arising in connection with the Company's

    conversion to a C corporation. See 'The Reorganization and Change in Tax
    Status' and Notes 2 and 3 to the Combined Financial Statements of the J.G.
    Wentworth Affiliated Companies.
 
(2) Gives pro forma effect to the Reorganization and issuance and sale by the
    Company of 4,000,000 shares of Common Stock offered hereby at the assumed
    initial public offering price of $15.00 per share (the mid-point of the
    price range set forth on the cover page of this Prospectus) and the
    application of the net proceeds therefrom, including an assumed $54.8
    million to be paid to reduce amounts outstanding under the Credit
    Facilities. See 'Use of Proceeds' and Notes 1 and 2 to the Combined
    Financial Statements of the J.G. Wentworth Affiliated Companies.
 
                                       21
DILUTION
 
     Purchasers of the Common Stock offered hereby will experience an immediate
and substantial dilution in the net tangible book value of their Common Stock
from the initial public offering price. The pro forma negative net tangible book
value of the Company as of June 30, 1997 was $(8.1) million or $(0.66) per
share. Pro forma negative net tangible book value per share is determined by
dividing the net negative tangible book value of the Company on a pro forma
basis (total tangible assets less total liabilities) by the number of shares of
Common Stock outstanding on a pro forma basis, after giving effect to the
Reorganization. After giving effect to the sale by the Company of 4,000,000
shares of Common Stock offered by the Company at an assumed initial public
offering price of $15.00 per share (the mid-point of the price range set forth
on the cover page of this Prospectus), after deducting underwriting discounts
and commissions and estimated offering expenses, the pro forma net tangible book
value of the Company as of June 30, 1997 would have been $46.7 million or $2.84
per share. This represents an immediate increase in pro forma net tangible book
value of $3.50 per share to the Existing Stockholders and an immediate and
substantial dilution in pro forma net tangible book value of $12.16 per share to
new investors purchasing Common Stock in the Offering. The following table
illustrates this per share dilution:
 
Initial public offering price per share at
  June 30, 1997..............................              $ 15.00
        Negative net tangible book value per
           share at June 30, 1997............   $ (0.06)
        Decrease attributable to Tax
           Distribution......................     (0.10)
        Decrease due to deferred tax
           liability.........................     (0.50)
                                                -------
                                                  (0.66)
        Increase in net tangible book value
           per share attributable to new
           public investors..................      3.50
Pro forma net tangible book value per share
  after the Offering.........................                 2.84
                                                           -------
Dilution per share to new public investors...              $ 12.16
                                                           -------
                                                           -------
------------------
     The following table summarizes, on a pro forma basis (as described above)
as of June 30, 1997, the number of shares of Common Stock purchased from the
Company, the total consideration paid to the Company and the average price per
share paid by the Existing Stockholders (which for the purposes of this table is
assumed to be zero) and by the new investors purchasing shares of Common Stock
in the Offering, at an assumed initial public offering price of $15.00 per share
(the mid-point of the price range set forth on the cover page of this
Prospectus) and before deducting underwriting discounts and commissions and
estimated offering expenses:
SHARES PURCHASED        TOTAL CONSIDERATION       AVERAGE
                           ---------------------    ----------------------      PRICE
                             NUMBER      PERCENT      AMOUNT       PERCENT    PER SHARE
                           ----------    -------    -----------    -------    ---------
Existing Stockholders...   12,466,667      75.7%    $        --        --%     $    --
New Investors...........    4,000,000      24.3%     60,000,000       100%       15.00
Total...................   16,466,667     100.0%    $60,000,000       100%     $  3.64
                                         -------    -----------    -------
                                         -------    -----------    -------
The foregoing tables assume that the Underwriters' over-allotment option to
purchase 793,011 shares of Common Stock to be granted prior to the completion of
the Offering with an exercise price per share equal to the initial public
offering price will not be exercised. See 'Management -- 1997 Stock Incentive
Plan' and 'Underwriting.'
 
                                       22
SELECTED COMBINED FINANCIAL DATA
 
                 (DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
 
     The following table contains certain combined financial data of the Company
and is qualified by the more detailed Combined Financial Statements of the J.G.
Wentworth Affiliated Companies and Notes thereto included elsewhere in this
Prospectus. The combined statement of operations data for the years ended
December 31, 1994, 1995, and 1996 and the combined balance sheet data as of
December 31, 1995 and 1996 have been derived from the Combined Financial
Statements of the J.G. Wentworth Affiliated Companies which have been audited by
Coopers & Lybrand L.L.P., independent accountants, as indicated in their report
included elsewhere in this Prospectus. The selected combined statement of
operations data for the years ended December 31, 1992 and 1993 and for the six
months ended June 30, 1996 and 1997 and the combined balance sheet data as of
December 31, 1992, 1993 and 1994, and June 30, 1997 of the J.G. Wentworth
Affiliated Companies have been derived from unaudited combined financial
statements. The combined unaudited financial statements, in the opinion of
management, include all adjustments (consisting only of normal recurring
adjustments) necessary for a fair presentation of the financial condition and
results of operations for such periods. The results of operations for the six
months ended June 30, 1996 and June 30, 1997 are not necessarily indicative of
the results that may be expected for any other interim period or for the entire
year. The selected combined financial data set forth below should be read in
conjunction with 'Management's Discussion and Analysis of Financial Condition
and Results of Operations' and all of the Combined Financial Statements of the
J.G. Wentworth Affiliated Companies and Notes thereto included elsewhere in this
Prospectus. The selected pro forma combined financial data should be read in
conjunction with Note 1 to the Combined Financial Statements of the J.G.
Wentworth Affiliated Companies included elsewhere in this Prospectus. The
following table also includes certain unaudited pro forma combined statement of
operations data for the year ended December 31, 1996 and the six months ended
June 30, 1997 which give effect to the Reorganization, the Offering and certain
other adjustments as if they had occurred on June 30, 1997.
SIX MONTHS ENDED
                                                      YEAR ENDED DECEMBER 31,                                  JUNE 30,
                                -------------------------------------------------------------------    -------------------------
                                   1992          1993          1994          1995          1996           1996          1997
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
                                (UNAUDITED)   (UNAUDITED)                                              (UNAUDITED)   (UNAUDITED)
INCOME STATEMENT DATA:
Revenues:
  Interest income.............    $    --       $   389       $ 2,755       $ 8,560     $    10,426      $ 5,601     $     8,743
  Gain on sale of
    receivables...............         --            --            --           268             576           --          11,419
  Other income................        249         1,008           417           894             785          319             386
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
    Total revenues............        249         1,397         3,172         9,722          11,787        5,920          20,548
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------

Expenses:
  Interest expense............         --           163         1,541         4,995           6,380        2,820           4,783
  Salaries and benefits.......         42           453           686         1,509           1,992          697           2,384
  Marketing expenses..........         --            45           148           224           3,606        1,010           3,682
  Other operating expenses....        214           661           873         1,350           3,384        2,588           1,800
  Provision for credit
    losses....................         --            --            --            --             500          165           1,630
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
    Total expenses............        256         1,322         3,248         8,078          15,862        7,280          14,279
Income (loss) before
  extraordinary loss..........         (7)           75           (76)        1,644          (4,075)      (1,360)          6,269
Extraordinary loss............         --            --            --           876              --           --              --
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
Net income (loss).............    $    (7)      $    75       $   (76)      $   768     $    (4,075)     $(1,360)    $     6,269
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
                                -----------   -----------   -----------   -----------   -----------    -----------   -----------
UNAUDITED PRO FORMA
  INFORMATION:
Pro forma (benefit) provision
  for income taxes (1)........                                                          $    (1,508)                 $     2,320
                                                                                        -----------                  -----------
Pro forma net income (loss)
  (1).........................                                                          $    (2,567)                 $     3,949
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
PER SHARE DATA:
Pro forma net income (loss)
  per share (1)(2) ...........                                                          $     (0.20)                 $      0.31
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
Pro forma number of shares
  outstanding (1)(2)..........                                                           12,549,134                   12,549,134
                                                                                        -----------                  -----------
                                                                                        -----------                  -----------
23
DECEMBER 31,                                   JUNE 30,
                            -----------------------------------------------------------------------    -----------
                               1992           1993           1994           1995           1996           1997
                            -----------    -----------    -----------    -----------    -----------    -----------
                            (UNAUDITED)    (UNAUDITED)    (UNAUDITED)                                  (UNAUDITED)
BALANCE SHEET DATA:
Finance receivables......     $    12        $ 3,221        $33,778        $60,104        $90,930       $  71,757
Retained interests.......          --             --             --             --             --           5,219
Servicing asset..........          --             --             --             --             --             890
Total assets.............         246          4,629         35,270         62,987         91,975          81,445
Notes payable, banks.....          --          3,443         32,840         56,907         91,858          75,165
Total liabilities........           4          3,925         34,642         61,943         96,378          82,135
Total equity (deficit)...         242            704            628          1,044         (4,403)           (690)
SIX MONTHS ENDED
                                          YEAR ENDED DECEMBER 31,                        JUNE 30,
                            ----------------------------------------------------    -------------------
                             1992       1993       1994       1995        1996       1996        1997
                            -------    -------    -------    -------    --------    -------    --------
UNAUDITED OPERATING DATA:
Portfolio Owned and
  Serviced:
  Maturity value.........   $   14     $3,839     $38,799    $74,820    $166,061    $82,377    $245,337
  Carrying value.........   $   12     $3,221     $33,778    $60,104    $ 90,930    $71,255    $142,394
Weighted average yield...     29.7 %     26.2 %      18.0%      14.0%       20.2%      17.4%       22.4%
Allowance for credit
  losses.................       --         --          --         --    $    500    $   165    $  1,630
Allowance for credit
  losses as a percentage
  of portfolio owned.....       --         --          --         --         0.8%       0.2%        2.3%
Net charge-offs..........       --         --          --         --          --         --    $    610
Net charge-offs as a
  percentage of average
  portfolio owned........       --         --          --         --          --         --         0.6%

Structured Settlements:
  Total number of
    receivables
    originated...........       --         --          --        136       2,197        577       2,219
  Cost of receivables
    originated...........       --         --          --    $ 4,916    $ 56,004    $17,762    $ 48,889
  Maturity value of
    receivables
    originated...........       --         --          --    $13,674    $125,697    $41,242    $103,239
  Weighted average
    yield................       --         --          --       20.5%       22.3%      20.7%       23.2%
  Weighted average
    maturity (in
    years)...............       --         --          --        9.1         6.5        7.6         6.1
  Total number of
    defaulted
    receivables..........       --         --          --          2          34          6          71
  Total number of
    defaulted payments...       --         --          --          4         146         33         321
  Carrying amount of
    defaulted payments...       --         --          --    $     7    $    200    $    39    $    334
  Carrying value of
    defaulted
    receivables..........       --         --          --    $    40    $  1,313    $   151    $  3,280
  Percentage of defaulted
    receivables..........       --         --          --        0.8%        2.2%       0.7%        3.1%
  Net charge-offs........       --         --          --         --          --         --    $    610
  Net charge-offs as a
    percentage of
    portfolio owned......       --         --          --         --          --         --         0.7%

Other Deferred Payment
  Obligations:
  Total number of
    receivables
    originated...........        1        475       2,637      4,610       1,409        919         354
  Cost of receivables
    originated...........   $   12     $1,427     $31,854    $53,213    $ 17,052    $12,280    $  4,192
  Maturity value of
    receivables
    originated...........   $   14     $1,871     $38,745    $62,851    $ 19,738    $14,217    $  4,905
  Weighted average
    yield................     29.7 %     26.2 %      18.1%      14.1%       13.2%      12.7%       13.5%
  Weighted average
    maturity (in
    years)...............      0.5        1.1         1.2        1.3         1.2        1.3         1.2
  Total number of
    delinquent
    receivables..........       --         --          --         13          20         16          10
  Carrying value of
    delinquent
    receivables..........       --         --          --        133         197        127          63
  Delinquent receivables
    as a percentage of
    average portfolio....       --         --          --        0.3%        0.7%       0.3%        0.4%
  Net charge-offs........       --         --          --         --          --         --          --
------------------
(1) Prior to the Reorganization, JGW and the General Partners were treated as S
    corporations for state and federal income tax purposes. The pro forma
    presentation reflects the provision for income taxes as if JGW and the
    General Partners had always been C corporations and the activities of the
    Partnerships had always been taxed as if owned by the Company at an assumed
    effective tax rate of 37%.
 
(2) Pro forma net income (loss) per share is computed based on 12,466,667 shares
    of Comon Stock outstanding before the Offering and gives effect to the
    Reorganization and reflects the 82,467 shares of Common Stock which would
    need to be issued to generate the cash necessary to fund the Tax
    Distribution at an assumed initial public offering price of $15.00 per share
    (the mid-point of the price range set forth on the cover page of this
    Prospectus). See 'The Reorganization and Change in Tax Status.'
 
                                       24
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
                      CONDITION AND RESULTS OF OPERATIONS
 
     The following discussion should be read in conjunction with the Combined
Financial Statements of the J.G. Wentworth Affiliated Companies and the Notes
thereto included elsewhere in this Prospectus.
 
GENERAL
 
     Overview.  The Company is a specialty finance company that originates,
securitizes and services rights to receive payments from structured settlements
and other deferred payment obligations. In 1991, the Company was formed as a
merchant banking firm to pursue healthcare related transactions. It entered the
business of purchasing deferred payment obligations with the purchase of
deferred auto insurance settlement obligations of the JUA in 1992, and of MTF
and other entities in 1994. Because neither the JUA nor MTF currently defer
significant amounts of new settlement obligations, the Company's acquisition of
these claims has decreased and is not expected to increase in the near future.
In August 1995, the Company commenced the purchase of structured settlements
from private litigation claimants. This has been the Company's primary business
since 1995. The Company generates revenues from interest income earned on these
originations and the ultimate disposition of these obligations. The Company
continued to engage in the merchant banking business and earned brokerage fees
and commissions which are included in other income in the combined financial
statements for periods prior to October 1996. In October 1996, the investment
banking business was split into separate entities which are not included in the
combined financial statements subsequent to that date. The new entities formed
in October 1996 are owned by Messrs. Delaney and Veloric and it is their intent
to dispose of their entire investment in these entities prior to the completion
of the Offering.
 
     To date, the Company has not experienced any significant seasonal
variations in its acquisitions of receivables.
 
     Recent Growth.  The Company has experienced significant growth particularly
since August 1995. Management believes that this growth is primarily
attributable to (i) development of its originations staff and systems; (ii) the
development of a national brand identity through television and other
advertising; (iii) strong relationships with referral sources; (iv) the
Company's further penetration into its established markets; and (v) adequate
funding sources from credit facilities and securitizations to finance
originations.
 
     There can be no assurance that the Company will continue to grow
significantly in the future. Future growth may be limited by, among other
things, the Company's need for continued funding sources, access to capital
markets, ability to attract and retain qualified personnel, fluctuations in
interest rates, competition from existing competitors and new market entrants,
changes in regulation and legislation and other market conditions.
 
     The Company's recent and rapid growth may have a somewhat distortive impact
on certain of the Company's ratios and financial statistics and may make
period-to-period comparisons less meaningful. In light of the Company's growth,

the Company's historical earnings may be of limited relevance in predicting
future performance. Furthermore, the Company's recent earnings and other
financial results may not be indicative of the Company's results in future
periods. Any credit or other problems associated with the large number of
receivables acquired in the recent past may not become apparent until sometime
in the future. See 'Risk Factors -- Ability of the Company to Continue Growth
Strategy' and '-- Risks Associated with Structured Settlements -- Limited
Operating Experience in Structured Settlements.'
 
ACCOUNTING CONSIDERATIONS
 
     Revenue Recognition.  The Company purchases deferred payment obligations at
an amount less than maturity value. The difference between the purchase price
and the maturity value is recorded as unearned income. Unearned income is
recognized as interest income on the interest method over the life of the
related deferred payment obligation.
 
                                       25
The Company, in accordance with a Statement of Financial Accounting
Standards No. 91, Accounting for Non-refundable Fees and Costs Associated with
Originations or Acquiring Loans and Indirect Costs of Leases ('SFAS 91'), defers
certain incremental origination costs which are then amortized as an adjustment
to interest income over the life of the related deferred payment obligations
using the interest method.
 
     There are certain expenses incurred by the Company, marketing and other
indirect costs of origination, which are expended currently as operating
expenses, but for which the related income originated is earned in the future.
The Company records marketing expenses and other costs of origination that are
not capitalized under SFAS 91 but are expensed as incurred. The effect of
expensing these costs, particularly marketing expenses, is a primary cause of
the net loss in 1996.
 
     Securitization.  As a part of its business and financing strategy the
Company intends regularly to securitize rights to receive payment from
structured settlements. In a securitization, receivables originated by the
Company are sold to a special purpose entity which issues interests to
independent investors. The Company sells the receivables for a cash price and
records a Retained Interest. The book value of the Retained Interest is
calculated as the difference between the maturity value to be received from the
structured receivables sold and the sum of: (i) principal and interest to be
paid to the independent investors; (ii) trustee fees; (iii) servicing fees; and
(iv) credit losses projected to be sustained by the securitized pool. The
Company's right to the excess cash flows is subordinated to certain reserve
requirements specific to each securitization which function as a means of credit
enhancement. The Company determines the present value of the anticipated excess
cash flows at the time each securitization transaction closes using valuation
assumptions for that securitization and records an asset called the Retained
Interest.
 
     The Retained Interest is classified as being 'held to maturity' and
therefore is carried at amortized cost in accordance with Statement of Financial
Accounting Standards No. 115, Accounting for Certain Investments in Debt and

Equity Securities. The Retained Interest is recorded by the Company based on an
allocation of fair value based on the structured receivables sold. Valuation
assumptions for the Retained Interest are generally related to the maturity
value of the securitized receivables, market and economic conditions and the
anticipated credit losses associated with the receivables. Structured
receivables do not have prepayment risk. The Company's risk is limited to its
Retained Interest and the settlement cash reserve. Consequently, the Company has
not recorded a valuation allowance or recorded a writedown for the six months
ended June 30, 1997 or 1996, 1995 or 1994. The excess cash flows were discounted
at a 13% rate which provides for valuation including possible credit losses and
current market and economic conditions.
 
     Gains or losses are determined based upon the difference between the sale
proceeds of the receivables sold and the allocation of recorded investment
therein. The Company allocates the recorded investment in the receivables
between the receivables sold, the Retained Interest and the servicing asset
based on the relative fair values of those portions on the date of sale.
 
     The value of a servicing asset is determined by allocating the receivables'
previous carrying amount among the servicing asset, the receivables that were
sold, and the Retained Interest, if any, based on their relative fair values at
the date of sale. The fair value of the servicing asset is initially calculated
from market estimates of other servicing arrangements using a discount rate that
management believes is appropriate where available; or alternatively, the fair
value is based on an analysis of discounted cash flows that incorporates
estimates of: (i) market servicing costs; (ii) servicing revenue; and (iii)
market profit margins. The servicing asset is amortized in proportion to, and
over the period of, estimated net servicing income. The servicing asset recorded
by the Company as of June 30, 1997 amounted to $890,000.
 
     There can be no assurance that the Company's estimates used to determine
Gain on Sale and servicing asset valuations will remain appropriate for the life
of each securitization. If actual losses exceed the Company's estimates, the
carrying value of Company's servicing asset may have to be written down or the
Company may record a charge against its earnings during the period within which
management recognizes the disparity. See 'Risk Factors -- Valuation and
Potential Impairment of Retained Interest.'
 
                                       26
Allowance for Credit Losses.  An allowance for credit losses is maintained
at a level management considers adequate to provide for possible losses based on
known defaulted or delinquent claims, economic conditions and other relevant
factors. The Company calculates its allowance for credit losses in accordance
with Statement of Financial Accounting Standards No. 114, Accounting by
Creditors for Impairment of a Loan. Management considers its portfolio of
receivables to be homogenous except large dollar receivables, defined as
receivables with a purchase price in excess of $250,000. Management individually
determines the valuation of impairment on large receivables and collectively
evaluates the remaining portfolio for impairment. Management will charge-off the
receivables balance at the time it determines it to be uncollectible or if no
progress has been made to restore payments of the defaulted claim for a 12-month
period.
 

TERMINATION OF S CORPORATION STATUS, PARTNERSHIP STATUS AND INCOME TAXES
 
     Prior to the Reorganization, each of JGW and the General Partners had
elected to be taxed as an S corporation under the Code and applicable provisions
of Pennsylvania law. No provision was made for income taxes by such entities
since all income was taxed directly to, and losses and tax credits utilized
directly by, the stockholders or partners.
 
     Upon the completion of the Reorganization, JGW and the General Partners
will terminate their S corporation status, the Company will directly or
indirectly own 100% of the Partnerships and will be taxed as a C corporation and
adopt Statement of Financial Accounting Standards No. 109, Accounting for Income
Taxes ('SFAS 109'). See 'The Reorganization and Change in Tax Status.' Under the
asset and liability method prescribed by SFAS 109, deferred tax assets and
liabilities are recognized for future tax consequences attributable to temporary
differences between the accounting carrying amounts of existing assets and
liabilities and their respective tax bases using currently enacted tax rates.
The effect on deferred tax assets or liabilities of a change in tax rates is
recognized in income in the period that includes the enactment date of the tax
change. Under SFAS 109, deferred tax assets are recognized for deductible
temporary differences and operating loss and tax credit carry forwards, and then
a valuation allowance is established to reduce that deferred tax asset if it is
'more likely than not' that the related tax benefits will not be realized.
 
     On a pro forma basis, the net deferred tax liability resulted primarily
from differences in the treatment of income earned and treatment of the
securitization transaction. The net deferred tax liability will be recorded as a
non-cash charge to the provision for taxes in the quarter in which the Offering
is completed and may result in the Company reporting a net loss for the quarter.
The pro forma provision for income taxes in the accompanying combined statements
of operations shows results as if the Company had always been fully subject to
federal and state taxes at an assumed tax rate of 37%.
 
RESULTS OF OPERATIONS
 
  Six Months Ended June 30, 1997 Compared To Six Months Ended June 30, 1996
 
     Revenues.  Total revenues increased by $14.6 million, or 247.5%, to $20.5
million for the six months ended June 30, 1997 from $5.9 million for the six
months ended June 30, 1996. This increase was primarily due to the $11.3 million
Gain on sale of receivables sold in the June 1997 securitization and the
increase in interest earned as a result of increases in the size of the
Company's originations and receivables portfolio.
 
     Interest Income.  Interest income increased by $3.1 million, or 55.4%, to
$8.7 million for the six months ended June 30, 1997 from $5.6 million for the
six months ended June 30, 1996. This increase resulted from an increase in the
average balance of finance receivables which was a result of increased
originations of structured settlements partially offset by a decrease in
acquisitions of other deferred payment obligations which resulted in higher
weighted average yield on the Company's receivables. As a result of the higher
yields experienced on structured settlement receivables, the average portfolio
yield was 20.4% for the six months ended June 30, 1997 compared to 17.4% for the
six months ended June 30, 1996. The Company has adopted a strategy of retail

origination to minimize its dependence on outside brokers. Through retail
originations, the Company avoids paying broker fees and establishes a direct
relationship with its customers which often lead to 'continuations.'
Continuations occur when
 
                                       27
claimants sell the Company a portion of their payments due under their
structured settlement and subsequently sell another portion of their payments at
a later time. Continuations give the Company the opportunity to develop a
history with a claimant prior to making additional purchases and, therefore,
potentially minimize risk of loss. The following is a table of originations,
yields and maturities:
 
                                                 SIX MONTHS ENDED JUNE
                                                          30,
                                                ------------------------
ORIGINATIONS INFORMATION                          1996            1997
---------------------------------------------   --------        --------
                                                (DOLLARS IN THOUSANDS)
Structured Settlements:
  Maturity value.............................   $ 41,242        $103,239
  Unearned discount..........................    (23,480)        (54,350)
                                                --------        --------
  Purchase price.............................   $ 17,762        $ 48,889
                                                --------        --------
                                                --------        --------
  Broker referrals...........................       48.0%            6.8%
  Retail originations........................       52.0%           93.2%
  Continuations as a percentage of
     originations............................       17.0%           28.5%
 
Other Deferred Payment Obligations:
  Maturity value.............................   $ 14,217        $  4,905
  Unearned discount..........................     (1,937)           (713)
                                                --------        --------
  Purchase price.............................   $ 12,280        $  4,192
                                                --------        --------
                                                --------        --------
Weighted Average Yields on Originations:
  Structured settlements.....................       20.7%           23.2%
  Other deferred payment obligations.........       12.7%           13.5%
 
Weighted Average Maturity in Years (at
  origination):
  Structured settlements.....................        7.6             6.1
  Other deferred payment obligations.........        1.3             1.2
 
     Gain on Sale of Receivables.  The Company completed its first
securitization and recorded a Gain on sale of receivables of $11.3 million in
the six months ended June 30, 1997. The Company securitized receivables with a
book value of $51.3 million, including initial direct costs of origination, and
received cash totaling $59.5 million and a Retained Interest with a book value
of $5.2 million. Included in Gain on sale of receivables at June 30, 1997 is a

Gain on sale of lottery claims totaling $135,000. No receivables were sold
during the six months ended June 30, 1996. In connection with the June 1997
securitization, the Company recorded a servicing asset of $890,000.
 
     Other Income.  Other income consists primarily of income earned for
management and other services provided to entities affiliated with Messrs.
Veloric and Delaney. See 'Certain Relationships and Related Party Transactions.'
Other income increased by $67,000, or 21.0%, to $386,000 for the six months
ended June 30, 1997 from $319,000 for the six months ended June 30, 1996. This
increase was the result of an increase in the management fees offset by a
decrease in brokerage fees and commissions due to the separation of the
investment banking business discussed above. Since Messrs. Veloric and Delaney
intend to complete the divestiture of these interests, the Company does not
expect that this income will recur after the completion of the Offering.
 
     Expenses.  Interest expense increased by $2.0 million, or 71.4%, to $4.8
million for the six months ended June 30, 1997 from $2.8 million for the six
months ended June 30, 1996. Interest expense increased primarily because of
significant increases in the average borrowings outstanding under the Credit
Facilities in the six months ended June 30, 1997. Average borrowings outstanding
under the Credit Facilities were $107.3 million for the six months ended June
30, 1997 and bore interest at a weighted average rate of approximately 8.8%.
Average borrowings outstanding under the Credit Facilities were $64.1 million
for the six months ended June 30, 1996 and bore interest at a weighted average
rate of approximately 8.8%.
 
     Salaries and benefits expense increased by $1.7 million, or 244.3%, to $2.4
million for the six months ended June 30, 1997 from $697,000 for the six months
ended June 30, 1996. The Company employed 167 persons on a full-time equivalent
basis as of June 30, 1997 and 69 persons on a full-time
 
                                       28
equivalent basis as of June 30, 1996, an increase of 142.0%. This increase was
principally the result of an increase in the Company's origination and servicing
activities related to structured settlements.
 
     Marketing expenses increased by $2.7 million, or 270.0%, to $3.7 million
for the six months ended June 30, 1997 from $1.0 million for the six months
ended June 30, 1996 primarily because of the significant increase in the
Company's television, radio and print media-based origination activities. During
the six months ended June 30, 1997, the Company ran 33,827 television
commercials compared to 2,049 for the six months ended June 30, 1996. The
Company's ratio of marketing expenses to receivable originations was 3.4% for
the six months ended June 30, 1997, compared to 1.8% for the six months ended
June 30, 1996. This increase in the ratio of the Company's marketing expenses to
originations is a result of the Company's decreased reliance on brokers as a
source of originations.
 
     Other expenses decreased by $788,000, or 30.8%, to $1.8 million for the six
months ended June 30, 1997 from $2.6 million for the six months ended June 30,
1996. Other expenses include rent, office supplies, legal and professional fees
and other general and administrative expenses. This decrease resulted from the
Company refining its estimate of direct origination costs to be deferred in

accordance with SFAS 91. The increase in deferred costs resulted in a decrease
in other expenses in the six months ended June 30, 1997.
 
     The provision for credit losses increased by $1.4 million to $1.6 million
for the six months ended June 30, 1997 from $165,000 for the six months ended
June 30, 1996. The increase in the provision for credit losses for the six
months ended June 30, 1997, resulted primarily from a review of the portfolio in
light of the increase in originations of structured settlements of 175.2%.
 
  Year Ended December 31, 1996 Compared to Year Ended December 31, 1995
 
     Revenues.  Total revenues increased by $2.1 million, or 21.6%, to $11.8
million in 1996 from $9.7 million in 1995 primarily due to the $51.0 million
increase in originations of rights to payment under structured settlements
offset by a $36.2 million decline in originations of other deferred payment
obligations.
 
                                       29
Interest Income.  Interest income increased by $1.8 million, or 20.9%, to
$10.4 million in 1996 from $8.6 million in 1995 as a result of an increased
volume in the origination of structured settlements and overall increase in
weighted average yields. The average yields have increased as a result of
increased direct originations versus broker referrals and the increasing
concentration of higher yield structured settlements in the Company's mix of
receivables. The average yield on receivables increased to 20.2% in 1996 versus
14.0% in 1995. The following is a table of originations, yields and maturities:
 
                                                YEAR ENDED DECEMBER 31,
                                                -----------------------
ORIGINATIONS INFORMATION                         1995            1996
---------------------------------------------   -------        --------
                                                (DOLLARS IN THOUSANDS)
Structured Settlements:
  Maturity value.............................   $13,674        $125,697
  Unearned discount..........................    (8,758)        (69,693)
                                                -------        --------
  Purchase price.............................   $ 4,916        $ 56,004
                                                -------        --------
                                                -------        --------
  Broker referrals...........................      68.8%           32.6%
  Retail originations........................      31.2%           67.4%
  Continuations as a percentage of
     originations............................       8.2%           15.2%
 
Other Deferred Payment Obligations:
  Maturity value.............................   $62,851        $ 19,738
  Unearned discount..........................    (9,638)         (2,686)
                                                -------        --------
  Purchase price.............................   $53,213        $ 17,052
                                                -------        --------
                                                -------        --------
Weighted Average Yields on Originations:
  Structured settlements.....................      20.5%           22.3%
  Other deferred payment obligations.........      14.1%           13.2%
 
Weighted Average Maturity in Years (at
  origination):
  Structured settlements.....................       9.1             6.5
  Other deferred payment obligations.........       1.3             1.2
 
     Gain on Sale of Receivables.  The Gain on sale of receivables increased by
$308,000, or 114.9%, to $576,000 in 1996 from $268,000 in 1995 and represented
gains on sale of lottery claims purchased and sold to financial institutions.
 
     Other Income.  Other income decreased by $109,000, or 12.2%, to $785,000 in
1996 from $894,000 in 1995. This income consisted principally of consulting and
brokerage fees related to merchant banking operations. Since the Company in 1996
transferred the operations of these businesses to entities controlled by Messrs.
Delaney and Veloric, this income will not recur after the completion of the
Offering.
 

     Expenses.  Interest expense increased by $1.4 million, or 28.0%, to $6.4
million in 1996 from $5.0 million in 1995 primarily because of significant
increases in the average borrowings outstanding under the Company's credit
facilities in 1996. Average borrowings outstanding under the Company's credit
facilities were $74.4 million for 1996 and bore interest at a weighted average
rate of approximately 8.8%. Average borrowings outstanding under the Credit
Facilities were $50.0 million for 1995 and bore interest at a weighted average
rate of approximately 9.2%.
 
     Salaries and benefits expense increased by $483,000, or 33.3%, to $2.0
million in 1996 from $1.5 in 1995. The Company employed 106 persons on a
full-time equivalent basis as of December 31, 1996, and 40 persons on a
full-time equivalent basis as of December 31, 1995, an increase of 165.0%. This
increase was principally the result of an increase in the Company's origination
and servicing activities related to structured settlements.
 
     Marketing expenses increased by $3.4 million to $3.6 million in 1996 from
$224,000 in 1995. Marketing expenses increased primarily because of the
significant increase in the Company's television, radio and print media-based
originations activities. The Company commenced its television
 
                                       30
advertising campaign in March 1996. Prior to that time, the Company was
advertising only in print media.
 
     Other expenses increased by $2.0 million, or 142.9%, to $3.4 million in
1996 from $1.4 million in 1995. This increase is principally related to the
growth in the structured settlement business in 1996.
 
     The Company provided $500,000 as a provision for credit losses in 1996 as
an estimate of potential losses. The Company's structured settlement business
grew in 1996 and the provision was based on possible losses based on this
growth.
 
     Extraordinary Loss.  In March 1995, the Company refinanced all of its then
outstanding notes payable. The Company incurred an extraordinary loss of
$876,000 representing $456,000 of deferred financing costs and $420,000 of
profit sharing payments under a provision of its debt agreement, both of which
were expensed in 1995.
 
  Year Ended December 31, 1995 Compared to Year Ended December 31, 1994
 
     Revenues.  Total revenues increased by $6.5 million, or 203.1%, to $9.7
million in 1995 from $3.2 million in 1994 primarily due to an increase in the
volume of other deferred payment obligations originated by the Company and its
entrance into the market for structured settlements.
 
     Interest Income.  Interest income increased by $5.8 million, or 207.1%, to
$8.6 million in 1995 from $2.8 million in 1994 as a result of the increase in
the acquisition of other deferred payment obligations and the commencement in
August 1995 of the origination of structured settlements. A comparison of
originations, referral sources, weighted average yield and maturities were as
follows:

 
                                                 YEARS ENDED DECEMBER
                                                         31,
                                                ----------------------
ORIGINATIONS INFORMATION                         1994           1995
---------------------------------------------   -------        -------
                                                (DOLLARS IN THOUSANDS)
Structured Settlements:
  Maturity value.............................   $    --        $13,674
  Unearned discount..........................        --         (8,758)
                                                -------        -------
  Purchase price.............................   $    --        $ 4,916
                                                -------        -------
                                                -------        -------
  Broker referrals...........................        --           68.8%
  Retail originations........................        --           31.2%
  Continuations as a percentage of
     originations............................        --            8.1%
 
Other Deferred Payment Obligations:
  Maturity value.............................   $38,745        $62,851
  Unearned discount..........................    (6,891)        (9,638)
                                                -------        -------
  Purchase price.............................   $31,854        $53,213
                                                -------        -------
                                                -------        -------
Weighted Average Yields on Originations
  Structured settlements.....................        --           20.5%
  Other deferred payment obligations.........      18.1%          14.1%
 
Average Life in Years (at origination)
  Structured settlements.....................        --            9.1
  Other deferred payment obligations.........       1.2            1.3
 
     Gain on Sale of Receivables.  The $268,000 Gain on sale of receivables in
1995 related to lottery claim sales in 1995. There were no similar sales in
1994.
 
     Other Income.  Other income increased by $477,000, or 114.4%, to $894,000
in 1995 from $417,000 in 1994. Other income consists primarily of commissions
and brokerage fees earned. Since the Company in 1996 transferred the operations
of these businesses to entities controlled by Messrs. Delaney and Veloric, this
income will not recur after the completion of the Offering.
 
     Expenses.  Interest expense increased by $3.5 million, or 233.3%, to $5.0
million in 1995 from $1.5 million in 1994 primarily because of significant
increases in the average borrowings outstanding under the Credit Facilities in
1995. Average borrowings outstanding under the Credit Facilities were
 
                                       31
$50.0 million in 1995 and bore interest at a weighted average rate of
approximately 9.2%. Average borrowings outstanding under the Credit Facilities
were $16.2 million in 1994 and bore interest at a weighted average rate of

approximately 10.2%.
 
     Salaries and benefits expense increased by $823,000 million, or 118.7%, to
$1.5 million in 1995 from $686,000 in 1994. The Company employed 40 persons on a
full-time equivalent basis as of December 31, 1995 and 32 persons on a full-time
equivalent basis as of December 31, 1994, an increase of 25.0%. This increase
was principally the result of an increase in the Company's commencement of
originations of structured settlements in August 1995.
 
     Marketing expenses increased by $76,000, or 51.4%, to $224,000 million in
1995 from $148,000 in 1994. This increase was the result of additional
advertising being conducted in 1995.
 
     Other expenses increased by $477,000, or 60.4%, to $1.4 million in 1995
from $873,000 in 1994. This increase was related to the commencement of the
acquisition of structured settlements in August 1995.
 
LIQUIDITY AND CAPITAL RESOURCES
 
     The Company has experienced, and expects to continue experiencing, negative
cash flow in its operations and requires continued access to financing sources.
The Company's primary operating cash requirements include the funding of (i)
receivables originations, (ii) reserve accounts, overcollateralization
requirements, fees and expenses incurred in connection with its securitization
transactions, (iii) payments due under the Credit Facilities, (iv) tax payments
due on the Company's taxable net income, (v) television, radio and direct mail
advertising and other marketing and (vi) administrative and other operating
expenses.
 
     Adequate credit facilities and other sources of funding, which permit the
Company to fund its operating cash requirements and to securitize or sell
receivables in the secondary market, are essential to the continuation of the
Company's ability to originate and purchase loans. After utilizing available
working capital, the Company borrows money to fund its receivables originations,
and repays these borrowings as the receivables are collected or are sold. Upon
securitization and the subsequent repayment of the borrowings, the Credit
Facilities then become available to fund additional receivables originations.
 
     Cash used in operations increased $1.1 million, or 12.7%, to $9.7 million
for the six months ended June 30, 1997 from $8.6 million for the six months
ended June 30, 1996. The increase resulted primarily from increased salaries and
benefits, marketing and other indirect organization and other costs to grow the
structured settlement receivables business.
 
     Cash provided by investing activity was $30.3 million for the six months
ended June 30, 1997 compared with cash used of $5.9 million for the six months
ended June 30, 1996. The increase in cash provided related to the cash received
from the securitization of receivables in June 1997 offset by an increase in the
purchase of deferred payment obligation receivables.
 
     Cash used in financing activities was $20.0 million for the six months
ended June 30, 1997 compared with cash provided by financial activities of $13.4
million for the six months ended June 30, 1996. This increase in cash used
related to the repayment of notes payable to banks using the proceeds of the

securitization.
 
     The Company's total borrowing authority under the Credit Facilities totals
$125.0 million. The SSC Facility, a $105.0 million facility with ING and a bank
which expires on August 25, 1998, bears interest at a rate of 3.5% above the
then current London Interbank Offered Rate ('LIBOR') and if not extended is
converted to a term loan. The MFC Facility also provided by ING and a bank
totals $20.0 million in borrowing authority, bears interest at a rate of 1.5%
above LIBOR and expires May 20, 1998. Like the SSC Facility, the MFC Facility
contains no provision to extend the facility upon expiration. Upon expiration,
the amounts outstanding under the MFC Facility will convert to a term loan. The
SSC Facility is available for the purchase of structured settlements and working
capital while the MFC Facility is available for the purchase of deferred
governmental obligations and working capital governing the MFC Facility. The
Company plans to securitize and sell receivables on a periodic basis. As of
October 3, 1997, the Company had availability of $76.7 million under the SSC
Facility
 
                                       32
and $7.6 million under the MFC Facility for purchases and other working capital
needs. The proceeds of those securitizations will be used to repay the amounts
outstanding under the Credit Facilities to create availability for future
purchases and working capital. The Company completed a securitization and sale
of receivables that closed in two transactions on September 30 and October 1,
1997 from which it realized proceeds that the Company used to repay and increase
the availability under the Credit Facilities. These arrangements together with
the net proceeds of the Offering are expected to be sufficient to meet cash
requirements to purchase deferred payments and fund operations provided that (i)
the Company completes securitizations and (ii) the Company extends the Credit
Facilities or obtains new credit facilities. There is no assurance that the
Company will be able to extend the Credit Facilities beyond their expiration
dates or obtain replacement financing or favorable terms, if at all.
 
IMPACT OF INFLATION
 
     To date, inflation has had no material effect on the Company's results of
operations. Inflation, however, can have a substantial effect on operating costs
and interest rates. Interest rates normally increase during periods of high
inflation and decrease during periods of low inflation. Profitability may be
directly affected by the level and fluctuation in interest rates which affect
the Company's ability to earn a spread between interest income and costs of its
borrowings. The profitability of the Company is likely to be adversely affected
during any period of unexpected or rapid increases in inflation and related
changes in interest rates.
 
RECENT ACCOUNTING PRONOUNCEMENTS
 
     In March 1997, the Financial Accounting Standards Board ('FASB') issued
Statement of Financial Accounting Standards No. 128, Earnings per Share ('SFAS
128'), which supersedes Accounting Principles Board No. 15, Earnings per Share
('APB 15'), and is effective for the Company for both interim and annual periods
for the year ending December 31, 1997. This statement requires restatement of
all prior-period Earnings per Share data presented. SFAS 128 establishes

standards by simplifying the computation and presentation of earnings per share
('EPS'), and applies to entities with publicly held common stock or to-be-issued
common stock. It replaces the presentation of primary EPS with a presentation of
basic EPS. It also requires dual presentation of basic and diluted EPS on the
face of the income statement for all entities with complex capital structures
and requires a reconciliation of the numerator and denominator of the basic EPS
computation to the numerator and denominator of the diluted EPS computation.
Basic EPS excludes dilution and is computed by dividing income available to
common stockholders by the weighted-average number of shares of Common Shares
outstanding for the period. Diluted EPS reflects the potential dilution that
could occur if securities or other rights to be issued Common Stock were
exercised or converted into Common Stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS pursuant to APB 15. If EPS had been calculated in
accordance with SFAS 128, the basic EPS and diluted EPS for the six months ended
June 30, 1997 would have been the same as primary EPS under APB 15.
 
     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ('SFAS 130'), which is effective for the
Company for the year ending December 31, 1998, and requires restatement of all
prior-period financial statements presented for comparative purposes. SFAS 130
establishes standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains and losses) in a full set of
general-purpose financial statements. SFAS 130 requires that all items that are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. It is anticipated that the
adoption of SFAS 130 will not have a material effect on the financial condition
or results of operations of the Company.
 
                                       33
BUSINESS
 
GENERAL
 
     The Company is a specialty finance company that originates, securitizes and
services rights to receive payments from structured settlements and other
deferred payment obligations. Deferred payment obligations are contractual
arrangements under which one party has agreed to make fixed, scheduled payments
to another party over time to satisfy an obligation that would otherwise be paid
in an up-front, lump sum. The Company specializes in transactions involving two
types of deferred payment obligations: (i) structured settlements arising from
personal injury litigation as to which highly-rated insurance companies are the
obligor, and, to a lesser extent, (ii) other deferred payment obligations such
as claims arising from personal injury litigation and state-operated lotteries
as to which governmental or quasi-governmental entities are the obligor.
 
     According to industry sources, in excess of $40 billion of annuity premiums
paid to third parties to fund structured settlements were generated from 1980 to
1995 and approximately $4 billion to $5 billion in new structured settlements
are generated each year in the United States. Structured settlements continue to
be an attractive option for claimants and insurance companies because structured
settlements: (i) offer favorable tax treatment to claimants and insurers; (ii)
permit payment flexibility and incorporation of investment management features;
and (iii) lower the cost of compensating victims and thereby help foster timely
settlement of litigation. From the claimants' point of view, however, structured
settlements have a significant weakness, inflexibility. When claimants'
financial needs change, the fixed payment schedule of a structured settlement
may no longer satisfy these needs. The Company's funding programs offer those
claimants the ability to convert their rights to future payments into cash that
they can use for such purposes as paying medical or tuition expenses, purchasing
or improving a home, starting a business or repaying debt.
 
     The Company has achieved significant growth in the number and maturity
value of receivables purchased since commencing operations. From inception to
June 30, 1997, the Company has purchased 14,022 deferred payment obligation
receivables with an aggregate maturity value of $374.8 million. Maturity value
equals the sum of all future payments to be received under a deferred payment
obligation. The Company has generally purchased receivables at a significant
discount from maturity value. The difference between the amount paid by the
Company and the maturity value of the receivables is accrued as income over the
life of the receivable. The weighted average yield of the Company's portfolio
was 22.5% for the six months ended June 30, 1997. The Company's revenues have
increased significantly as the Company's originations volume and portfolio have
grown and the Company has employed securitizations to fund its operations.
Revenues increased from $249,000 in 1992 to $11.8 million in 1996 and $20.5
million in the six months ended June 30, 1997.
 
     In June 1997, the Company completed a $70.8 million securitization in what
it believes is the first investment grade rated securitization of structured
settlement receivables. The Company sold, through a special purpose entity,
$59.5 million of senior pass-through certificates rated 'A2' by Moody's and 'A'
by Duff & Phelps. The Company retained $11.3 million in face value of unrated
subordinated certificates and recorded a Gain on Sale of $11.3 million for the

six months ended June 30, 1997. The Company completed a securitization
transaction in which it securitized $31.0 million of receivables in September
1997 and $41.0 million of receivables in October 1997, and recorded a Gain on
Sale of $6.8 million and $8.0 million, respectively. Structured settlement
receivables and other deferred payment obligations differ from other regularly
securitized financial assets, such as consumer credit card and mortgage loans,
in that (i) prepayment risk is minimal because the timing of scheduled payments
is fixed and (ii) credit risks are low because obligors are typically insurance
companies that have received a credit rating of 'A' or better from A.M. Best or
governmental entities. From inception through December 31, 1996, the Company had
not charged-off any receivables. For the six months ended June 30, 1997, the
Company recorded a net charge-off of 0.6% of the Company's owned portfolio.
 
                                       34
The Company does not rely on brokers to originate structured settlements
and other deferred payment receivables and its policies prohibit 'cold calling'
of prospective customers. Instead, the Company utilizes a nationwide television
advertising campaign to identify hard-to-find claimants who want to sell their
payment rights to the Company. Using a 21,520-square-foot inbound call center,
the Company's originations staff responds to claimant inquiries, attempts to
quantify an individual claimant's financial needs and endeavors to structure the
funding transaction to meet those needs. The Company's policies prohibit the
origination of receivables from minors and incompetent persons.
 
     The Company was formed in October 1997 in connection with the
Reorganization as a successor to the businesses of the Affiliated Companies. See
'The Reorganization and Change in Tax Status.' JGW was formed by James D.
Delaney and Gary Veloric in 1991 as a merchant bank specializing in transactions
in the health care industry. In 1992, the Company entered the business of
purchasing the deferred settlement obligations of the JUA, and its successor,
the MTF. As the Company's success in the JUA/MTF market established its
reputation as a creative funding source, it began to search for other
opportunities to purchase income streams that, while secure and predictable, did
not meet the requirements for more traditional means of financing. After
evaluating a number of market possibilities, the Company decided in 1995 to
enter the secondary market for structured settlements. The Company leveraged the
capabilities and systems it developed for the JUA/MTF business and emerged as a
market leader in the business of purchasing structured settlements. In May 1995,
ING extended a credit facility to the Company for funding its origination of
other deferred obligations. In August 1995, the Company and ING expanded their
relationship to include funding the origination of structured settlement
receivables, at which time ING became a stockholder of the Company.
 
STRATEGY
 
     The Company's growth strategy is to increase its originations of deferred
payment receivables and profitability by further enhancing its position as the
leading originator of the rights to receive payments from structured settlements
and other deferred payment obligations. The Company believes that the creation
of a strong brand image will enable the Company to increase profitably the
volume of its receivables originated and the size of its servicing portfolio. To
achieve its profitable growth, the Company intends to continue to:
 

          Increase Retail Originations.  The Company has been successful at
     internally originating leads for the purchase of structured settlements by
     developing brand awareness for the 'Wentworth' name among potential
     claimants through a variety of marketing media, including 88,000
     thirty-second television commercials broadcast nationally from March 1996
     through September 1997. By effectively reaching its target market, the
     Company has virtually eliminated its reliance on brokers. The Company
     currently originates nearly all of its receivables using its own specially
     trained personnel. Independence from the broker community permits the
     Company to control the integrity of its origination process, avoid
     conflicts among origination channels and maintain pricing flexibility. The
     Company operates a 21,520-square-foot call center with approximately 200
     telemarketing workstations that utilize predictive dialing and data
     tracking technology. The Company has a policy that prohibits making
     unsolicited marketing calls to establish initial contact with claimants.
     The call center operates 24 hours a day Monday through Saturday.
 
          Provide Quality Customer Service.  The Company believes that the
     flexibility of its funding options, the speed of its approval process and
     the responsiveness of its customer service personnel help to differentiate
     the Company from its competitors. The Company processes applications from
     claimants who demonstrate that they have a financial need for funding and
     who can establish the existence of the right to be paid under a settlement
     agreement. After the Company has evaluated the claimant's request for
     funding, the Company typically offers the claimant alternative proposals
     for funding. The proposals offer the claimant the choice of funding varying
     portions of scheduled payments depending on the claimant's individual
     funding needs. The Company believes that its turnaround time for processing
     a claim from application to funding compares favorably with its
     competitors. The Company's trained personnel also maintain contact with
 
                                       35
claimants during and after the funding process to reduce claimant fraud and
     encourage repeat business.
 
          Maintain High Underwriting Standards.  The Company's comprehensive
     underwriting procedures are designed to ensure the quality of originated
     receivables and to minimize the risk of claimant fraud, payment diversions
     and loss with respect to the receivables. Each claimant file goes through
     several stages of review, including a taped exit interview with the
     claimant, culminating in approval by a Company staff attorney. After
     Company counsel approves a claimant for funding, the Company submits the
     file to Electronic Data Systems, Inc. ('EDS') for back-up review and
     approval prior to disbursing funds. The Company's Underwriting Operations
     Group is located at a separate facility from the Company's Originations
     Group. This physical separation of the divisions and their clearly
     delineated responsibilities provides the Company with an effective checks
     and balances system.
 
          Market to Referral Sources Such as Attorneys and Bankruptcy and Estate
     Trustees.  The Company markets directly to referral sources such as
     attorneys and bankruptcy and estate trustees. The Company maintains contact
     with these sources through a mix of outbound telemarketing, company

     sponsored newsletters and advertising in trade and professional magazines.
     The Company is the only organization that has received endorsement of the
     American Trial Lawyers Association in New Jersey ('ATLA-NJ') in connection
     with its settlement funding programs.
 
          Obtain Institutional Financing and Complete Regular
     Securitizations.  The Company intends to continue to finance its business
     by maintaining strong relationships with institutional sources of capital.
     The Company intends to complete securitizations on a regular basis to
     enhance its liquidity and to reduce outstanding amounts under the Credit
     Facilities and its exposure to fluctuations in interest rates. In June
     1997, the Company completed the securitization of $70.8 million in
     structured settlement receivables, resulting in the realization of a Gain
     on Sale of $11.3 million in the second quarter of 1997. In addition, the
     Company has completed the securitization of an aggregate of approximately
     $31.0 million and $41.0 million in carrying value of structured settlement
     receivables in September and October 1997, respectively.
 
          Maintain its Telecommunications and Information Management
     Systems.  As part of its ongoing effort to increase efficiency, the Company
     has equipped its new on-line call center with a proprietary system that
     tracks information from initial contact with the claimant through
     collection. The Company has recently upgraded its accounting systems and
     proprietary databases and portfolio tracking systems. Its proprietary
     databases were developed with the assistance of EDS and the Company's
     accounting firm. The Company will continue to pursue and evaluate methods
     for improving efficiencies by maintaining and upgrading its
     telecommunications and information management systems.
 
          Expand into New Deferred Payment Market Niches.  The Company regularly
     examines new markets to identify opportunities for completing profitable
     funding transactions. The Company believes that it can replicate its past
     successes in identifying, researching and developing, and then aggressively
     entering and becoming a recognized leader in, the structured settlement and
     other deferred payment obligations markets by applying its analytical and
     empirical approach to new market niches. Company marketing personnel
     maintain regular communication with attorneys, insurers and other market
     participants and gather information on new deferred payment streams and
     funding needs that are compatible with the Company's business model. The
     Company's executive team then analyzes these opportunities and seeks the
     input of the Company's legal staff as to alternative transaction
     structures. In areas perceived as promising, the Company engages in limited
     transactions on a trial basis to evaluate the attractiveness of the
     markets. The Company also intends to consider expanding into new markets by
     the selective acquisition of existing businesses. See 'Risk Factors --
     Risks Relating to Purchase of New Classes of Assets.'
 
                                       36
MARKET OVERVIEW
 
  General
 
     The need for the Company's funding services arises from the inflexible

nature of many deferred payment plans and the changing financial needs of many
claimants. Payment structures that originally met a claimant's needs may no
longer meet such claimant's needs as life circumstances change. The Company
provides liquidity to the claimant by purchasing, for a lump sum, the claimant's
right to receive future scheduled payments. Many claimants want to sell their
payment rights because they lack access to traditional sources of financing. The
claimant gains the advantage of realizing immediate liquidity on an otherwise
illiquid asset and the Company gains the advantage of acquiring a predictable
stream of payments from sources with strong credit profiles, such as insurance
companies and governmental or quasi-governmental entities.
 
  Structured Settlements
 
     Historically, personal injury lawsuits were settled with up-front, lump-sum
payments in exchange for releases from liability. However, favorable tax rulings
in the 1970s, which allowed future periodic payments to be received by personal
injury claimants on a tax-free basis, and the increasing size of jury awards in
the personal injury arena, propelled the recent growth of structured
settlements. Certain judgments, like settlements, are sometimes structured to
provide for periodic payments rather than payment of a single lump-sum. As
arrangements for payment of structured settlements and structured judgment
awards are substantially similar, the discussion of structured settlements in
this Prospectus applies both to structured settlements and judgments.
 
     In structuring litigation settlements, defendant insurers typically assign
their liability to an Assumption Party, which then enters into an annuity
contract with the Annuity Provider to fund the payments. The Assumption Party
receives a lump-sum payment from the defendant insurer in return for assuming
the liability for making settlement payments. The lump sum is sufficient to
purchase from another insurance company (the 'Annuity Provider') an annuity
contract to fund the periodic payments to the claimant.
 
     The Code provides for a tax-free receipt of the defendant insurer's payment
to the Assumption Party, provided that the assumption party simultaneously
purchases a 'qualified funding asset' defined as an annuity purchased from an
insurance company that matches the terms of the settlement. The tax treatment of
the lump sum payment to the Assumption Party would be in jeopardy if the annuity
payments were accelerated. As a result, it is not feasible to restructure the
schedule of settlement payments once the annuity contract is purchased by the
Assumption Party.
 
     The desire of claimants to access cash from their structured settlements
has created a secondary market. Specialty finance companies have developed
programs to purchase some or all of the claimant's right to payment under the
settlement agreement in exchange for paying to the claimant a lump sum. The
purchase transaction is structured as an assignment of payment rights under the
underlying settlement agreement because the claimant is not technically the
owner of the annuity contract and does not have the power to alter any terms
except the name of the beneficiary and the address for payment. See 'Risk
Factors -- Risks Associated with Structured Settlements -- Restrictions on
Assignability of Structured Settlement Receivables.'
 
  Other Deferred Payment Obligations
 

     A significant amount of litigation arises from personal injuries allegedly
caused by the operations of municipalities and government-owned enterprises such
as mass transit authorities. Typically these governmental operations
self-insure. Also, many private litigation settlements are funded by insurance
provided through mandatory underwriting pools that state governments established
to respond to failures in the private market for insurance of certain risks,
such as automobile insurance for high risk drivers. The settlement obligations
of self-insured government agencies are backed by the full faith and credit of
the state government. Obligations of the state mandated underwriting pools,
however, are not
 
                                       37
typically backed by government guarantees. Nevertheless, such claims have proved
to have low credit risk.
 
     Certain state governments and municipalities responded to the growing
volume of personal injury litigation in which they were involved by seeking to
defer settlement payments. Examples of this trend are the deferral programs
established by the JUA, a state-sponsored insurance pool for high risk drivers
in New Jersey, and its successor the MTF. In the early 1990's, the JUA and MTF
experienced financial problems and initiated several deferral programs under
which claimants were forced to wait from 12 to 18 months to receive payment and
in exchange were given the opportunity to earn interest at the rate of six
percent per annum.
 
     These deferral programs offered a significant business opportunity to
firms, such as the Company, who were willing to purchase the deferred payments
from the claimant. Many claimants were willing to sell their payments at a
substantial discount to their maturity value to purchasers who, in turn,
obtained the right to be paid by a creditworthy entity. The number of JUA/MTF
claims originated by the Company has fallen dramatically in recent periods
because of the decreasing number of new claims and is not expected to increase
significantly in the near future. As a result, the Company has no plans to
purchase significant numbers of new JUA/MTF claims.
 
     Certain other deferred payment obligations have many of the same attractive
characteristics to an originator as structured settlements. Because the deferral
arrangement fixes a payment as due on a specific date in the future, these other
deferred payment obligations do not suffer from any risk of prepayment. Also,
because the government-affiliated obligors have relatively strong credit
profiles, credit risks are effectively minimized.
 
  Other Markets
 
     As an integral element of its strategy, the Company regularly evaluates
opportunities to purchase other classes of financial assets. As an outgrowth of
these efforts, in October 1997, the Company hired six individuals with
experience in brokering seller-financed mortgages. The Company plans to engage
in transactions in this market on a trial basis to determine its potential for
development on a larger scale using institutional financing. Seller-financed
mortgages are obligations negotiated directly between a single buyer and a
single seller of real estate. Because they are not originated by financial
institutions, seller-financed mortgages lack uniform underwriting standards. The

varied risk profile of each mortgage loan requires that entities seeking to
purchase seller-financed mortgages in the secondary market perform a detailed
review of information relevant to the credit risks associated with the
transactions. The Company believes that its experience underwriting transactions
involving unconventional assets and its ability to locate sellers of such assets
may give the Company competitive advantages in the secondary market for
seller-financed mortgages. The Company has not yet completed a detailed review
of the opportunities and risks of the market for seller-financed mortgages.
Although the Company believes this and other businesses may present attractive
business opportunities, each new business has significant risks and, as such,
the commitment of significant resources to any one or more of such businesses
may have a material adverse effect on the Company's business and results of
operations. See 'Risk Factors -- Risks Relating to Purchase of New Classes of
Assets' and 'Risk Factors -- Risks Relating to Entry into Market for
Seller-Financed Mortgages.'
 
     Certain large municipalities, such as the City of Philadelphia, and
governmental authorities, such as the Southeastern Pennsylvania Transportation
Authority ('SEPTA') self-insure against many risks, such as bodily injuries
caused by their activities. When these entities settle claims they often impose
deferred payments on claimants. The City of Philadelphia defers payment of its
claims for twelve months and SEPTA defers payments for nine months. Many state
lottery commissions impose structured payouts of awards funded by annuity
contracts. Similar opportunities exist for funding these payments as exists in
the market for structured settlements.
 
                                       38
RECEIVABLES ORIGINATIONS
 
     Since its inception through September 1997, the Company has originated
approximately $303.0 million in maturity value of structured settlements and has
originated more than 9,400 JUA/MTF settlements with a maturity value of
approximately $131.7 million. The following table shows certain information
regarding the Company's deferred payment receivables originations on a quarterly
basis for the quarters shown:
 
                    QUARTERLY DEFERRED PAYMENT ORIGINATIONS
NUMBER
THREE MONTHS ENDED             OF CLAIMS       CARRYING VALUE(1)      MATURITY VALUE(2)
-------------------------     -----------      -----------------      -----------------
December 31, 1992........             1          $      12,155          $      13,750
March 31, 1993...........            38                387,917                485,132
June 30, 1993............           118              1,077,552              1,386,470
September 30, 1993.......           154              1,567,395              1,990,099
December 31, 1993........           116              1,280,741              1,687,365
March 31, 1994...........           263              3,584,010              4,471,797
June 30, 1994............           359              6,097,913              7,511,585
September 30, 1994.......           784              9,396,090             11,447,672
December 31, 1994........         1,252             12,776,731             15,492,868
March 31, 1995...........         1,377             15,292,890             18,241,866
June 30, 1995............         1,463             17,081,460             20,273,265
September 30, 1995.......         1,189             15,320,795             18,850,975
December 31, 1995........           726             10,387,094             19,165,817
March 31, 1996...........           680             13,273,953             22,590,421
June 30, 1996............           819             16,759,435             33,078,039
September 30, 1996.......         1,074             21,547,767             46,608,781
December 31, 1996........         1,036             21,456,514             43,357,622
March 31, 1997...........         1,225             25,937,301             52,987,903
June 30, 1997............         1,348             25,130,082             55,191,722
September 30, 1997.......         1,676             29,355,622             62,444,070
                              -----------      -----------------      -----------------
                                 15,698          $ 247,723,415          $ 437,277,218
                              -----------      -----------------      -----------------
                              -----------      -----------------      -----------------
------------------
(1) The carrying value equals the purchase price paid by the Company to
    originate the receivables.
 
(2) The maturity value equals the sum of all future payments to be received
    under a deferred payment obligation.
 
     MFC's level of origination of JUA/MTF settlements in recent quarters has
fallen in tandem with the decreasing supply of deferred claims. In addition, the
Company does not expect the JUA and MTF to announce any new deferral programs in
the near future. Since inception, the Company has also purchased, in the

aggregate, claims against the City of Philadelphia and Southeastern Pennsylvania
Transportation Authority with maturity values of approximately $929,000 and $1.7
million, respectively. The Company does not expect that originations of these
claims will have a material impact on the Company's financial condition or
results of operations in 1997.
 
     The Company has originated 11.6% and 11.2% of its portfolio of structured
settlement receivables from residents of California and New York, respectively,
and only three other states represent the source of in excess of five percent of
its portfolio of structured settlement receivables. The deferred payment
obligations of the JUA/MTF purchased by the Company were all originated in the
State of New Jersey.
 
                                       39
The following table shows certain information with regard to the
distribution of structured settlement originations through September 30, 1997
based on A.M. Best Ratings of Annuity Providers.
 
               DISTRIBUTION OF ORIGINATIONS BY A.M. BEST RATINGS
 
                                         PERCENT
                                         OF TOTAL
                                       ORIGINATION
                            RATING        PRICE
                            -------    ------------
                            A++....         24.7%
                            A+.....         45.4%
                            A......         18.1%
                            A-.....          5.2%
                            B++....          0.0%
                            B+.....          0.2%
                            F......          3.1%
                            U......          3.3%
                                       ------------
                                           100.0%
 
     Only two Annuity Providers represent in excess of 10% of the Company
originations based on carrying value, one of which is rated 'A++' and the other
is rated 'A+.'
 
MARKETING AND CUSTOMER SERVICE
 
     The Company markets its structured settlement business through a variety of
channels. Newspaper and television advertising is used to publicize the
Company's services to the broad population of claimants who may require the
Company's services. The Company has developed a comprehensive national
television advertising campaign that the Company believes helps to differentiate
it from its competitors. From March 1996 through September 1997, the Company
broadcast approximately 88,000 thirty-second television commercials nationwide.
 
     The Company utilizes a proprietary call-tracking system that allows it to
trace the origin of each inbound call by geographic market, estimate the
approximate marketing costs incurred to generate the call and track the progress

of each file arising from the call to eventual funding or termination. The
Company's compensation policies for originations personnel rely heavily on
performance bonuses.
 
     The Company also markets directly to referral sources such as attorneys and
bankruptcy and estate trustees. The Company maintains contact with these sources
by a mix of outbound telemarketing, company sponsored newsletters and
advertising in trade and professional magazines. As an example of its successful
marketing to attorneys, the Company is the only organization to receive the
endorsement of ATLA-NJ in connection with its settlement funding programs. The
Company also seeks to increase awareness of the Company's funding products among
attorneys and other professionals and their clients by publishing and
distributing a newsletter named The National Funding Chronicle.
 
     Company personnel have also sought to increase the profile of the Company
among targeted groups by publishing articles in legal and other specialty
publications and making presentations to meetings of local bar associations and
trial lawyers' groups and other professional and business gatherings.
 
UNDERWRITING
 
  The Origination Process
 
     The Company originates substantially all of its receivables using its own
trained personnel as opposed to outside brokers. The Company has two separate
divisions that are involved in the funding process, the Originations Group
located in Fort Lee, New Jersey and the Underwriting Operations
 
                                       40
Group located at the Company's corporate headquarters in Philadelphia,
Pennsylvania. This physical separation of the groups and their clearly
delineated responsibilities provide the Company with an effective checks and
balances system. The 175-member Originations Group establishes the initial
contact with the claimant but has no power to execute a transaction. Meanwhile,
the 17-member Underwriting Operations Group processes and executes transactions
but does not initiate business.
 
     The origination process starts when a claimant or a broker calls the
Company and ends with the execution of legal documentation and the disbursement
of funds. The Company's policies prohibit personnel from 'cold calling'
prospective claimants in connection with structured settlement originations. The
Company's first contact with a prospective claimant is always initiated by the
claimant or a referral source. The Originations Group includes an in-house
advertising agency as well as a 200-seat telemarketing call center with both
inbound and outbound capacity equipped with predictive dialing technology.
 
     The Company's use of its own personnel (as opposed to purchasing claims
through brokers) offers significant operational advantages. Minimizing reliance
on the broker community permits the Company to maintain more control of its
origination process. Broker-generated originations have fallen to less than five
percent of monthly production largely due to the Company's successful direct
marketing efforts. The Company relies on its highly trained sales force to
handle incoming claimant inquiries, provide customer service and thereby

increase the acquisition of high-quality receivables.
 
     The Originations Group is primarily responsible for gathering the
information from the claimant that is necessary for the Company to determine
whether the claimant has an asset that qualifies for funding and whether the
claimant has a real need for the Company's funding products. A claimant who
cannot supply appropriate evidence of the existence of an annuity contract that
names the claimant as the beneficiary of the policy, as well as appropriate
evidence of the settlement agreement giving rise to the receivable, or whose
financial profile does not make the claimant a logical candidate for funding is
rejected by trained staff member without the need of further review.
 
     Once a claimant is qualified, the account representative sends the file to
a staff member responsible for pricing, who analyzes the funding requirements of
the claimant, the structure of payments due the claimant and the Company's
return objective and then presents alternative funding choices to the claimant.
To meet the claimant's funding requirements, the Company may propose buying only
certain scheduled payments or may propose buying varying portions of each
scheduled payment. These alternatives are presented to the claimant, who then
makes a decision as to which structure best meets his or her requirements. The
Company establishes a direct relationship with its customers which often lead to
'continuations.' Continuations occur when claimants sell the Company a portion
of their payments due under the structured settlement and subsequently sell
another portion of their payments at a later time. Continuations give the
Company the opportunity to develop a history with a claimant prior to making
additional purchases and, therefore, potentially minimize risk of loss.
 
  Contract Review and Processing
 
     Once the claimant chooses a funding option, the file is submitted to the
Underwriting Operations Group for detailed review. The Company's comprehensive
underwriting procedures are designed to minimize the risk of claimant fraud and
the resulting loss with respect to its receivables. The Company does not need to
employ traditional underwriting procedures designed to determine the credit
quality of the obligor since a majority of the structured settlement receivables
are funded by highly rated Annuity Providers. The most prominent fraud-related
risks inherent in the purchase, financing, or securitization of structured
settlements are (i) diversion of payments to addresses other than those of the
bank accounts controlled by the Company, (ii) competing creditor interests and
(iii) duplicative financing of the receivable in question. The Company's
underwriting objective is to obtain an unencumbered interest in the right to
receive payments from the structured settlements.
 
     The Company has established written underwriting standards to minimize the
frequency and severity of these types of fraud risks. The review process is
divided into separate stages, with each stage of review being the responsibility
of different staff members. Staff members at each stage of
 
                                       41
review have independent authority to reject an application. In the case of
structured settlements, the Company: (i) requires that the claimant retain an
attorney in good standing with the applicable state bar association; (ii)
conducts UCC, lien, and judgment searches against the claimant with whom the

Company is considering a transaction; (iii) accesses a database located at a
secure intranet web site that was created by the Company and several of its
competitors to identify quickly a claimant who is trying to sell his right to
receive payments more than once; (iv) obtains an 'estoppel' letter from
claimant's attorney confirming that the claimant agreed to assign payment rights
under the structured settlement knowingly and voluntarily after seeking the
advice of an attorney; (v) conducts taped exit interviews with claimants prior
to funding; (vi) completes review by in-house attorneys to ensure compliance
with eligibility criteria; and (vii) obtains confirmation from EDS that
settlement purchase agreements and other related documents are properly
executed.
 
     In 1995, the Company entered into an agreement with EDS, which in June 1997
was amended to increase its term to twenty years, pursuant to which the Company
delivers to EDS files with respect to each receivable the Company originates. As
a recipient of each file, EDS can track the Company's portfolio and
independently verify that the underwriting process for each receivable conforms
to the Company's standards. EDS also acts as 'back-up' servicer with respect to
both the Company's owned and serviced receivables.
 
COLLECTIONS
 
     The Company's five-member Collections Department is responsible for
monitoring any receivable for which a payment has not been received as expected,
and to take actions necessary to ensure collection. These instances include
circumstances when: (i) a payment is lost; (ii) a payment is not sent to the
proper address by the Annuity Provider or other obligor; (iii) a claimant has
diverted payment or otherwise compromised the Company's interest in a
receivable; (iv) the claimant seeks protection under the Bankruptcy Code; or (v)
the claimant is deceased.
 
     In the case of structured settlements, once a receivable has been referred
to the Collections Department, the Company investigates the cause of non-payment
and attempts to collect directly from the responsible party. The Company views
its first-level collection efforts as a 'rehabilitation' process. Administrative
delinquencies described in subparagraphs (i) and (ii) above are generally
quickly resolved by contacting the Annuity Provider responsible for the payment.
In these cases, the Company first works with the Annuity Provider to freeze
additional payments until it can be determined who is entitled to be paid. In
the event of actual diversion by the claimant, the Company's internal legal
staff initiates legal proceedings and seeks to obtain a judgment against the
claimant. Upon obtaining a judgment against the claimant, the Company serves
notice of such judgment on the Annuity Provider, and the Company subsequently
seeks to garnish the annuity payments and redirect them to the Company. If the
Annuity Provider is located in a jurisdiction different than the one in which
the judgment is obtained, the Company 'domesticates' the judgment in the
appropriate jurisdiction and garnishment process is then served on the Annuity
Provider. If the Company's efforts to garnish the annuity payments are
contested, the matter is referred to outside counsel. See 'Risk Factors --
Relationships with Annuity Providers.'
 
                                       42
The following table shows certain information with regard to the
delinquency history regarding the Company's receivables:
 
                          DEFAULT DELINQUENCY HISTORY
DECEMBER 31,                  JUNE 30,
                                                  --------------------------      ------------------
                                                  1994      1995       1996        1996        1997
                                                  ----      ----      ------      ------      ------
                                                                (DOLLARS IN THOUSANDS)
Structured Settlements:
  Defaulted receivables......................       --         2          34           6          71
  Defaulted payments.........................       --         4         146          33         321
  Carrying value of defaulted receivables....       --      $ 40      $1,313      $  151      $3,280
  Carrying value of defaulted payments.......       --      $  7      $  200      $   39      $  334
  Defaulted receivables as a percentage of
     portfolio...............................       --       0.8%        2.2%        0.7%        3.1%
 
Other Deferred Payment Obligations:
  Delinquent receivables.....................       --        13          20          16          10
  Carrying value of delinquent receivables...       --      $133      $  197      $  127      $   63
  Delinquent receivables as a percentage of
     portfolio...............................       --       0.3%        0.7%        0.3%        0.4%
The Company's other deferred payment obligations have had no charge-offs
since inception. The Company recorded a net charge-off of $610,000 of structured
settlement receivables for the six months ended June 30, 1997, 0.6% of its
average portfolio for such period.
 
SECURITIZATIONS
 
     In a securitization transaction, the Company sells a pool of structured
settlements to a securitization trust or other special purpose vehicle, which in
turn issues interests that are sold to investors. Payments on the securitized
receivables, less a servicing fee and certain related expenses, are made by the
special purpose vehicle to investors. The Company recognizes revenue in an
amount equal to the Gain on Sale when the receivables are sold to the special
purpose vehicle. The Company also retains a subordinated interest in the pool of
securitized receivables which is recorded as a Retained Interest on the
Company's balance sheet.
 
     The following table presents certain information with respect to the
Company's securitizations:
WEIGHTED AVERAGE    CREDIT
                                       OFFERING         PASS-THROUGH      RATING          OVER-
SECURITIZATION    DATE COMPLETED         SIZE             RATE (1)         (2)      COLLATERALIZATION
--------------  ------------------   -------------    ----------------    ------    -----------------
1997-1........  June 13, 1997        $70.8 million           7.8%           A2/A            16%
 
1997-A........  September 30, 1997   $31.0 million           7.2%           A2/A            16%
                October 1, 1997      $41.0 million           7.2%           A2/A            16%
------------------
(1) Senior Security only.
 
(2) Rating from Moody's and Duff & Phelps, respectively.
 
     The Company acts as the master servicer of the securitized receivables for
which it receives a fee equal to one percent of the average discounted balance
of the securitized receivables on each monthly distribution date. See 'Risk
Factors,' 'Management's Discussion and Analysis of Financial Condition and
Results of Operations' and '--Servicing Operations.'
 
     As of October 3, 1997, the majority of the approximately $30.0 million in
structured settlement receivables on the Company's balance sheet did not meet
the eligibility criteria of the recent securitizations. These receivables
include originations from Notice States, from Illinois and payment
 
                                       43
rights arising from workers' compensation awards. The Company does not
anticipate securitizing these receivables and presently intends to hold them to
maturity.
 
SERVICING OPERATIONS
 
     The Company has the administrative capacity to manage all aspects of the
servicing of its owned and serviced receivables. The Company maintains a
detailed computerized data base which lists payment due dates with respect to
all owned and serviced receivables. Any payment which is not received on time by
the Company is promptly investigated by the Company's Underwriting Operations
Department. To the extent such non-payment or delay in payment is unresolved or
is suspected of being the result of claimant fraud, such receivable is turned
over to the Company's Collections Department for further action.
 
     In addition, the Company acts as the master servicer with respect to its
securitized receivables. As master servicer, the Company is obligated to post
payments, produce reports, and allocate payments for the benefit of certificate
holders. In consideration of its services, the Company collects a servicing fee
equal to one percent of the aggregate receivables balance at the end of each
month. The Company's servicing capacity is supported by EDS, which maintains
detailed computer records pertaining to each of the Company's owned and managed
receivables in its role as 'back-up' servicer.
 

     In connection with its monitoring responsibilities, the standard operating
procedures of the Underwriting Operations Department require placing a telephone
call to an applicable Annuity Provider before an irregularly-scheduled payment
is due in order to make sure that the address for the payment is a lockbox
controlled by the Company. As monthly payments tend to be smaller than non-
monthly payments, no such calls are made to confirm payment instructions with
respect to such receivables. Instead, the Company relies on its ability to
closely track scheduled payments and to initiate rapid enforcement action in the
case of any non-payment due to claimant fraud.
 
COMPETITION
 
     The secondary market for deferred payment obligations is currently highly
fragmented. In the market for structured settlements, the Company currently
experiences competition from two main groups: specialty finance companies and
independent brokers. The Company also experiences competition from individual
brokers and networks of brokers through whom some of the Company's direct
funding competitors originate much of their business. Because the Company
originates substantially all of its receivables by its retail originations
infrastructure, independent brokers are more likely to broker claims they
identify to the Company's funding-company competitors than they are to refer
them to the Company. In the future, the Company could face competition from a
wide variety of financial services providers, including commercial banks, credit
unions, savings and loans and other consumer and commercial lending
institutions. Many of these existing and potential competitors in the financial
services business are substantially larger and have more capital and other
resources than the Company. The Company believes that it competes for business
based upon the quality of its services, convenience and turnaround time in the
funding process, availability of funding options and price. See 'Risk Factors --
Competition.'
 
INFORMATION TECHNOLOGY
 
     As part of its ongoing effort to increase efficiency, the Company has
recently installed a call center system combining voice-data integration,
predictive dialing and call and contact management software. The system provides
management with the power to change or update capabilities without the need for
costly customized software code due to its open-architecture design and
easy-to-use application-building software. In addition, the Company purchased a
new general ledger system and upgraded substantially all of its computer
hardware within the last year. The Company intends to continue to look for ways
to improve efficiencies through automation and improved information technology.
The Company believes that its information systems have all capabilities that are
required
 
                                       44
to handle the change of the century in a standard and accurate manner, including
any data management problems related to the year 2000.
 
PROPRIETARY RIGHTS AND LICENCES
 
     The Company has applied for federal trademark protection for its company
name and logo, the name of its newsletter, The National Funding Chronicle, and

the slogan 'An American Financial Rescue.' Although the Company has not received
any response from the Patent and Trademark Office, and does not expect any
adverse office action on the application, there is no assurance that such
trademarks will be issued in a timely fashion, if at all.
 
GOVERNMENT REGULATION AND LEGISLATION
 
     Although in most states the Company's business is currently not subject to
significant regulation, the Company monitors the progress of regulation and
legislation in each state in which it acquires deferred payment obligations.
Because the business of originating rights to receive payment from structured
settlements has only developed recently, the number of new regulatory
initiatives may increase in the future. For example, the Illinois legislature
recently passed a statute that takes effect on January 1, 1998 that will require
that any assignment of a structured settlement be approved by a court having
jurisdiction over the underlying claim and will prohibit an Annuity Provider
from mailing payments to any party other than the claimant without such court
approval. The Illinois law does not currently specify the standards on which
courts would grant approvals of assignments or the process by which such
approval should be sought. Because of the uncertainty associated with the
Illinois law, the Company did not securitize any receivables purchased from
claimants in Illinois in its most recent securitization.
 
     The Company believes that the pressure on governments to regulate purchases
of structured settlements and other deferred payment obligations will grow as
the market continues to attract new entrants. The Company has led in the
formation of the National Association of Settlement Purchasers ('NASP'), a trade
group, through which it will work to influence the shape of new laws and
regulations to minimize the adverse impact of such legislation. Although the
Company believes that NASP efforts to promote a favorable regulatory environment
will be successful, the ultimate impact of future laws and regulations cannot be
determined. Accordingly, there is no assurance that new regulatory and
legislative initiatives will not have a material adverse effect upon the
Company's financial condition and results of operation. See 'Risk Factors --
Regulation and Legislation.'
 
LEGAL PROCEEDINGS
 
     The Company initiates legal proceedings in the ordinary course of its
business to collect delinquent payments due to the Company under the terms of
structured settlement purchase agreements entered into with claimants. The goal
of these actions is to obtain a judgment against the claimant and enforce the
judgment by seeking garnishment of payments made by Annuity Providers under the
annuity contracts. See 'Business -- Collections.' None of these proceedings,
considered separately, is material to the Company's business.
 
     Some Annuity Providers, however, have contested the Company's garnishment
actions, by raising a number of claims, allegations or defenses in their
responsive pleadings. The responses typically raise one or more of the following
issues: (i) contractual provisions in the settlement agreements or annuity
contracts prohibit assignment, encumbrance or garnishment of the scheduled
payments; (ii) the settlement purchase agreement between the Company and the
claimant is unenforceable because of fraud, collusion or misrepresentation by
the claimant and the Company; (iii) scheduled payments are exempt from

garnishment under various states' laws regarding insurance contracts and annuity
contracts; and (iv) certain judgments entered against garnishees by the court
clerk or prothonotary should be stricken because such clerk or prothonotary
exceeded its statutory authority. The Company has vigorously contested, and
expects to continue to contest, these claims, allegations and defenses when they
are raised by Annuity Providers. Although to date none of the defenses to the
Company's
 
                                       45
garnishment actions brought by Annuity Providers have been successful, to the
extent that a court would accept the validity of such defenses, the collection
efforts of the Company could be materially adversely affected. The Company was
recently served with a complaint by an Annuity Provider that sought a
declaration that such Annuity Provider is not obligated to make scheduled
payments directly to the Company. Although the amount in issue in this
litigation is not material to the Company's business, if the Annuity Provider
were to prevail, other courts could rely on the conclusions of such court and
make it more difficult for the Company to collect payments under structured
settlement receivables. See 'Risk Factors -- Relationships with Annuity
Providers.'
 
     The Company is also party to two actions initiated by claimants, neither of
which is material to the Company.
 
EMPLOYEES
 
     As of October 1, 1997, the Company had approximately 200 employees. None of
the Company's employees is represented by a labor union. The Company believes
that its relations with its employees is good.
 
PROPERTIES
 
     The Company's headquarters and underwriting operations are located in
16,043 square feet of leased office space in Philadelphia, Pennsylvania, its
acquisitions and marketing operations are conducted from a 21,520-square foot
leased facility in Fort Lee, New Jersey and SSC leases shared office space in
Wilmington, Delaware. The leases for the Philadelphia and New Jersey facilities
expire in January 2003 and March 2002, respectively, with the Company having
options with respect to additional space in both locations. With this additional
space, the Company believes its existing facilities are adequate for its current
needs, but that additional space will be required by December 1998.
 
                                       46
MANAGEMENT
 
EXECUTIVE OFFICERS AND DIRECTORS
 
     The executive officers and directors of the Company are as follows:
 
NAME                           AGE  POSITION
-----------------------------  ---  --------------------------------------------

Gary Veloric.................  37   Chairman of the Board of Directors
James D. Delaney.............  46   President, Chief Executive Officer and
                                      Director
Michael B. Goodman...........  35   Executive Vice President, Chief Operating
                                      Officer and Director
Andrew S. Hillman............  45   Senior Vice President, General Counsel and
                                      Secretary
James J. O'Malley............  46   Vice President and Chief Financial Officer
Edward S. Stone..............  35   Director
Gerald E. Bisbee, Jr.........  55   Director
Philip J. Kendall............  68   Director
Anthony C. Salvo.............  54   Director
 
     GARY VELORIC serves as the Chairman of the Board of Directors of the
Company. Since founding JGW in 1991, Mr. Veloric has served as a director and in
various capacities as an officer of each of JGW and the General Partners, most
recently as Chairman and, until August 1997, as Chief Financial Officer of each
entity. From 1983 until May 1992, Mr. Veloric served as Senior Vice President of
Development for Geriatric and Medical Companies, Inc., a leading provider of
long-term care based in Philadelphia, Pennsylvania ('GeriMed'). Mr. Veloric also
served as a director of GeriMed.
 
     JAMES D. DELANEY serves as the President and Chief Executive Officer and a
director of the Company. Since co-founding JGW with Mr. Veloric in 1991, Mr.
Delaney has served as a director and in various capacities as an officer of each
of JGW and the General Partners, most recently as President and Chief Executive
Officer of each entity.
 
     MICHAEL B. GOODMAN serves as the Executive Vice President and Chief
Operating Officer and a director of the Company. From March 1994 until October
1997, Mr. Goodman served as Vice President of Marketing of the Company, at which
time Mr. Goodman helped develop the Company's marketing strategy and
originations operations. From 1991 until February 1994, Mr. Goodman was an
independent investor and business consultant.
 
     ANDREW S. HILLMAN serves as the Company's Senior Vice President, General
Counsel and Secretary since joining the Company in October 1997. From September
1994 until he joined the Company, Mr. Hillman was a shareholder at Silverman
Coopersmith Hillman & Frimmer, a Professional Corporation, a law firm based in
Philadelphia, PA, where he specialized in banking and corporate law and
represented the Company in a number of transactions and in certain corporate and
partnership matters. From 1986 until September 1994, Mr. Hillman was a partner
at the law firm of Cohen Shapiro Polisher Shiekman and Cohen in Philadelphia,
Pennsylvania.

 
     JAMES J. O'MALLEY serves as the Company's Vice President and Chief
Financial Officer. From August 1997, Mr. O'Malley served as Chief Financial
Officer of JGW and the General Partners. From 1989 until June 1997, Mr. O'Malley
served in various financial capacities with GeriMed and served as its Vice
President and Chief Financial Officer from June 1992 until it was acquired by
Genesis Health Ventures, Inc. in October 1996.
 
     EDWARD S. STONE serves as a director of the Company. From March 1997 until
October 1997, Mr. Stone served as outside General Counsel to the Company. Mr.
Stone began offering legal and other consulting services to the Company in May
1995 and billed the Company for such services through his legal practice, the
Law Offices of Edward S. Stone, and through Stone International LLC, a
consulting
 
                                       47
firm of which Mr. Stone is the principal. Until May 1995, Mr. Stone was a
principal of Settlers' Funding LLC ('Settlers' Funding'), a company that
purchased settlement obligations of the JUA and MTF in competition with the
Company, at which time Mr. Stone ceased his involvement in management of that
firm's affairs. Settlers' Funding ceased business operations in June 1995.
 
     GERALD E. BISBEE, JR. has consented to become a member of the Company's
Board of Directors upon the completion of the Offering. Since January 1990, Mr.
Bisbee has been the Chairman and Chief Executive Officer of APACHE Medical
Systems, Inc., a publicly traded firm specializing in healthcare decision
support services. Mr. Bisbee also is a director of the Cerner Corporation, a
publicly traded software company located in Kansas City, Missouri, and is a
director of Yamaichi, a registered investment company.
 
     PHILIP J. KENDALL has consented to become a member of the Company's Board
of Directors upon the completion of the Offering. Since April 1991, Mr. Kendall
has been Chairman of the Board of Directors of Global Financial Press, a leading
financial printing and document imaging firm ('Global'). Global is providing
financial printing services to the Company in connection with the Offering.
 
     ANTHONY C. SALVO has consented to become a member of the Company's Board of
Directors upon the completion of the Offering. In May 1995, Mr. Salvo co-founded
and became a principal of Rai Capital LLC, a private investment firm located in
New York, NY. From 1988 until December 1994, he was a Vice President with Dillon
Read & Co., Inc., an investment bank that was based in New York, NY.
 
CLASSIFIED BOARD; COMMITTEES
 
     The Company's Board of Directors is divided into three classes. Each class
holds office until the third annual meeting for the election of directors
following the election of such class, except that the initial terms of the Class
I, Class II and Class III directors expire in 1998, 1999 and 2000, respectively.
Messrs. Goodman and Stone are Class I directors, Mr. Veloric is a Class II
director and Mr. Delaney is a Class III director. It is expected that upon the
completion of the Offering, Mr. Bisbee will be a Class I director, Mr. Kendall
will be a Class II director and Mr. Salvo will be a Class III director.
 

     The Board of Directors intends to establish an Executive Committee, a
Compensation Committee, an Audit Committee and a Corporate Compliance Committee.
The Executive Committee is authorized to exercised the power of the Board of
Directors between meetings. However, the Executive Committee may not: (i) amend
the Certificate of Incorporation or the By-laws of the Company, (ii) adopt an
agreement of merger or consolidation, (iii) recommend to the stockholders the
sale, lease, or exchange of all or substantially all of the Company's property
and assets, (iv) recommend to the stockholders a dissolution of the Company or
revoke a dissolution, (v) elect a director, or (vi) declare a dividend or
authorize the issuance of stock. The Compensation Committee will determine
salaries and bonuses and other compensation matters for officers of the Company,
determine employee health and benefit plans, and administer the Company's 1997
Stock Incentive Plan and any similar plans created in the future. The Audit
Committee will recommend the appointment of the Company's independent public
accountants and will review the scope and results of audits, internal accounting
controls and tax and other accounting related matters. The Corporate Compliance
Committee will ensure that the Company complies with all applicable laws and
regulations.
 
DIRECTOR COMPENSATION
 
     Each of the Company's non-employee directors will be entitled to receive an
annual fee of $10,000 for service as a director and a fee of $1,000 for each
meeting of the Board of Directors or any committee thereof such director
attends. In addition, each director will be entitled to reimbursement of travel
and other expenses incurred in connection with their service as directors. Each
director, other than the Principals, will also receive options to purchase
10,000 shares of Common Stock concurrently with the completion of the Offering
exercisable at the initial public offering price that will vest on the six-month
anniversary of the Offering.
 
                                       48
EXECUTIVE COMPENSATION
 
     The following table sets forth certain information with respect to
compensation paid or accrued by the Company for fiscal 1996 to the Company's
Chief Executive Officer and to the four most highly compensated executive
officers of the Company whose salary and bonus for fiscal 1996 exceeded $100,000
for all services rendered in all capacities to the Company (the 'Named Executive
Officers'):
 
                         SUMMARY COMPENSATION TABLE(1)
ANNUAL COMPENSATION
                                                           -------------------       ALL OTHER
              NAME AND PRINCIPAL POSITION                   SALARY      BONUS     COMPENSATION(2)
--------------------------------------------------------   --------    -------    ---------------
James D. Delaney .......................................   $185,256      -0-         $  24,235
  President and Chief Executive Officer
Gary Veloric ...........................................   $182,814      -0-         $  24,235
  Chairman of the Board of Directors
Michael B. Goodman .....................................   $186,288      -0-         $ 211,735
  Executive Vice President and Chief Operating Officer
------------------
(1) The compensation reported in the above table was not paid by the Company but
    by JGW and the Partnerships. For a description of the relationships between
    the Partnerships and JGW prior to the formation of the Company, see 'The
    Reorganization and Change in Tax Status.'
 
(2) Consists of commissions of $24,235 paid to each of the Principals as
    compensation for services provided in connection with organizing the
    business of the Partnerships and approximately $189,500 paid to Mr. Goodman
    by MFC as a consulting fee. Amounts do not include $223,000 distributed to
    each of Messrs. Delaney and Veloric by MFC and $42,000 distributed to each
    of the Principals by SSC in 1996. For additional information regarding
    payments made by the Partnerships to the Named Executive Officers and
    others, see 'Distributions and Dividend Policy' and 'The Reorganization and
    Change in Tax Status.'
 
EMPLOYMENT AGREEMENTS
 
     In October 1997, the Company entered into employment agreements with the
Principals, each for an initial term of three years. Under the terms of the
employment agreements, the Company will pay each of the Principals a base salary
of $195,000 per year, subject to annual cost of living adjustments and periodic
increases at the discretion of the Compensation Committee of the Board of
Directors. Each year, the executives are entitled to receive a formula bonus in
an amount ranging from 50% to 200% of the executives' base salary. The
percentage used to calculate the amount of the bonus increases on a
straight-line basis with the level of 'return on average equity' (as defined in
the appropriate employment agreement) achieved by the Company for the previous

year. Under the formula, the executives earn no bonus if ROAE is less than 15%
and achieve a maximum bonus of 200% of base salary if the ROAE equals or exceeds
35%. Each of the Principals shall be entitled to participate generally in the
Company's employee benefit plans, including the 1997 Stock Incentive Plan. Under
the terms of the employment agreements each of the Principals will be awarded
options to purchase 50,000 shares of Common Stock upon the completion of the
Offering at the initial public offering price and will vest in four equal annual
installments beginning on the first anniversary of the completion of the
Offering.
 
     Also in October 1997, the Company entered into an employment agreement with
Mr. Hillman for an initial term of one year. Under the terms of this employment
agreement, the Company will pay Mr. Hillman a base salary of $170,000 per year,
subject to annual cost of living adjustments and periodic increases at the
discretion of the Compensation Committee of the Board of Directors. Mr. Hillman
will also be entitled to a formula bonus and to participate generally in the
Company's employee benefit plans on the same terms as the Principals. Mr.
Hillman's employment agreement also provides for an award under the 1997 Stock
Incentive Plan of options to purchase 50,000 shares of Common Stock upon the
completion of the Offering and will vest on the same schedule as the options
 
                                       49
to be granted to the Principals, except that upon Mr. Hillman's resignation for
'good reason,' the options shall vest immediately.
 
     According to each employment agreement, if the executive is terminated 'for
cause,' which definition generally includes termination by the Company due to
the executive's willful failure to perform his duties under the employment
agreement, the executive's personal dishonesty, or the executive's breach of his
fiduciary duties or any other provisions of his respective employment agreement,
then the Company is obligated to pay the executive so terminated only his base
salary up to his termination 'for cause.' If any of the Principals are
terminated without cause, or the executive leaves for 'good reason,' the Company
is obligated to pay such executive his base salary, bonus and benefits for the
remaining term of his employment agreement or, in the case of Mr. Hillman, the
greater of the remaining term of his Agreement or six months from the date of
termination. As used in the employment agreements, 'good reason' includes the
executive officer's resignation due to a breach by the Company of his employment
agreement or a change of control, the Company must pay such executive officer
his salary, bonus and benefits for the greater of the remaining term of the
employment agreement and one year after such termination.
 
1997 STOCK INCENTIVE PLAN
 
     Under the Company's 1997 Stock Incentive Plan (the 'Plan'), a variety of
awards, including stock options, stock appreciation rights and restricted and
unrestricted stock grants may be made to the Company's employees, officers,
consultants and advisors who are expected to contribute to the Company's future
growth and success. 1,500,000 shares of Common Stock are reserved for issuance
under the Plan and the maximum number of shares for which options, SARs or other
rights may be granted to any single individual during one year is 500,000. The
Compensation Committee will administer the Plan and determine the price and
other terms upon which awards shall be made. Stock options may be granted either

in the form of incentive stock options or non-statutory stock options. The
option exercise price of incentive stock options may not be less than the fair
market value of the Common Stock on the date of the grant. While the Company
currently anticipates that most grants under this Plan will consist of stock
options, the Company may grant stock appreciation rights, which represent rights
to receive any excess in value of shares of Common Stock over the exercise
price; restricted stock awards, which entitle recipients to acquire shares of
Common Stock, subject to the right of the Company to repurchase all or a part of
such shares at their purchase price in the event that the conditions specified
in the award are not satisfied; or unrestricted stock awards, which represent
grants of shares to participants free of any restrictions under the plan.
Options or other awards that are granted under the Plan but expire unexercised
are available for future grants. It is expected that prior to the completion of
the Offering options to purchase 650,000 shares of Common Stock will be granted
under the Plan to the employees, officers and directors with an exercise price
equal to the initial public offering price per share. No options to purchase
Common Stock have been granted to date.
 
                                       50
401(K) SAVINGS PLAN
 
     In January 1997, the Company established a 401(k) Savings Plan (the '401(k)
Plan'), which is intended to comply with Sections 401(a) and 401(k) of the Code,
and the applicable provisions of the Employee Retirement Income Security Act of
1974, as amended. Amounts contributed to the 401(k) Plan are held under a trust
intended to be exempt from income tax pursuant to Section 501(a) of the Code.
All employees of the Company that have completed at least one year of service
and who are at least 21 years old are eligible to participate in the 401(k)
Plan. Participating employees are entitled to make pre-tax contributions to
their accounts, subject to certain maximum annual limits imposed by law ($9,500
in 1996), and certain other limitations.
 
COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION
 
     Prior to the Offering, the Company has not had a compensation committee or
any other committee of the Board of Directors performing similar functions.
Prior to the Offering, decisions concerning executive compensation were made by
the Principals, all of whom were, and continue to be, executive officers of the
J.G. Wentworth Affiliated Companies and participated in deliberations regarding
executive officer compensation. The Board of Directors of the Company has
established a Compensation Committee. See '-- Classified Board; Committees.'
 
     None of the executive officers of the Company currently serves on the
compensation committee of another entity or any other committee of the board of
directors of another entity performing similar functions. For other related
party transactions, see 'Certain Relationships and Related Party Transactions.'
 
                                       51
PRINCIPAL AND SELLING STOCKHOLDERS
 
     The following table sets forth certain information regarding the ownership
of the Common Stock expected as of the completion of the Reorganization and as
adjusted to reflect the Offering by: (i) each of the Company's Named Executive
Officers and directors; (ii) all of the Company's executive officers and
directors as a group; (iii) each person known to the Company to own more than
five percent of the outstanding shares of Common Stock and (iv) each Selling
Stockholder. The information set forth in the table assumes that the initial
public offering price of the Common Stock will be $15.00 per share (the
mid-point of the price range set forth on the cover page of this Prospectus) and
that an aggregate 12,466,367 shares will be issued to Existing Stockholders in
the Reorganization. The calculation of number of shares to be issued to the
Existing Stockholders is governed by the provisions of the Contribution
Agreement. See 'The Reorganization and Change in Tax Status.'
SHARES
                                 BENEFICIALLY                             SHARES BENEFICIALLY
                              OWNED PRIOR TO THE                            OWNED AFTER THE
                                   OFFERING         NO. OF                      OFFERING
                              ------------------    SHARES     ------------------------------------------
NAME OF BENEFICIAL OWNER(1)    NUMBER     PERCENT   OFFERED          NUMBER                 PERCENT
---------------------------   ---------   ------    -------    -------------------    -------------------
James D. Delaney...........   2,687,313    21.6%    311,165              2,376,148            14.4%
 
Gary Veloric...............   2,687,313    21.6%    311,165              2,376,148            14.4%
 
Michael B. Goodman.........   2,662,223    21.4%    286,075              2,376,148            14.4%
 
Edward S. Stone............     975,731     7.8%     83,333                892,398             5.4%
 
Alpha Nickelberry..........     526,895     4.2%     45,000                481,895             3.0%
 
ING........................   2,927,192    23.5%    250,000              2,677,192            16.3%
 
All Directors and executive
  officers as a group (9
  persons).................   9,012,580    72.3%    991,738              8,020,842            48.7%
------------------
(1) The address of each of Messrs. Delaney, Veloric, Goodman, Stone and
    Nickelberry is c/o the Company, The Graham Building, 15th and Ranstead
    Streets, 10th Floor, Philadelphia, Pennsylvania 19102. ING's address is 135
    East 57th Street, New York, New York 10022.
 
                                       52
CERTAIN RELATIONSHIPS AND RELATED PARTY TRANSACTIONS
 
RELATIONSHIPS WITH PRINCIPALS
 
     Since founding JGW, Messrs. Delaney and Veloric have operated a number of
businesses not related to the business of the Company both through JGW and
through other corporations and partnerships under their joint control. Since
1991, Messrs. Delaney and Veloric have engaged in a merchant banking business
that specializes in the healthcare industry, performing through JGW and other
entities such activities as advising on strategic transactions and financings
and providing mortgage brokerage services (collectively the 'Healthcare
Business'). In connection with this business, Messrs. Delaney and Veloric formed
J.G. Wentworth Securities, Inc. ('Securities'), a registered broker-dealer in
compliance with the rules of the National Association of Securities Dealers,
Inc. and applicable federal and state regulatory authorities. In October 1996,
the activities related to the Healthcare Business conducted by JGW were assigned
to two partnerships controlled by Messrs. Delaney and Veloric, J. G. Wentworth
Mortgage Funding, L.P. ('Mortgage Funding') and J. G. Wentworth Partners, L.P.
('Partners LP'). Since their formation, Mortgage Funding and Partners LP have
paid management fees to JGW in consideration for the services performed by
Company personnel and for the Company's technological and administrative
resources. JGW billed Partners LP $122,000 in 1996 and an additional $345,000
for the six months ended June 30, 1997 for management and related services and
billed Mortgage Funding a de minimis amount for such services during the same
periods. Since its inception, Securities has not paid any management fees to JGW
or any of the other JGW Affiliated Companies.
 
     Messrs. Delaney and Veloric intend to divest themselves of all interests in
Securities, Mortgage Funding and Partners LP and cease active participation in
the Healthcare Business prior to completion of the Offering; however, if a
suitable buyer is not found such divestment may be delayed. After such
divestiture, all services performed by the Company on behalf of Securities,
Mortgage Funding and Partners LP will be performed under the terms of written
agreements approved by the Company's non-employee directors. In addition, the
Company will enter into agreements with Securities, Mortgage Funding and
Partners LP to permit their use of the Company's name for a limited period after
the completion of the Offering. The Company expects that in connection with such
divestitures, the Company, for the benefit of the purchasers, will make certain
representations and warranties and indemnities and other covenants customary in
transactions of such type. At June 30, 1997, Partners LP was indebted to the
Company for approximately $100,000 in management fees billed by JGW, which
amount represented the largest balance of such fees remaining unpaid since such
fees were charged. All such amounts are booked as related party receivables by
JGW and do not bear interest. At September 30, 1997, the remaining unpaid
balance of such indebtedness was $54,000. The Company expects that all unpaid
balances will be paid in full prior to completion of the Offering.
 
     In January 1996, JGW distributed to a partnership controlled by Messrs.
Delaney and Veloric all of its rights related to its development of a drug
formulary system, its 7.0% interest in a nursing home located in New Jersey and
its rights to be paid an investment banking fee of approximately $200,000. In
April 1996, the Company acquired rights to produce a musical recording and
shortly thereafter transferred such rights to J.G. Wentworth Short-term Funding

Corp., a corporation controlled by the Principals ('Short-term Funding'), for a
payment of $83,000. Prior to completion of the Offering, Short-term Funding will
sell to the Company, through SSC, its rights to payment under several lottery
claims and other financing transactions at their aggregate carrying value of
approximately $200,000. Mortgage Funding also originated a loan transaction
secured by royalty rights for musical recordings and publishing. Prior to
completion of the Offering, Mortgage Funding will transfer its rights under this
loan to the Company for $200,000, its net book value plus accrued interest.
 
     Certain minor personal transactions of the Principals have been conducted
through the offices of the Company. The Company maintained a record of personal
expenses paid through the Company and periodically the Principals reimbursed the
Company for past expenses or deposited personal funds with the Company to
finance anticipated expenses to be paid through the Company. Any indebtedness of
the Principals to the Company is booked as a related party receivable and does
not accrue interest. Neither
 
                                       53
Mr. Goodman nor Mr. Veloric has been indebted to the Company for a material sum
since January 1, 1994. In August 1996, the balance of Mr. Delaney's account
showed indebtedness of $124,000 to the Company, the largest balance of such
indebtedness outstanding since the beginning of 1994. At September 30, 1997, no
indebtedness of Mr. Delaney to the Company remains outstanding. The Principals
do not intend to continue the practice of conducting personal transactions
through the Company after completion of the Offering. In addition, the
Principals have personally guaranteed the repayment of all amounts borrowed
under the MFC Facility, which guarantee is expected to be released in connection
with the Offering.
 
RELATIONSHIP WITH EDWARD S. STONE
 
     In May 1995, Mr. Stone began to provide legal and business consulting
services to the Company. The Law Offices of Edward S. Stone, Mr. Stone's legal
practice, billed the Company an aggregate of $0, $21,490 and $127,904 in 1995,
1996 and the six months ended June 30, 1997, respectively. Mr. Stone also
provided business consulting services to the Company through Stone International
LLC for which such company received $79,792, $115,939 and $36,827 in
compensation in 1995, 1996 and the six months ended June 30, 1997, respectively.
After completion of the Offering, Mr. Stone will continue to offer consulting
services to the Company and shall receive an annual fee of $175,000 in lieu of
legal or other fees otherwise payable to his legal practice or other entities he
controls.
 
RELATIONSHIP WITH ING
 
     In connection with providing the SSC Facility, ING became a 25% limited
partner in SSC. After completion of the Offering, ING is expected to own 16.3%
of the outstanding Common Stock. An affiliate of ING acts as agent with respect
to the Credit Facilities for both MFC and SSC and acts as placement agent for
the securitizations. The Company paid ING a placement agency fee of $1.2 million
for the June 1997 securitization and a placement agency fee of $1.2 million for
the September and October securitizations. See 'Management's Discussion and
Analysis of Financial Condition and Results of Operations--Liquidity and Capital

Resources' and 'Underwriting.'
 
     ING has a right of first refusal to act as placement agent in connection
with future securitizations of structured settlement receivables of up to an
aggregate of $200.0 million. At October 3, 1997, ING had acted as placement
agent in connection with the securitization of an aggregate of $60.5 million.
Accordingly, ING retains a right of first refusal with respect to $139.5 million
in future securitizations.
 
OTHER RELATIONSHIPS
 
     Prior to joining the Company in October 1997, Mr. Hillman's law firm served
as outside legal counsel to the Company. For legal services, the Company paid
$168,000, $240,000 and $215,000 to Mr. Hillman's law firm in 1995, 1996 and the
nine months ended September 30, 1997.
 
TRANSACTIONS IN CONNECTION WITH THE FORMATION
 
     On the date of the Reorganization, pursuant to the terms of a contribution
agreement (the 'Contribution Agreement'), the Principals will contribute all of
their capital stock in JGW, SSC Management and the General Partners and the
Existing Stockholders will contribute 100% of their interests in the
Partnerships to the Company, in exchange for a number of shares of Common Stock
determinable pursuant to a formula set forth in the Contribution Agreement. The
Reorganization will occur immediately prior to the completion of the Offering.
The Common Stock issued pursuant to the Contribution Agreement will constitute
all of the outstanding stock of the Company prior to the completion of the
Offering. The total number of shares distributable to the Existing Stockholders
in the Reorganization will be 12,466,367.
 
     As a result of the Reorganization, JGW and the General Partners, each of
which will become a wholly owned subsidiary of the Company, will be fully
subject to federal and state income taxes, and the Company will record a net
deferred tax liability on its balance sheet. From their formation until the
Reorganization, JGW and the General Partners have been treated as S corporations
for federal income
 
                                       54
tax purposes and for certain state corporate income tax purposes. As a result,
the historical earnings of JGW and the General Partners have been taxed directly
to their respective stockholders at their individual federal and state income
tax rates. The amount of the deferred tax liability to be recorded as of the
date of termination of the S corporation status will result principally from
temporary differences between accounting and tax treatment of income earned from
finance receivables and Gain on Sale. The net deferred tax liability will be
recorded as a non-cash charge to the provision for taxes in the quarter in which
the Offering is completed. If the S corporation status of JGW and the General
Partners had been terminated as of June 30, 1997, the amount of the deferred tax
liability would have been approximately $6.2 million. See 'Risk
Factors--Possible Loss in Quarter; Variable Quarterly Earnings;'
'Capitalization' and 'Selected Combined Financial Data.'
 
     Since inception, JGW and the General Partners have paid approximately 92%

of their estimated taxable income, including an estimate for the six months
ended June 30, 1997 to the Principals as S corporation distributions
(approximately $1.2 million was distributed from January 8, 1991 through June
30, 1997). In September 1997, JGW made a distribution of $70,000. From June 30,
1997 through October 8, 1997 the Company distributed $2.1 million to the
Existing Stockholders and intends to distribute an additional $2.0 million to
the Existing Stockholders in October 1997. Such distributions were paid to the
Principals as distributions of a portion of JGW's and the General Partner's
earnings and to pay the Principals' taxes. On October 8, 1997, SSC distributed
$2.0 million to the Existing Stockholders and intends to distribute an
additional $2.0 million to the Existing Stockholders in October 1997. Since
inception through June 30, 1997, the Partnerships paid approximately $4.4
million to the Existing Stockholders. Prior to the Reorganization, JGW will
distribute an estimated $1.2 million Tax Distribution to the Principals. The Tax
Distribution represents the sum of approximately (i) $298,000 in taxes payable
at the applicable statutory rate by the Principals on the estimated net earnings
of JGW and the General Partners for the period from January 1, 1997 to November
30, 1997 and (ii) $939,000 in taxes payable at the applicable statutory rate by
the Principals on the estimated net profits of the Partnerships from January 1,
1997 to November 30, 1997.
 
     The Company, JGW, the General Partners and the Existing Stockholders have
entered into the Tax Agreement relating to their respective income tax
liabilities. Because JGW and the General Partners will be fully subject to
corporate income taxation after the termination of their S corporation status,
the reallocation of income and deductions between the period during which JGW
and the General Partners were treated as S corporations and the period during
which the Company, JGW and the General Partners will be subject to corporate
income taxation may increase the taxable income of one party while decreasing
that of another party. Accordingly, the Tax Agreement is intended to assure that
taxes are borne by the Company on the one hand and the Existing Stockholders on
the other only to the extent that such parties received the related income. The
Tax Agreement generally provides that the Company will indemnify the Existing
Stockholders against any liabilities of the Company after the Reorganization,
and the Existing Stockholders will indemnify the Company against any tax
liabilities of the Existing Stockholders prior to the date of the Reorganization
(in each case such indemnified amounts include interest and penalties and
related costs and expenses). The Company will also indemnify the Existing
Stockholders for all taxes imposed upon them as the result of their receipt of
an indemnification payment under the Tax Agreement. Any payment made by the
Company to the Existing Stockholders pursuant to the Tax Agreement may be
considered by the Internal Revenue Service or state taxing authorities to be
non-deductible by the Company for income tax purposes. The Tax Agreement also
provides that the Company will reimburse the Existing Stockholders for any taxes
that result from the disallowance of deductions taken by the Existing
Stockholders, the result of which is to permit the Company or JGW or the General
Partners to take such disallowed deductions after completion of the
Reorganization. None of the parties' obligations under the Tax Agreement are
secured, and, as such, there can be no assurance that the Existing Stockholders
or the Company will have funds available to make any payments which may become
due under the Tax Agreement. See 'The Reorganization and Change in Tax Status.'
 
                                       55
DESCRIPTION OF CAPITAL STOCK
 
     The authorized capital stock of the Company consists of 30,000,000 shares
of Common Stock, and 5,000,000 shares of preferred stock, $.01 par value (the
'Preferred Stock'). Upon giving effect to the Reorganization but before
completion of the Offering, the Company will have 12,466,667 shares of Common
Stock outstanding. Upon completion of the Offering, the Company will have
16,466,667 shares of Common Stock outstanding. No shares of Preferred Stock are
currently outstanding.
 
COMMON STOCK
 
     The holders of Common Stock are entitled to receive dividends, when and as
declared by the Board of Directors, out of funds legally available therefor and
to receive pro rata the assets of the Company legally available for distribution
upon liquidation after payment to holders of preferred stock having a
liquidation preference over the Common Stock. In addition, holders of Common
Stock are entitled to one vote per share on all matters voted on by stockholders
generally, including the election of directors, and do not have cumulative
voting rights. There are no preemptive, conversion or redemption rights
applicable to the shares of the Common Stock. Accordingly, holders of a majority
of the shares of Common Stock entitled to vote in any election of directors may
elect all of the directors standing for election. The currently outstanding
shares of Common Stock are, and the shares of Common Stock offered by the
Company hereby, upon issuance by the Company against receipt of the purchase
price therefor, will be, fully paid and non-assessable. The Company's
Certificate of Incorporation provides that any action requiring stockholder
approval, other than the election of directors, shall require the affirmative
vote of a majority of the outstanding shares of Common Stock.
 
PREFERRED STOCK
 
     The Board of Directors is empowered by the Company's Certificate of
Incorporation to designate and issue from time to time one or more classes or
series of Preferred Stock without any action of the stockholders. The Board of
Directors may fix and determine the relative rights, preferences and limitations
of each class or series so authorized. The issuance of, or the ability to issue,
the preferred stock could adversely affect the voting power and other rights of
the holders of the Common Stock or could have the effect of decreasing the
market price of the Common Stock or discouraging or making difficult any attempt
by a person or group to obtain control of the Company, including any attempt
involving a bid for the Common Stock at a premium over the then market price.
The Company does not presently contemplate the issuance of any Preferred Stock.
 
ANTI-TAKEOVER PROVISIONS
 
     The Company's classified Board of Directors and the authority of the Board
to issue Preferred Stock and to determine the price, rights, preferences and
privileges with respect to those shares without any further vote or action by
the stockholders of the Company could have the effect of delaying, impeding or
discouraging the acquisition of control of the Company in a transaction not
approved by the Board of Directors. The provision of the By-laws classifying the
Board of Directors may be repealed or amended by a vote of stockholders entitled

to cast 66 2/3% of the votes at a meeting of stockholders. In addition, the
Company may obtain stockholder approval for certain actions without calling a
meeting or soliciting proxies because the Certificate of Incorporation and the
Company's By-laws permit actions by written consent of the stockholders without
a meeting.
 
     The Company is subject to the provisions of Section 203 of the Delaware
General Corporation Law. In general, Section 203 prohibits a publicly held
Delaware corporation from engaging in a 'business combination' with an
'interested stockholder' for a period of three years after the date of the
transaction in which the person became an interested stockholder, unless the
business combination is approved in a prescribed manner or unless the interested
stockholder acquired at least 85% of the corporation's voting stock (excluding
shares held by certain designated stockholders) in the transaction in which it
became an interested stockholder. A 'business combination' includes mergers,
asset sales and other transactions resulting in a financial benefit to the
interested stockholder. Subject to certain
 
                                       56
exceptions, an 'interested stockholder' is a person who, together with
affiliates and associates, owns, or within the previous three years did own, 15%
or more of the corporation's voting stock.
 
LIMITATIONS OF LIABILITY; INDEMNIFICATION OF OFFICERS AND DIRECTORS
 
     The Company's Certificate of Incorporation and By-laws contain certain
provisions relating to the limitation of liability and indemnification of
directors and officers. The Company's Certificate of Incorporation provides that
directors of the Company may not be held personally liable to the Company or its
stockholders for monetary damages for a breach of fiduciary duty, except for
liability (i) for any breach of the director's duty of loyalty to the Company or
its stockholders, (ii) for acts or omissions not in good faith or which involve
intentional misconduct or a knowing violation of law, (iii) under Section 174 of
the Delaware General Corporation Law, relating to prohibited dividends,
distributions and repurchases or redemptions of stock, or (iv) for any
transaction from which the director derives an improper benefit. However, such
limitation does not limit the availability of non-monetary relief in any action
or proceeding against a director. In addition, the Company's Certificate of
Incorporation and By-laws provide that the Company shall indemnify its directors
and officers to the fullest extent authorized by Delaware law.
 
TRANSFER AGENT AND REGISTRAR
 
     The transfer agent and registrar for the Common Stock is ChaseMellon
Shareholder Services LLC.
 
                                       57
SHARES ELIGIBLE FOR FUTURE SALE
 
     Upon completion of the Offering, the Company will have 16,466,667 shares of
Common Stock outstanding. Of these shares, the 5,286,738 shares of Common Stock
sold in the Offering will be freely tradeable without restriction or
registration under the Securities Act. The remaining 11,179,929 shares of Common
Stock outstanding as of the date of this Prospectus are 'restricted securities'
as defined by Rule 144, all of which are held by the Selling Stockholders.
 
     In general, under Rule 144, a person who has beneficially owned shares for
at least one year, including an 'affiliate,' as that term is defined in the
Securities Act, is entitled to sell within any three-month period a number of
shares that does not exceed the greater of one percent of the then outstanding
shares of Common Stock (approximately 164,667 shares after the completion of the
Offering), or the average weekly trading volume during the four calendar weeks
preceding filing of notice of such sale, subject to certain requirements
concerning availability of public information, manner and notice of sale.
 
     In addition, affiliates must comply with the restrictions and requirements
of Rule 144, other than the one-year holding period requirement, in order to
sell shares of Common Stock which are not restricted securities. Under Rule
144(k), a person who is not an affiliate and has not been an affiliate for at
least three months prior to the sale and who has beneficially owned restricted
shares for at least a two year holding period may resell such shares without
compliance with the foregoing requirements.
 
     The Company, the Selling Stockholders, directors, executive officers and
certain other security holders of the Company, owning upon completion of the
Offering, in the aggregate, 11,179,929 shares of Common Stock, have agreed that,
they will not, directly or indirectly, offer, sell, offer to sell, contract to
sell, pledge, grant any option to purchase or otherwise sell or dispose (or
announce any offer, sale, offer of sale, contract of sale, pledge, grant of any
option to purchase or other sale or disposition) of any shares of Common Stock
or other capital stock of the Company or any securities convertible into, or
exercisable or exchangeable for, any shares of Common Stock, or other capital
stock of the Company, for a period of 180 days from the date of this Prospectus,
without the prior written consent of Prudential Securities Incorporated, on
behalf of the Underwriters, except that such agreement does not prevent the 
Company from granting additional options under the Company's stock option plans.
Prudential Securities Incorporated may, in its sole discretion, at any time and
without notice, release all or any portion of the securities subject to such
lock-up agreements.
 
     Upon completion of the Offering, it is expected that there will be 650,000
shares of Common Stock issuable upon exercise of options granted under the 1997
Stock Incentive Plan, which will vest in four equal annual installments
beginning on the first anniversary of the completion of the Offering. Pursuant
to the Underwriting Agreement, the Company has agreed not to file, at any time
prior to the date 180 days from the date of this Prospectus, a registration
statement under the Securities Act covering any of such shares. The Company,
however, intends to file a Form S-8 registration statement covering a portion of
these shares within one year from the date of this Prospectus. The shares
registered under such registration statement will be available for resale in the

open market upon the exercise of vested options, subject to Rule 144 volume
limitations applicable to affiliates.
 
     Prior to the Offering, there has been no public market for the Common
Stock. Sales of substantial amounts of shares of the Common Stock in the public
market following the Offering could adversely affect the market price of the
Common Stock, making it more difficult for the Company to sell equity securities
in the future at a time and price which it deems appropriate.
 
                                       58
UNDERWRITING
 
     The underwriters named below (the 'Underwriters'), for whom Prudential
Securities Incorporated, Oppenheimer & Co., Inc. and Furman Selz LLC are acting
as representatives (the 'Representatives'), have severally agreed, subject to
the terms and conditions contained in the Underwriting Agreement to purchase
from the Company and the Selling Stockholders the number of shares of Common
Stock set forth below opposite their respective names:
 
                                            NUMBER OF
UNDERWRITERS                                 SHARES
-----------------------------------------   ---------

Prudential Securities Incorporated.......
Oppenheimer & Co., Inc...................
Furman Selz LLC..........................

                                            ---------
     Total...............................
                                            ---------
                                            ---------
 
     The Company and the Selling Stockholders are obligated to sell, and the
Underwriters are obligated to purchase, all of the shares of Common Stock
offered hereby, if any are purchased.
 
     The Underwriters, through the Representatives, have advised the Company and
the Selling Stockholders that they propose to offer the Common Stock initially
at the public offering price set forth on the cover page of this Prospectus;
that the Underwriters may allow to selected dealers a concession of $      per
share; and that such dealers may reallow a concession of $          per share to
certain other dealers. After the Offering, the public offering price and the
concessions may be changed by the Representatives.
 
     The Selling Stockholders have granted to the Underwriters an option,
exercisable for 30 days from the date of this Prospectus, to purchase up to
793,011 additional shares of Common Stock at the initial public offering price,
less underwriting discounts and commissions, as set forth on the cover page of
this Prospectus. The Underwriters may exercise such option solely for the
purpose of covering over-allotments incurred in the sale of the shares of Common
Stock offered hereby. To the extent such option is exercised, each Underwriter
will become obligated, subject to certain conditions, to purchase approximately
the same percentage of such additional shares as the number set forth next to
such Underwriter's name in the preceding table.
 
     The Company, the Selling Stockholders, directors, executive officers and
certain other security holders of the Company have agreed that they will not,
directly or indirectly, offer, sell, offer to sell, contract to sell, pledge,
grant any option to purchase or otherwise sell or dispose (or announce any
offer, sale, offer of sale, contract of sale, pledge, grant of any option to

purchase or other sale or disposition) of any shares of Common Stock or of
equity securities of the Company substantially similar thereto or any securities
convertible into, or exchangeable or exercisable for, any shares of Common Stock
or such similar securities for a period of 180 days after the date of this
Prospectus, without the prior written consent of Prudential Securities
Incorporated, on behalf of the Underwriters, except that during such
period, shares of Common Stock may be issued upon the exercise of outstanding
stock options and the Company may issue employee stock options which are
exercisable after the 180th day after the date of this Prospectus. Prudential
Securities Incorporated may, in its sole discretion, at any time and without
prior notice, release all or any portion of the shares of Common Stock subject
to such lock-up agreements.

 
                                       59
The Company and the Selling Stockholders have agreed to indemnify the
several Underwriters against and contribute to losses arising out of certain
liabilities, including liabilities under the Securities Act.
 
     The Representatives have informed the Company and the Selling Stockholders
that the Underwriters do not intend to confirm sales to any accounts over which
they exercise discretionary authority.
 
     Prior to the Offering, there has been no public market for the Common Stock
of the Company. Consequently, the offering price will be determined through
negotiations between the Company and the Representatives. Among the factors to
be considered in making such determination will be prevailing market conditions,
the Company's financial and operating history and condition, its prospects and
prospects for the industry in general, the management of the Company and the
market prices of securities for companies in businesses similar to that of the
Company.
 
     In connection with the Offering, certain Underwriters and selling group
members (if any) and their respective affiliates may engage in transactions that
stabilize, maintain or otherwise affect the market price of the Common Stock.
Such transactions may include stabilization transactions effected in accordance
with Rule 104 of Regulation M, pursuant to which such persons may bid for or
purchase Common Stock for the purpose of stabilizing its market price. The
Underwriters also may create a short position for the account of the selling
Underwriters by selling more Common Stock in connection with the Offering then
they are committed to purchase from the Company, and in such case may purchase
Common Stock in the open market following completion of the Offering to cover
all or a portion of such short position, up to 793,011 shares of Common Stock,
by exercising the Underwriters' over-allotment option referred to above. In
addition, Prudential Securities Incorporated, on behalf of the Underwriters, may

impose 'penalty bids' under contractual arrangements with the Underwriters
whereby it may reclaim from an Underwriter (or dealer participating in the
Offering) for the account of the other Underwriters, the selling concession with
respect to the Common Stock that is distributed in the Offering but subsequently
purchased for the account of the Underwriters in the open market. Any of the
transactions described in this paragraph may result in the maintenance of the
price of the Common Stock at a level above that which might otherwise prevail in
the open market. None of the transactions described in this paragraph is
required, and, if any is undertaken, it may be discontinued at any time.
 
     Under the Rules of Fair Practice of the National Association of Securities
Dealers ('NASD'), if more than 10% of the net proceeds of a public offering of
securities, not including underwriting compensation, are intended to be paid to
members of the NASD or affiliated or associated persons that are participating
in the distribution of the offering, the initial public offering price at which
the securities are distributed to the public must be no lower than that
recommended by a 'qualified independent underwriter,' as defined in Rule 2720 of
the Conduct Rules of the NASD. ING, an affiliate of Furman Selz LLC, one of the
Representatives, will be participating in the Offering as a Selling Stockholder
and, following completion of the Offering, will own approximately 16.3% of the
outstanding Common Stock. The Company also intends to use a substantial portion
of the net proceeds of the Offering to pay down amounts outstanding on the
Credit Facilities, in connection with which ING serves as agent. Accordingly,
ING is expected to receive in the aggregate more than 10% of the net proceeds of
the Offering. Prudential Securities Incorporated has agreed to act as the
qualified independent underwriter in connection with this Offering. The initial
public offering price of the Common Stock as set forth on the cover of this
Prospectus will not be lower than that recommended by Prudential Securities
Incorporated.
 
                                 LEGAL MATTERS
 
     The validity of the shares offered hereby will be passed upon for the
Company by Wolf, Block, Schorr and Solis-Cohen LLP, Philadelphia, Pennsylvania.
Certain legal matters relating to the Offering will be passed upon for the
Underwriters by Stroock & Stroock & Lavan LLP, New York, New York.
 
                                    EXPERTS
 
     The combined balance sheets as of December 31, 1996 and 1995 and the
combined statements of operations, changes in equity and cash flows for each of
the three years in the period ended December 31, 1996 included in this
Prospectus and the Registration Statement have been included in reliance on the
report of Coopers & Lybrand L.L.P., independent accountants, given on the
authority of that firm as experts in accounting and auditing.
 
                                       60
ADDITIONAL INFORMATION
 
     The Company has filed with the Commission, 450 Fifth Street, N.W.,
Washington, D.C. 20549, a Registration Statement on Form S-1 under the
Securities Act with respect to the shares of Common Stock offered hereby. This
Prospectus does not contain all of the information set forth in the Registration
Statement and the exhibits and schedules thereto. For further information with
respect to the Company and the shares of Common Stock, reference is hereby made
to the Registration Statement and the exhibits and schedules filed as a part
thereof. Statements contained in this Prospectus as to the contents of any
contract or other document are not necessarily complete and, in each instance,
reference is made to the copy of such contract or document filed as an exhibit
to the Registration Statement, each such statement being qualified in all
respects by such reference. The Registration Statement, including exhibits and
schedules thereto, may be inspected and copied at the public reference
facilities maintained by the Commission at 450 Fifth Street, N.W., Washington,
D.C. 20549 and at the Commission's Regional Offices located at Seven World Trade
Center, Suite 1300, New York, New York 10048, and Citicorp Center, 500 West
Madison Street, Suite 1400, Chicago, Illinois 60661. Copies of such materials
may also be obtained at prescribed rates from the Public Reference Section of
the Commission, Washington, D.C. 20549. In addition, registration statements and
certain other filings made with the Commission through its Electronic Data
Gathering, Analysis and Retrieval ('EDGAR') systems are publicly available
through the Commission's site on the Internet's World Wide Web, located at
http://www.sec.gov. The Registration Statement, including all exhibits thereto
and amendments thereof, has been filed with the Commission through EDGAR.
 
                          ANNUAL AND QUARTERLY REPORTS
 
     After the Offering, the Company will be subject to the information
requirements of the Securities Exchange Act of 1934, as amended, and in
accordance therewith will file reports, proxy statements and other information
with the Commission. The Company intends to furnish its stockholders with annual
reports containing financial statements audited by its independent auditors and
quarterly reports for the first three quarters of each fiscal year containing
unaudited condensed financial information.
 
                                       61
J.G. WENTWORTH AFFILIATED COMPANIES
 
                     INDEX TO COMBINED FINANCIAL STATEMENTS
 
                                                                          PAGE
                                                                          ----
Report of Independent Accountants.....................................     F-2
 
Combined Balance Sheets as of December 31, 1995, 1996 and June 30,
  1997 (unaudited)....................................................     F-3
 
Combined Statements of Operations for the years ended December 31,
  1994, 1995, 1996 and the six months ended June 30, 1996 (unaudited)
  and 1997 (unaudited)................................................     F-4
 
Combined Statements of Changes in Equity (Deficit) for the years ended
  December 31, 1994, 1995, 1996 and the six months ended June 30, 1997
  (unaudited).........................................................     F-5
 
Combined Statements of Cash Flows for the years ended December 31,
  1994, 1995, 1996 and the six months ended June 30, 1996 (unaudited)
  and 1997 (unaudited)................................................     F-6
 
Notes to Combined Financial Statements................................     F-7
 
                                      F-1
REPORT OF INDEPENDENT ACCOUNTANTS
 
To the Stockholders and Partners of
J. G. Wentworth Affiliated Companies:
 
We have audited the accompanying combined balance sheets of J. G. Wentworth
Affiliated Companies (the 'Company') as of December 31, 1995 and 1996, and the
related combined statements of operations, changes in equity (deficit) and cash
flows for each of the three years in the period ended December 31, 1996. These
combined financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these combined
financial statements based on our audits.
 
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the combined financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the combined financial statements. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall combined
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
 
In our opinion, the combined financial statements referred to above present
fairly in all material respects, the combined financial position of J. G.
Wentworth Affiliated Companies as of December 31, 1995 and 1996, and the
combined results of their operations and their cash flows for each of the three
years in the period ended December 31, 1996, in conformity with generally
accepted accounting principles.
 
COOPERS & LYBRAND L.L.P.
Philadelphia, Pennsylvania
September 19, 1997 except for Note 15
as to which the date is October 8, 1997
 
                                      F-2
J.G. WENTWORTH AFFILIATED COMPANIES
 
                            COMBINED BALANCE SHEETS
                                ($ IN THOUSANDS)
JUNE 30 (UNAUDITED)
                                              DECEMBER 31,       --------------------
                                           ------------------               PRO FORMA
                                            1995       1996       1997        1997
                                           -------    -------    -------    ---------
ASSETS

Cash and cash equivalents...............   $ 1,509    $   102    $   611     $   611
Finance receivables.....................    60,104     90,930     71,757      71,757
Allowance for credit losses.............        --       (500)    (1,520)     (1,520)
Office equipment........................
  Net of accumulated depreciation of $73
    in 1995, $111 in 1996 and $265 in
    June 30, 1997.......................        98        524      2,125       2,125
Servicing asset.........................        --         --        890         890
Retained interests......................        --         --      5,219       5,219
Restricted cash.........................        --         --        709         709
Other assets............................     1,276        919      1,654       1,654
                                           -------    -------    -------    ---------
      Total assets......................   $62,987    $91,975    $81,445     $81,445
                                           -------    -------    -------    ---------
                                           -------    -------    -------    ---------
              LIABILITIES

Notes payable, banks....................   $56,907    $91,858    $75,165     $75,165
Overdraft payable.......................       955      1,457        968         968
Accounts payable........................     2,299      1,541      1,739       2,945
Accrued expenses........................        88        798      2,556       2,556
Claims payable..........................     1,694        724      1,707       1,707
Deferred tax liability..................        --         --         --       6,200
                                           -------    -------    -------    ---------
      Total liabilities.................    61,943     96,378     82,135      89,541
 
Commitments and contingencies (note 11)

            EQUITY (DEFICIT)

Common stock............................         2          2          2         125
Additional paid-in capital..............       261        261        261      (3,960)
Retained earnings.......................       512        285      1,939      (4,261)
Partner capital (deficit) accounts......       269     (4,732)    (2,861)         --
Due from stockholders or partners.......        --       (219)       (31)         --
                                           -------    -------    -------    ---------
      Total equity (deficit)............     1,044     (4,403)      (690)     (8,096)
                                           -------    -------    -------    ---------
    Total liabilities and equity
      (deficit).........................   $62,987    $91,975    $81,445     $81,445
                                           -------    -------    -------    ---------
                                           -------    -------    -------    ---------
The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-3
J.G. WENTWORTH AFFILIATED COMPANIES
 
                       COMBINED STATEMENTS OF OPERATIONS
                   ($ IN THOUSANDS, EXCEPT PER SHARE AMOUNTS)
YEAR ENDED DECEMBER 31,      SIX MONTHS ENDED JUNE 30,
                                           ---------------------------    --------------------------
                                            1994      1995      1996         1996           1997
                                           ------    ------    -------    -----------    -----------
                                                                          (UNAUDITED)    (UNAUDITED)
Revenue:
  Interest income.......................   $2,755    $8,560    $10,426      $ 5,601        $ 8,743
  Gain on sale of receivables...........       --       268        576           --         11,419
  Other income..........................      417       894        785          319            386
                                           ------    ------    -------    -----------    -----------
    Total revenues......................    3,172     9,722     11,787        5,920         20,548
                                           ------    ------    -------    -----------    -----------
Expenses:
  Interest expense......................    1,541     4,995      6,380        2,820          4,783
  Marketing expenses....................      148       224      3,606        1,010          3,682
  Salaries and benefits.................      686     1,509      1,992          697          2,384
  Other expense.........................      873     1,350      3,384        2,588          1,800
  Provision for credit losses...........       --        --        500          165          1,630
                                           ------    ------    -------    -----------    -----------
    Total expenses......................    3,248     8,078     15,862        7,280         14,279
                                           ------    ------    -------    -----------    -----------
Income (loss) before extraordinary
  loss..................................      (76)    1,644     (4,075)      (1,360)         6,269
Extraordinary loss......................       --      (876)        --           --             --
                                           ------    ------    -------    -----------    -----------
  Net income (loss).....................   ($  76)   $  768    ($4,075)     ($1,360)       $ 6,269
                                           ------    ------    -------    -----------    -----------
                                           ------    ------    -------    -----------    -----------
(Unaudited) Pro forma information:
Pro forma (benefit) provision for
  taxes.................................                                    ($1,508)       $ 2,320
Pro forma net income (loss).............                                    ($2,567)       $ 3,949
Pro forma net income (loss) per share...                                    ($  .20)       $   .31
Pro forma number of shares
  outstanding...........................                                     12,549         12,549
The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-4
J.G. WENTWORTH AFFILIATED COMPANIES
 
               COMBINED STATEMENTS OF CHANGES IN EQUITY (DEFICIT)
                                ($ IN THOUSANDS)
PARTNER
                                           ADDITIONAL                  CAPITAL       DUE FROM
                                 COMMON     PAID-IN      RETAINED     (DEFICIT)    STOCKHOLDERS
                                 STOCK      CAPITAL      EARNINGS     ACCOUNTS     OR PARTNERS      TOTAL
                                 ------    ----------    ---------    ---------    ------------    -------
Balance, January 1, 1994......     $1         $249        $    53      $   401        $   --       $   704
Net income (loss).............     --           --           (256)         180            --           (76)
                                   --        -----       ---------    ---------       ------       -------
Balance, December 31, 1994....      1          249           (203)         581            --           628
Capital contributions.........      1           12             --          450            --           463
Distributions and dividends...     --           --            (22)        (793)           --          (815)
Net income....................     --           --            737           31            --           768
                                   --        -----       ---------    ---------       ------       -------
Balance, December 31, 1995....      2          261            512          269            --         1,044
Capital contributions.........     --           --             --          762            --           762
Distributions and dividends...     --           --           (285)      (1,630)           --        (1,915)
Net income (loss).............     --           --             58       (4,133)           --        (4,075)
Receivable from partner.......     --           --             --           --          (219)         (219)
                                   --        -----       ---------    ---------       ------       -------
Balance, December 31, 1996....      2          261            285       (4,732)         (219)       (4,403)
Repayments (unaudited)........     --           --             --           --           188           188
Distributions and dividends
  (unaudited).................     --           --           (794)      (1,950)           --        (2,744)
Net income (unaudited)........     --           --          2,448        3,821            --         6,269
                                   --        -----       ---------    ---------       ------       -------
Balance, June 30, 1997
  (unaudited).................     $2         $261        $ 1,939      $(2,861)       $  (31)      $  (690)
                                   --        -----       ---------    ---------       ------       -------
                                   --        -----       ---------    ---------       ------       -------
The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-5
J.G. WENTWORTH AFFILIATED COMPANIES

                       COMBINED STATEMENTS OF CASH FLOWS
                                ($ IN THOUSANDS)
SIX MONTHS ENDED
                                                                  YEAR ENDED DECEMBER 31,             JUNE 30,
                                                               ------------------------------    ------------------
                                                                1994        1995       1996       1996       1997
                                                               -------    --------    -------    -------    -------
                                                                                                    (UNAUDITED)
Cash flows from operating activities:
  Net income (loss).........................................   $   (76)   $    768    $(4,075)   $(1,360)   $ 6,269
  Adjustments to reconcile net income (loss) to net cash
    used in operations:
      Amortization and depreciation.........................       632       1,516      1,360        683      1,274
      Accretion of unearned income..........................    (2,968)     (8,718)   (12,303)    (5,779)    (9,714)
      Gain on sale of receivables...........................        --        (268)      (576)        --    (11,419)
      Provision for credit losses...........................        --          --        500        165      1,630
  Changes in assets and liabilities:
      (Increase) decrease in other assets...................       (43)       (311)       357        125       (735)
      Increase (decrease) in accounts payable...............       305       1,656       (743)    (1,081)       209
      Increase in accrued expenses..........................        --          17        710        114      1,758
      Increase (decrease) in claims payable.................        --       1,506       (970)    (1,506)       983
                                                               -------    --------    -------    -------    -------
           Total adjustments................................    (2,074)     (4,602)   (11,665)    (7,279)   (16,014)
                                                               -------    --------    -------    -------    -------
      Net cash (used in) operations.........................    (2,150)     (3,834)   (15,740)    (8,639)    (9,745)
                                                               -------    --------    -------    -------    -------
Cash flows from investing activities:
  Finance receivable collections............................     4,152      44,328     50,857     24,683     26,067
  Finance receivable purchases, including acquisition
    costs...................................................   (32,721)    (62,351)   (76,755)   (30,398)   (51,568)
  Proceeds from sale of receivables, net....................        --          --      6,671         --     58,269
  Increase in restricted cash...............................        --          --         --         --       (709)
  Proceeds from disposition of equipment....................        --          44         53         --        560
  Purchase of equipment.....................................       (34)        (45)      (559)      (173)    (2,316)
                                                               -------    --------    -------    -------    -------
      Net cash (used in) provided by investing activities...   (28,603)    (18,024)   (19,733)    (5,888)    30,303
                                                               -------    --------    -------    -------    -------

Cash flows from financing activities:
  Net draws against notes payable, banks....................    29,572      24,256     34,951     14,232    (16,693)
  Partners' capital distributions and dividends to
    shareholders............................................        --        (815)    (1,915)    (1,112)    (2,744)
  Partners' and stockholders' capital contributions.........        11         463        762        395         --
  (Decrease) increase in overdraft payable..................       981        (355)       502        (79)      (489)
  Principal payments under capital lease obligation.........        (1)        (15)       (15)        (9)       (11)
  Payments for financing costs..............................       (32)       (215)        --         (2)      (300)
  Repayments on amounts due from stockholders or partners...        --          --         --         --        188
  Borrowings from stockholders or partners..................       310          --       (219)        --         --
  Repayment of investor notes...............................      (145)         --         --         --         --
                                                               -------    --------    -------    -------    -------
      Net cash provided by (used in) financing activities...    30,696      23,319     34,066     13,425    (20,049)
                                                               -------    --------    -------    -------    -------
Net increase (decrease) in cash and cash equivalents........       (57)      1,461     (1,407)    (1,102)       509
Cash and cash equivalents, beginning of period..............       105          48      1,509      1,509        102
                                                               -------    --------    -------    -------    -------
Cash and cash equivalents, end of period....................   $    48    $  1,509    $   102    $   407    $   611
                                                               -------    --------    -------    -------    -------
                                                               -------    --------    -------    -------    -------
Supplemental disclosure of cash flow information:
  Cash paid during the period for interest..................   $ 1,466    $  4,333    $ 5,624    $ 2,684    $ 4,674
Noncash transactions:
  Gross charge-offs.........................................   $    --    $     --    $    --    $    --    $   610
  Refinancing of notes payable..............................   $    --    $ 56,014    $    --    $    --    $    --
  Retained interest.........................................   $    --    $     --    $    --    $    --    $ 5,219
  Servicing asset...........................................   $    --    $     --    $    --    $    --    $   890
The accompanying notes are an integral part of
                     these combined financial statements.
 
                                      F-6
J.G. WENTWORTH AFFILIATED COMPANIES

                     NOTES TO COMBINED FINANCIAL STATEMENTS
 
1. ORGANIZATION AND BASIS OF PRESENTATION
 
     The combined financial statements include the accounts of the following
affiliated entities under common management, including: J. G. Wentworth and
Company, Inc. ('JGW'), J.G. Wentworth Structured Settlement Funding Corporation
('SSFC'), J.G. Wentworth S.S.C., Limited Partnership ('SSC'), J.G. Wentworth
Funding Corp. ('FC'), and J.G. Wentworth MFC Associates, L.P. ('MFC'),
(collectively referred to herein as 'J.G. Wentworth Affiliated Companies' or the
'Company'). All significant transactions between the affiliated entities have
been eliminated in the accompanying combined financial statements.
 
     JGW is a Pennsylvania corporation, incorporated on January 8, 1991, whose
primary purpose is to provide management services to the affiliated entities in
connection with the administration of insurance and lottery claims. SSFC is a
Delaware corporation that serves as the General Partner in SSC, a Delaware
limited partnership. Both SSFC and SSC commenced operations on August 25, 1995.
FC is a Pennsylvania corporation that serves as the General Partner in MFC, a
Delaware limited partnership. Both FC and MFC commenced operations on June 11,
1993.
 
     SSC acquires the seller's right to receive payments with respect to settled
insurance company claims and annuities ('structured settlements') and state
lottery winnings ('lottery claims') which are paid to the recipient over a
period of years in return for a discounted lump sum payment to the seller. MFC
acquires settled bodily injury claims ('BI Claims') made to the New Jersey
Automobile Full Insurance Underwriting Association ('JUA'), the New Jersey
Market Transition Facility ('MTF') or other affiliated entities, for which
payment has been deferred twelve or eighteen months. The JUA and MTF pay BI
Claims on a specific date with interest accruing at 6% annually and payable to
MFC. MFC is restricted in its ability to purchase additional BI Claims since the
MTF has discontinued the deferral of claims. Structured settlements, lottery
claims and BI Claims are collectively referred to herein as finance receivables.
 
     Prior to the completion of the initial public offering, the Company will
reorganize (the 'Reorganization') whereby SSC and MFC will contribute all of
their limited partnership interests and SSFC, FC and JGW will contribute all of
their capital stock in exchange for shares of common stock of a newly formed
corporation, entitled J.G. Wentworth & Company, Inc. In connection with the
Reorganization, management plans to account for the exchange of ownership
interests at their historical carry-over basis given that, (i) the affiliated
entities are under common management, (ii) the current ownership distribution of
SSC (the most significant affiliate of the Company) will generally approximate
the ownership percentages of the newly formed company, and (iii) the
reorganization will not have a substantial economic effect on the stockholder
group.

2. UNAUDITED PRO FORMA INFORMATION
 
     The unaudited pro forma combined balance sheet represents the financial
position as of June 30, 1997 adjusted to give effect to the establishment of
$6,200,000 of net deferred tax liabilities that would have been recorded had the
Company been taxed as a C corporation and to give effect to the $1,237,000
distribution to S corporation stockholders and partners. The principal
components of the Company's net deferred tax liabilities relate to the method of
recognizing interest income and the recognition of gain on sale of finance
receivables.
 
     The unaudited pro forma combined net income (loss) represents the results
of operations adjusted to reflect the change in the Company's income tax status
to a C corporation using a pro forma blended federal and state income tax rate
of 37%. The pro forma income (loss) per share is computed based on 12,466,667
shares outstanding before the initial public offering giving effect to the
Reorganization and reflects the issuance of 82,467 shares of Common Stock which
would be needed to generate the cash to fund the S corporation distribution at
the assumed initial public offering price of $15 per share.
 
                                      F-7
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
 
  Finance Receivables
 
     The Company purchases finance receivables at a discount from their maturity
value. This discount is recorded as unearned income and is netted against
finance receivables in the accompanying combined financial statements. Unearned
income on finance receivables is recognized as interest income using the
interest method over the life of the related finance receivables.
 
     Certain direct acquisition costs are capitalized and recognized as an
adjustment to interest income over the contractual lives of the related finance
receivables utilizing the interest method.
 
  Allowance for Credit Losses
 
     The Company maintains an allowance for credit losses at a level that
management considers adequate to provide for potential losses in the finance
receivable portfolio based upon current economic conditions, past experience,
known and inherent risks in the portfolio and other relevant factors. These
credit losses principally result from individual payments not collected on
finance receivables. The Company will charge-off the defaulted payment balance
at the time it determines it to be uncollectible or if there has been no
progress toward restoration of the defaulted payments for a twelve-month period.

     The Company calculates the allowance for credit losses in accordance with
Statement of Financial Accounting Standards No. 114, Accounting by Creditors for
Impairment of a Loan. Management considers the portfolio of structured
settlements to be homogeneous, except finance receivables in excess of $250,000.
Management individually determines the valuation of impairment on large
structured settlements and collectively evaluates the remaining portfolio for
impairment.
 
  Securitizations
 
     Effective January 1, 1997, the Company adopted Statement of Financial
Accounting Standards No. 125, Accounting for Transfers and Servicing of
Financial Assets and Extinguishment of Liabilities ('SFAS 125'). SFAS 125, which
is effective for transfers and extinguishments occurring after December 31,
1996, provides consistent standards for distinguishing transfers of financial
assets that are sales from transfers that are secured borrowings.
 
     Gains or losses on securitization transactions are determined based upon
the difference between the proceeds of the receivables sold and the allocation
of recorded investment therein. The Company allocates the recorded investment in
the receivables between the receivables sold, the portion retained, and the
servicing asset based on their respective fair values on the date of sale.
 
     Currently, the Company does not classify finance receivables held for sale.
The Company intends to continue to sell finance receivables in the future based
on eligibility requirements determined at the time of each transaction.
 
  Retained Interests
 
     Retained interests represent subordinated Class B certificates and excess
cash flows from the June 1997 securitization. The amounts are classified as held
to maturity and carried at amortized cost in accordance with Statement of
Financial Accounting Standards No. 115, Accounting for Certain Investments in
Debt and Equity Securities, as the underlying cash flows are not subject to
prepayment risk and the Company has both the ability and intent to hold these
securities to maturity.
 
  Servicing Asset
 
     A servicing asset is determined by allocating the finance receivables
previous carrying amount between the servicing asset, the finance receivables
that were sold, and the interest retained, if any, based on their relative fair
values at the date of sale. The fair value of the servicing asset is initially
calculated from market estimates of other servicing arrangements using a
discount rate that
 
                                      F-8
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

management believes is appropriate. The servicing asset is amortized in
proportion to, and over the period of, estimated net servicing income. The
servicing asset recorded at June 30, 1997 amounted to $890,000.
 
     Impairment of the servicing asset and the retained interests are evaluated
through an assessment of the fair value of the discounted cash flows method
under which the expected cash flows are adjusted to actual and discounted to
present value. The net carrying value is compared to its discounted estimated
cash flow remaining to determine whether adjustments should be made to the
carrying value or amortization schedule.
 
     The net cash flows of the receivables are currently not subject to
prepayment. Impairment of a servicing asset or retained interests is recognized
through a valuation allowance and a charge to current period earnings if it is
considered to be temporary, or, through a direct write-down of the asset and a
charge to current period net income if it is considered other than temporary.
Currently, the Company has not recorded a valuation allowance or a write-down
for these assets.
 
  Restricted Cash
 
     In connection with the June 1997 securitization transaction, the Company is
required to maintain a cash reserve account with the trustee. This amount has
been presented on the combined balance sheet as restricted cash.
 
  Income Taxes
 
     Affiliated entities within the Company are currently taxed as S
corporations or partnerships under the Internal Revenue Code and under
applicable provisions of Pennsylvania law. Accordingly, no provision has been
made for income taxes since all income is taxed and losses and tax credits are
utilized directly by the stockholders or partners.
 
     The affiliated entities will terminate their S corporation status upon the
Reorganization. Subsequent to the Reorganization, the Company intends to file a
consolidated federal income tax return. Upon termination of the tax status and
completion of the Reorganization, the Company will apply SFAS No. 109,
Accounting for Income Taxes ('SFAS 109'), to its arising temporary differences.
Under the asset and liability method prescribed by SFAS 109, deferred tax assets
and liabilities are recognized for future tax consequences attributable to
differences between the financial statement carrying amounts of existing assets
and liabilities and their respective tax basis (temporary differences) using
currently enacted tax rates. The effect on deferred tax assets or liabilities of
a change in tax rates is recognized in income in the period that includes the
enactment date of the tax change. Under SFAS 109, deferred tax assets are
recognized for deductible temporary differences and operating loss and tax
credit carryforwards, and then a valuation allowance is established to reduce

that deferred tax asset if it is 'more likely than not' that the related tax
benefits will not be realized.
 
     On a pro forma basis, the net deferred tax liability at June 30, 1997,
resulted primarily from differences in the financial statement and tax treatment
of income earned from the finance receivables and the gain on sale of
receivables. The net deferred tax liability will be recorded as a non-cash
charge to the provision for taxes in the quarter in which the proposed initial
public offering is completed.
 
  Marketing Expenses
 
     The Company's policy is to expense marketing costs as incurred.
 
  Cash Flow Statement
 
     For purposes of the combined statement of cash flows, the Company considers
highly liquid debt instruments purchased with an original maturity of three
months or less to be cash equivalents. The Company's cash management program
utilizes zero balance accounts. Accordingly, book overdraft balances have been
reclassified to overdraft payable.
 
                                      F-9
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)

  Recent Accounting Pronouncements
 
     In March 1997, the FASB issued Statement of Financial Accounting Standards
No. 128, Earnings per Share ('SFAS 128') which supersedes Accounting Principles
Board Opinion No. 15, Earnings per Share ('APB 15'), and is effective for the
Company for the year ending December 31, 1997. This statement requires
restatement of all prior-period earnings per share data presented. SFAS 128
establishes standards by simplifying the computation and presentation of
earnings per share ('EPS'), and applies to entities with publicly held common
stock or potential common stock. It replaces the presentation of primary EPS
with a presentation of basic EPS. It also requires dual presentation of basic
and diluted EPS on the face of the income statement for all entities with
complex capital structures and requires a reconciliation of the numerator and
denominator of the basic EPS computation to the numerator and denominator of the
diluted EPS computation. Basic EPS excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of common
shares outstanding for the period. Diluted EPS reflects the potential dilution
that could occur if securities or other contracts to issue common stock were
exercised or converted into common stock or resulted in the issuance of common
stock that then shared in the earnings of the entity. Diluted EPS is computed
similarly to fully diluted EPS pursuant to APB 15. If EPS had been calculated in
accordance with SFAS 128, the basic EPS and diluted EPS for the six months ended
June 30, 1997 would have been the same as primary EPS under APB 15.

     In June 1997, the FASB issued Statement of Financial Accounting Standards
No. 130, Reporting Comprehensive Income ('SFAS 130'), which is effective for the
Company for the year ending December 31, 1998, and requires restatement of all
prior-period financial statements presented for comparative purposes. SFAS 130
establishes standards for reporting and display of comprehensive income and its
components (revenues, expenses, gains, and losses) in a full set of
general-purpose financial statements and SFAS 130 requires that all items are
required to be recognized under accounting standards as components of
comprehensive income be reported in a financial statement that is displayed with
the same prominence as other financial statements. It is anticipated that the
adoption of SFAS 130 will not have a material effect on the combined financial
position or results of operations of the Company.
 
  Use of Estimates
 
     The preparation of combined financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the combined
financial statements and the amount of revenues and expenses during the reported
period. Actual results may differ from those estimates.
 
  Unaudited Information
 
     In the opinion of management, the unaudited Combined Financial Statements
and related notes as of June 30, 1997 and for the six months ended June 30, 1996
and 1997 reflect all adjustments (which include normal recurring adjustments)
necessary to present fairly the combined statements of operations, cash flows
and balance sheets for the periods presented. The combined results for the
interim periods are not necessarily indicative of combined results to be
expected for the full year.
 
                                      F-10
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
4. FINANCE RECEIVABLES
 
     Finance receivables consist of the following:
 
                                              DECEMBER 31,
                                           -------------------     JUNE 30,
                                            1995        1996         1997
                                           -------    --------    -----------
                                                 (000's)            (000's)
                                                                  (UNAUDITED)

Structured settlements..................   $13,639    $133,365     $  119,451
BI claims...............................    56,583      30,668         18,605
Lottery claims..........................     4,598       2,028            164
                                           -------    --------    -----------
  Maturity value........................    74,820     166,061        138,220
Unearned income.........................   (15,348)    (83,656)       (73,448)
Deferred acquisition costs, net.........       632       8,525          6,985
                                           -------    --------    -----------
  Carrying value........................   $60,104    $ 90,930     $   71,757
                                           -------    --------    -----------
                                           -------    --------    -----------
 
     At December 31, 1996 and June 30, 1997, the contractual maturities of
finance receivables were as follows:
 
                              DECEMBER 31,     JUNE 30,
                                  1996           1997
                              ------------    -----------
                                (000's)         (000's)
                                              (UNAUDITED)

     1997..................     $ 32,048       $   18,737
     1998..................        8,342           21,950
     1999..................       12,626           15,402
     2000..................        6,897           12,596
     2001..................       17,726           11,480
     2002 and thereafter...       88,422           58,055
                              ------------    -----------
                                $166,061       $  138,220
                              ------------    -----------
                              ------------    -----------
 
     On June 13, 1997, the Company sold a substantial portion of its structured
settlements (the receivables) to outside investors ('A Certificate Holders')
through a private placement securitization transaction. Proceeds of the
securitization amounted to $59,546,000 which resulted in a gain on sale of
receivables of $11,284,000. The Company sold the receivables for cash, and
retained a subordinate interest (the 'B Certificates') and any remaining cash

flows, after expenses, of the securitized receivables. The A Certificate
Holders' recourse to the Company is limited to the retained interests and the
required cash reserve balance. The Company will service the receivables sold for
a fee.
 
                                      F-11
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
4. FINANCE RECEIVABLES -- (CONTINUED)

     Changes in the allowance for credit losses during the periods indicated
were as follows:
 
                                              DECEMBER 31,
                                           -------------------     JUNE 30,
                                            1995        1996         1997
                                           -------    --------    -----------
                                                 (000's)            (000's)
                                                                  (UNAUDITED)

Balance, beginning of period............   $    --    $     --     $      500
Provision for credit losses.............        --         500          1,630
Charge-offs.............................        --          --           (610)
                                           -------    --------    -----------
Balance, end of period..................   $     0    $    500     $    1,520
                                           -------    --------    -----------
                                           -------    --------    -----------
 
     No finance receivables were individually identified as impaired for the
periods ended December 31, 1995, 1996 and June 30, 1997.
 
5. OFFICE EQUIPMENT
 
     Office equipment at December 31, 1995 and 1996 were as follows:
 
                                                DECEMBER 31,
                                                ------------
                                                1995    1996
                                                ----    ----
                                                  (000's)

     Equipment...............................   $ 65    $109
     Furniture...............................     35     193
     Data processing systems.................     71     333
                                                ----    ----
                                                 171     635
       Less accumulated depreciation.........    (73)   (111)
                                                ----    ----
                                                $ 98    $524
                                                ----    ----
                                                ----    ----

     Depreciation expense for the years ended December 31, 1994, 1995 and 1996
was $21,000, $46,000 and $114,000, respectively.
 
6. NOTES PAYABLE TO BANKS
 
     A summary of Notes Payable to Banks is as follows:
 
                                   DECEMBER 31,
                                ------------------     JUNE 30,
                                 1995       1996         1997
                                -------    -------    -----------
                                     (000's)            (000's)
                                                      (UNAUDITED)

     Notes Payable-MFC (a)...   $49,616    $27,414      $16,783
     Notes Payable-SSC (b)...     7,291     64,444       58,382
                                -------    -------    -----------
                                $56,907    $91,858      $75,165
                                -------    -------    -----------
                                -------    -------    -----------
 
(A) NOTES PAYABLE, MFC
 
     On May 26, 1995, MFC consummated a $90,000,000 revolving credit agreement
with a lender which replaced the revolving credit and term loan and subordinated
term loan agreements outstanding on December 31, 1994. Pursuant to an amendment
dated March 20, 1996 the credit facility was reduced to $80,000,000. MFC has the
option to convert all or any portion of the loan accruing interest at the Base
Rate Option to a fixed rate loan with a stated maturity date (the 'Fixed Rate
Option'). At December 31, 1996, $25,968,000 has been converted to fixed rates
and with maturities less than 1 year. The credit agreement, as amended in 1997,
was reduced to $20,000,000 and expires on May 20, 1998. Interest is payable
monthly until all principal has been repaid in full at the greater of Chemical
Bank or Citibank's prime rate minus 1.5% or LIBOR plus 1.5% (the 'Base Rate
Option'). The weighted average interest rate on the borrowings under this
agreement were 10.2%, 8.8% and 8.8% in 1994,
 
                                      F-12
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
6. NOTES PAYABLE TO BANKS -- (CONTINUED)

1995 and 1996, respectively. Borrowings under this agreement are collateralized
by BI Claims and substantially all other remaining assets of MFC.
 
     In connection with the revolving credit agreement, MFC is obligated to pay
a commitment fee of 1/4% per annum on the average daily unused portion of the
revolving credit agreement. The commitment fee amounted to $91,000, $39,000 and
$42,000 in 1994, 1995, and 1996, respectively.

     Under the terms of the revolving credit agreement, the most restrictive
covenant is a minimum net worth requirement, as defined in the agreement.
 
     The MFC notes payable are personally guaranteed by two of the partners of
MFC.
 
(B) NOTES PAYABLE, SSC
 
     On August 25, 1995, SSC consummated a three-year, $20,000,000 revolving
credit and term loan agreement with a bank that is affiliated with one of the
Limited Partners of SSC. Through December 31, 1996, the agreement was amended
twice and the line increased to $75,000,000. Effective February 1997, the
revolving credit agreement was amended to reflect an increase to $105,000,000
and addition of another bank was added to the facility. Interest is payable
monthly on the average daily borrowings under the revolving credit agreement at
the greater of the lender's prime rate plus .5% or LIBOR plus 3.5%. Principal is
repaid as the underlying finance receivables are collected. The agreement
expires on August 25, 1998 and if not extended will convert to a term loan
arrangement subject to certain conditions. Borrowings under this agreement are
collateralized by structured settlements, lottery claims, and substantially all
other assets of SSC. The weighted average interest rate during 1995 and 1996 was
9.8% and 9.8%, respectively. At December 31, 1996, the interest rate on the
outstanding loan balance was 8.6%.
 
     In connection with the revolving credit agreement SSC is obligated to pay a
commitment fee of 1/2% per annum on the average daily unused portion of the
revolving credit agreement. This fee amounted to $15,000 in 1995 and $45,000 in
1996.
 
     Under the terms of the revolving credit agreement, the most restrictive
covenant relates to the payment of dividends or distribution of assets.
 
7. OPERATING LEASES
 
     The Company has commitments under long-term operating leases, principally
for building space which are for a five year term. The following summarizes
future minimum lease payments under non-cancelable operating leases.
 
                     DECEMBER 31, 1996
                     -----------------
                          (000's)

     1997.........        $   535
     1998.........            550
     1999.........            544
     2000.........            538
     2001.........            538
     Thereafter...            331
                         --------
                          $ 3,036
                         --------
                         --------

     Rent expense was approximately $133,000 in 1994, $135,000 in 1995 and
$195,000 in 1996.
 
                                      F-13
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
8. GAIN ON SALE OF LOTTERY CLAIMS
 
     From time to time, SSC will enter into an agreement to sell lottery claims.
The sale of the lottery claims resulted in gains of $268,000 in 1995, $576,000
in 1996, and $135,000 at June 30, 1997, which is included in Gain on sale of
receivables in the accompanying Combined Financial Statements. The proceeds from
the sale of the lottery claims were used to pay down the Note Payable-SSC.
 
9. EXTRAORDINARY ITEM
 
     On March 29, 1995, MFC refinanced all of its outstanding notes payable. The
Company incurred an extraordinary loss in the amount of $876,000 as a result of
the refinancing which has been reported as a separate line item in the
accompanying Combined Statement of Operations. Deferred financing costs in the
amount of $456,000 were recorded as a loss on that date, as well as the
profit-sharing provision of the subordinated loan agreement which amounted to
$420,000.
 
10. FAIR VALUE OF FINANCIAL INSTRUMENTS
 
     Statement of Financial Accounting Standards No. 107, Disclosures About Fair
Value of Financial Instruments, ('SFAS 107') as amended by Statement of
Financial Accounting Standards No. 119, Disclosure About Derivative Financial
Instruments and Fair Value of Financial Instruments, requires disclosure of the
estimated fair value of an entity's assets and liabilities considered to be
financial instruments. The majority of the combined assets and liabilities are
considered financial instruments as defined in SFAS 107. These amounts represent
estimates of fair value of financial instruments at a point-in-time. Significant
estimates using available market information and appropriate valuation
methodologies were used for the purposes of this disclosure. The estimates are
not necessarily indicative of the amounts the Company could realize in a current
market exchange, and the use of different market assumptions or methodologies
could have a material effect on the estimated fair value amounts.

                                 DECEMBER 31, 1995         DECEMBER 31, 1996
                               ----------------------    ----------------------
                               CARRYING    ESTIMATED     CARRYING    ESTIMATED
                                VALUE      FAIR VALUE     VALUE      FAIR VALUE
                               --------    ----------    --------    ----------
                                      (000's)                   (000's)
Assets:
  Cash and cash
    equivalents.............   $  1,509     $  1,509     $    102     $     102
  Finance receivables.......     60,104       60,104       90,930       104,038
Liabilities:
  Notes payable.............     56,907       56,907       91,858        91,858
 
     The Company using the following methods and assumptions to estimate fair
value of each class of financial instruments for which it is practicable to
estimate that value:
 
     Cash and Cash Equivalents:  The carrying value is a reasonable estimate of
fair value.
 
     Finance Receivables:  At December 31, 1995, the carrying amount in the
Combined Financial Statements approximates fair value because of the relatively
short period of time between the origination of the receivables and their
expected realization. At December 31, 1996, the fair value is based on the
discounted value of the expected future cash flows from the receivables, using a
discount rate that management believes is appropriate based on aggregate risk
factors.
 
     Notes Payable:  The carrying value is a reasonable estimate of fair value
due to the variable rate nature of existing SSC notes and the short-term nature
of the MFC notes.
 
11. COMMITMENTS AND CONTINGENCIES
 
     The Company currently maintains a contractual relationship with an
independent party whereby the party performs verification, quality control and
collection procedures with respect to finance receivables. The agreement for
lottery claims and other finance receivables will automatically renew for two
successive terms of three years each with subsequent terms of two years each,
unless terminated by either party to the contract.
 
                                      F-14
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
11. COMMITMENTS AND CONTINGENCIES -- (CONTINUED)

     In the normal course of business, the Company is subject to various legal
proceedings and claims, the resolution of which, in management's opinion, will
not have a material adverse effect on the combined financial position or the
results of operations of the Company.

12. RELATED PARTY TRANSACTIONS
 
     The Company has an agreement with Gemini Media, Inc. ('Gemini') in which
Gemini will provide marketing and advertising services to the Company. An
employee of the Company is the owner of Gemini. Fees paid to Gemini for
marketing services were $0, $0 and $2,362,000 for the years ended December 31,
1994, 1995, and 1996. At December 31, 1996 there was $500,000 of prepaid
expenses to Gemini included in other assets.
 
     The Company receives legal services from a law firm whose general partner
is a limited partner of SSC. Fees paid for legal services by the Company for the
years ended December 31, 1995 and 1996 were $5,000 and $70,000, respectively.
There were no accrued legal expenses for these services as of December 31, 1995
and 1996.
 
     An affiliate of ING Capital Corporation, a 25% owner of SSC, acts as a
lending institution for both MFC and SSC and acts as the private placement agent
in connection with SSC's securitization transactions for SSC. Both MFC and SSC
maintained revolving lines of credit with ING. Interest expense incurred on
Notes payable to banks by the Company for the years ended December 31, 1994,
1995 and 1996 were $1,541,000, $4,995,000, and $6,380,000, respectively. Accrued
interest expense was $51,000 and $476,000 as of December 31, 1995 and 1996.
Commitment fees paid on average daily unused lines of credit are disclosed in
Note 6. There were no bank fees paid or accrued for securitizations in 1994,
1995 and 1996. The Company paid ING a fee of $1,200,000 for the June 13, 1997
securitization.
 
     The Company performs management services for affiliated companies not
included in these combined financial statements. These fees amounted to $0, $0
and $139,000 in 1994, 1995 and 1996, respectively.
 
     In addition, the Company had noninterest bearing receivables from partners
in the amounts of $0 and $219,000 at December 31, 1995 and 1996, respectively.
$188,000 of the receivables were repaid in 1997.
 
13. EMPLOYEE BENEFIT PLAN
 
     The Company maintains a Savings Plan under section 401(k) of the Internal
Revenue Code (the 'Plan'). The Plan was established effective January 1, 1997
and covers substantially all employees of the Company. Under the plan
contributions are at the discretion of the Board of Directors. No contributions
have been made by the Company to the Plan.
 
14. RISKS AND UNCERTAINTIES
 
     The Company's finance receivable balances are primarily obligations of
insurance companies, state lottery divisions, and states and municipalities. The
Company's exposure to concentration of credit risk with respect to these
receivables is generally limited due to the large number of insurance companies
comprising the Company's receivable base, their dispersion across geographical
areas, and state insurance guarantee funds. As of June 30, 1997, two insurance
companies comprise approximately 10% of the total originations, respectively,
while three states represent in excess of 10% of the total originations,
respectively. The Company's exposure to credit loss in the event of non-

performance of these entities is represented by the finance receivable balance.
 
     The Company's earnings are dependent upon the level of net interest income
that is earned annually. Accordingly, the earnings are subject to risks and
uncertainties surrounding its exposure to changes in the interest rate
environment and ability to maintain sufficient effective yields in the future.
 
                                      F-15
J.G. WENTWORTH AFFILIATED COMPANIES

             NOTES TO COMBINED FINANCIAL STATEMENTS -- (CONTINUED)
 
14. RISKS AND UNCERTAINTIES -- (CONTINUED)

     The Company retains interest rate risk resulting from mismatches between
the fixed discount rates of finance receivables in relation to the variable rate
notes payable to a bank maturing or repricing within a given time period. An
increase in interest rates could significantly affect the Company's net interest
income.
 
     The Company is also subject to numerous risks associated with structured
settlements. The risks include, but are not limited to, restrictions on
assignability of structured settlements, a change in the U.S. tax law, diversion
by a seller of scheduled payments to the Company, insolvency of a seller or
insurance company, and other potential risks of regulation and/or legislation.
 
     The Company has and will continue to experience negative cash flow from
operations. As a result of its anticipated growth, the Company will remain
dependent on its credit facilities and access to the securitization markets.
 
     Significant estimates are made by management in determining the allowance
for credit losses, servicing assets, the fair value of securitized assets
retained and certain deferred acquisition costs. Consideration is given to a
variety of factors in establishing these estimates, including current economic
conditions, the results of internal review processes, delinquencies and the
results of internal time analysis. Since the allowance for credit losses is
dependent on general and other economic conditions beyond the Company's control,
it is at least reasonably possible that the estimates could differ materially
from currently reported values in the term.
 
15. SUBSEQUENT EVENTS (UNAUDITED)
 
     On September 12, 1997, the Company entered into a sale-leaseback of office
equipment. In connection with transaction this the Company received $1,619,000.
The lease has a term of 48 months.
 
     On September 30, 1997 and October 1, 1997, the Company sold approximately
$20,897,000 and $28,714,000, in carrying value of structured settlement finance
receivables that generated gain on sale of receivables of approximately
$6,833,000 and $8,020,000 respectively. Approximately 35% of the securitized
structured settlements were originated by the Company since June 30, 1997. The
Company plans to continue to perform servicing of these receivables for a fee.
The proceeds from the sale of the receivables were used to pay down the

revolving credit facility. The Company plans to continue to originate structured
settlement finance receivables.

     From July 1, 1997 through October 8, 1997, SSC, MFC, and JGW made partner
or stockholder distributions of $2,173,000, $221,000, and $70,000, respectively.
In addition, SSC intends to distribute an estimated additional $2,000,000 to its
partners in October 1997.
 
                                      F-16
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------

NO DEALER, SALESPERSON OR ANY OTHER PERSON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION OR TO MAKE ANY REPRESENTATIONS OTHER THAN THOSE CONTAINED IN THIS
PROSPECTUS IN CONNECTION WITH THE OFFER MADE BY THIS PROSPECTUS AND, IF GIVEN OR
MADE, SUCH INFORMATION OR REPRESENTATIONS MUST NOT BE RELIED UPON AS HAVING BEEN
AUTHORIZED BY THE COMPANY, ANY OF THE SELLING STOCKHOLDERS OR ANY OF THE
UNDERWRITERS. THIS PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO SELL OR THE
SOLICITATION OF ANY OFFER TO BUY ANY SECURITY OTHER THAN THE SHARES OF COMMON
STOCK OFFERED BY THIS PROSPECTUS, NOR DOES IT CONSTITUTE AN OFFER TO SELL OR A
SOLICITATION OF ANY OFFER TO BUY THE SHARES OF COMMON STOCK BY ANYONE IN ANY
JURISDICTION IN WHICH SUCH OFFER OR SOLICITATION IS NOT AUTHORIZED, OR IN WHICH
THE PERSON MAKING SUCH OFFER OR SOLICITATION IS NOT QUALIFIED TO DO SO, OR TO
ANY PERSON TO WHOM IT IS UNLAWFUL TO MAKE SUCH OFFER OR SOLICITATION. NEITHER
THE DELIVERY OF THIS PROSPECTUS NOR ANY SALE MADE HEREUNDER SHALL, UNDER ANY
CIRCUMSTANCES, CREATE ANY IMPLICATION THAT INFORMATION CONTAINED HEREIN IS
CORRECT AS OF ANY TIME SUBSEQUENT TO THE DATE HEREOF.
 
UNTIL                   , 1997 ALL DEALERS EFFECTING TRANSACTIONS IN THE
REGISTERED SECURITIES, WHETHER OR NOT PARTICIPATING IN THIS DISTRIBUTION, MAY BE
REQUIRED TO DELIVER A PROSPECTUS. THIS IS IN ADDITION TO THE OBLIGATION OF
DEALERS TO DELIVER A PROSPECTUS WHEN ACTING AS UNDERWRITERS AND WITH RESPECT TO
THEIR UNSOLD ALLOTMENTS OR SUBSCRIPTIONS.
 
                            ------------------------
 
                               TABLE OF CONTENTS
                                                                    PAGE
                                                                    -----
       Prospectus Summary..........................................     3
       Risk Factors................................................     8
       The Reorganization and Change in Tax Status.................    18
       Use of Proceeds.............................................    20
       Distributions and Dividend Policy...........................    20
       Capitalization..............................................    21
       Dilution....................................................    22
       Selected Combined Financial Data............................    23
       Management's Discussion and Analysis of Financial Condition
         and Results of Operations.................................    25
       Business....................................................    34
       Management..................................................    47
       Principal and Selling Stockholders..........................    52
       Certain Relationships and Related Party Transactions........    53
       Description of Capital Stock................................    56
       Shares Eligible for Future Sale.............................    58
       Underwriting................................................    59
       Legal Matters...............................................    60
       Experts.....................................................    60
       Additional Information......................................    61
       Annual and Quarterly Reports................................    61
       Index to Combined Financial Statements......................   F-1

--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
 
                                5,286,738 Shares
 
                                    [LOGO]
 
                                 J.G. WENTWORTH
                                       &
                                 COMPANY, INC.
 
                                  Common Stock
 
                            ------------------------
                                   PROSPECTUS
                            ------------------------
 
                       PRUDENTIAL SECURITIES INCORPORATED
 
                            OPPENHEIMER & CO., INC.
 
                                  FURMAN SELZ
 
                                              , 1997
 
--------------------------------------------------------------------------------
--------------------------------------------------------------------------------
PART II
                     INFORMATION NOT REQUIRED IN PROSPECTUS
 
ITEM 13.  Other Expenses of Issuance and Distribution.
 
     The following table sets forth expenses in connection with the issuance and
distribution of the securities being registered, all of which are being borne by
the Registrant.
 
Securities and Exchange Commission registration fee..............   $   29,477
National Association of Securities Dealers, Inc. fee.............       10,276
Nasdaq Stock Market Inc./National Market listing fee.............       50,000
Printing and engraving expenses..................................      200,000
Accountants' fees and expenses...................................      225,000
Legal fees and expenses..........................................      400,000
Blue Sky qualification fees and expenses.........................        8,000
Transfer agent's fees and expenses...............................       10,000
Director's and officer's insurance...............................       10,000
Miscellaneous....................................................       57,247
                                                                    ----------
     TOTAL.......................................................   $1,000,000
                                                                    ----------
                                                                    ----------
 
     The foregoing, except for the Securities and Exchange Commission
registration fee, the National Association of Securities Dealers, Inc. fee, and
the Nasdaq Stock Market fee are estimates.
 
ITEM 14.  Indemnification of Directors and Officers.
 
     Under Section 145 of the Delaware General Corporation Law, as amended, the
Registrant has the power to indemnify directors and officers under certain
prescribed circumstances and subject to certain limitations against certain
costs and expenses, including attorneys' fees actually and reasonably incurred
in connection with any action, suit or proceeding, whether civil, criminal,
administrative or investigative, to which any of them is a party by reason of
his being a director or officer of the Registrant if it is determined that he
acted in accordance with the applicable standard of conduct set forth in such
statutory provision.
 
     Article VIII of the Registrant's Bylaws filed as Exhibit 32 hereby provides
indemnification to directors, officers and other agents of the Registrant
against all expenses, liability and loss incurred as a result of such person's
being a party to, or threatened to be made a party to, any action, suit or
proceeding by reason of the fact that he or she is or was a director or officer
of the Registrant or is or was serving at the request of the Registrant as a
director, officer, employee or agent of another enterprise, to the fullest
extent authorized by the Delaware General Corporation Law. Article VIII further
permits the Registrant to maintain insurance, at its expense, to protect itself
and any such director or officer of the Registrant or another enterprise against
any such expenses, liability or loss, whether or not the Registrant would have
the power to indemnify such person against such expense, liability or loss under
the Delaware General Corporation Law. Amendments, repeals or modifications of

Article VIII can only be prospective and such changes require the affirmative
vote of not less than two-thirds of the outstanding shares of stock of the
Registrant entitled to vote in elections of directors.
 
     The Registrant intends to purchase directors' and officers' liability
insurance.
 
     See Article 7 of the Underwriting Agreement, filed as Exhibit 1 hereto,
pursuant to which the Underwriters agree to indemnify the Registrant, its
directors, officers and controlling persons against certain liabilities,
including liabilities under the Securities Act of 1933.
 
                                      II-1
ITEM 15.  Recent Sales of Unregistered Securities.
 
     Immediately prior to the completion of the Offering, the Company will issue
to the Existing Stockholders 12,466,367 shares of Common Stock in exchange for
the contribution by the Existing Stockholders of their interests in the J.G.
Wentworth Affiliated Companies.
 
ITEM 16.  Exhibits and Financial Statement Schedules.
 
     (a) Exhibits
EXHIBIT
NUMBER        DESCRIPTION
-------       ----------------------------------------------------------------------------------------------------
*1      --   Form of Underwriting Agreement.
 *3.1    --   Certificate of Incorporation of the Company.
 *3.2    --   By-laws of the Company.
  5      --   Opinion of Wolf, Block, Schorr and Solis-Cohen LLP with respect to the legality of the securities
              being offered.
*10.1    --   1997 Stock Incentive Plan.
*10.2    --   Form of Employment Agreement by and between the Company and James D. Delaney.
*10.3    --   Form of Employment Agreement by and between the Company and Gary Veloric.
*10.4    --   Form of Employment Agreement by and between the Company and Michael B. Goodman.
*10.5    --   Employment Agreement by and between the Company and Andrew S. Hillman dated October 13, 1997.
*10.6    --   Form of Contribution Agreement among the Company and the Existing Stockholders.
*10.7    --   Form of Tax Indemnity Agreement among the Company, JGW, the General Partners and the Existing
              Stockholders.
*10.8    --   Amended and Restated Credit Agreement, by and between SSC, the Lenders listed therein and ING and a
              Bank, dated February 11, 1997.
*10.9    --   Credit Agreement among MFC, the MFC Funding, the Lenders listed therein and ING dated May 26, 1995.
*10.10   --   Master Trust Indenture and Security Agreement between J.G. Wentworth Receivables III LLC
              ('Receivables III'), JGW and a Bank dated as of September 30, 1997.
*10.11   --   Master Trust Indenture and Security Agreement, Series 1997-A Supplement between Receivables III, JGW
              and a Bank dated as of September 30, 1997.
*10.12   --   Purchase and Contribution Agreement between SSC and J.G. Wentworth Receivables II LLC ('Receivables
              II') dated as of September 30, 1997.
*10.13   --   Purchase and Contribution Agreement (Issuer-Purchase Agreement) between Receivables II and
              Receivables III dated as of September 30, 1997.
*10.14   --   Note Purchase Agreement between the Note Purchasers, named therein, and Receivables III dated as of
              September 30, 1997.
*10.15   --   Amended and Restated Collateral Trust and Intercreditor Agreement among ING, a Bank, as Servicing
              Agent, other Lender referred to therein, Receivables I, Receivables III, SSC, Receivables II and JGW
              dated as of September 30, 1997.
*10.16   --   Collateral Trust and Intercreditor Agreement among ING, a Bank, other Lender referred to therein,
              J.G. Wentworth Receivables I LLC ('Receivables I'), SSC and JGW dated as of June 13, 1997.
*10.17   --   Certificate Purchase Agreement among the Purchasers set forth therein, SSC Master Trust I ('Trust
              I'), Receivables I and a Bank dated as of June 13, 1997.
II-2
EXHIBIT
NUMBER        DESCRIPTION
-------       ----------------------------------------------------------------------------------------------------
*10.18   --   Purchase Agreement between SSC and Receivables I dated as of June 13, 1997.
*10.19   --   Pooling and Servicing Agreement, Series 1997-I Supplement, between Receivables I, JGW and a Bank
              dated as of June 13, 1997.
*10.20   --   Pooling and Servicing Agreement, Trust I, between Receivables I, JGW and a Bank dated as of June 13,
              1997.
 11      --   Statement regarding Computation of Per Share Earnings.
*23.1    --   Consent of Coopers & Lybrand L.L.P.
 23.2    --   Consent of Wolf, Block, Schorr and Solis-Cohen LLP (included as part of Exhibit 5).
*24      --   Power of Attorney (included on signature page of this Registration Statement).
*27      --   Financial Data Schedule
*99.1    --   Consent to be Named as a Proposed Director, for Gerard E. Bisbee, Jr.
*99.2    --   Consent to be Named as a Proposed Director, for Philip J. Kendall.
*99.3    --   Consent to be Named as a Proposed Director, for Anthony C. Salvo.
------------------
  * Filed herewith
 
     (b) Financial Statement Schedules
 
     The following Schedules are filed with this Registration Statement.
 
ITEM 17.  Undertakings.
 
     The undersigned Registrant hereby undertakes to provide to the underwriter
at the closing specified in the underwriting agreements, certificates in such
denominations and registered in such names as required by the underwriter to
permit prompt delivery to each purchaser.
 
     Insofar as indemnification for liabilities arising under the Securities Act
of 1933 may be permitted to directors, officers and controlling persons of the
Registrant pursuant to Item 14 above, or otherwise, the Registrant has been
advised that in the opinion of the Securities and Exchange Commission such
indemnification is against public policy as expressed in the Act and is,
therefore, unenforceable. In the event that a claim for indemnification against
such liabilities (other than the payment by the Registrant of expenses incurred
or paid by a director, officer or controlling person of the Registrant in the
successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.
 
     The undersigned Registrant hereby undertakes that:
 
          (1) For purposes of determining any liability under the Securities Act

     of 1933, the information omitted from the form of prospectus filed as part
     of this registration statement in reliance upon Rule 430A and contained in
     a form of prospectus filed by the Registrant pursuant to Rule 424(b)(1) or
     (4) or 497(h) under the Securities Act shall be deemed to be part of this
     registration statement as of the time it was declared effective.
 
          (2) For the purpose of determining any liability under the Securities
     Act of 1933, each post-effective amendment that contains a form of
     prospectus shall be deemed to be a new registration statement relating to
     the securities offered therein, and the offering of such securities at that
     time shall be deemed to be the initial bona fide offering thereof.
 
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     All other schedules for which provision is made in the applicable
accounting regulations of the Securities and Exchange Commission are not
required under the related instructions or are inapplicable or the required
information is given in the Combined Financial Statements of the J.G. Wentworth
Affiliated Companies or the Notes thereto, and therefore have been omitted.
 
                                      II-3
SIGNATURES
 
     Pursuant to the requirements of the Securities Act of 1933, the Registrant
has duly caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in Philadelphia, Pennsylvania on the
13th day of October, 1997.
 
                                       J.G. WENTWORTH & COMPANY, INC.
 
                                       By: /s/ James D. Delaney
                                           -------------------------------------
                                           James D. Delaney
                                           President and Chief Executive Officer
 
                               POWER OF ATTORNEY
 
     KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James D. Delaney and Gary Veloric, and each of
them, his true and lawful attorneys-in-fact and agents, with full power of
substitution and resubstitution, for him and in his name, place and stead, in
any and all capacities, to sign any and all amendments to this Registration
Statement, and to file the same, with all exhibits thereto, and other documents
in connection herewith, with authority to do and perform each and every act and
thing requisite and necessary to be done in and about the premises as fully to
all intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorneys-in-fact and agents, or their substitutes, may
lawfully do or cause to be done by virtue thereof.
 
     Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed by the following persons in the
capacities and on the dates indicated.
 
          SIGNATURE                         TITLE                     DATE
------------------------------   ----------------------------   ----------------
 
       /s/ Gary Veloric          Chairman of the Board of       October 13, 1997
------------------------------   Directors
         Gary Veloric
 
      /s/ James D. Delaney       President, Chief Executive     October 13, 1997
------------------------------   Officer and Director
       James D. Delaney          (principal executive
                                 officer)
 
    /s/ James J. O'Malley        Vice President and Chief       October 13, 1997
------------------------------   Financial Officer (principal
      James J. O'Malley          financial and accounting
                                 officer)
 
    /s/ Michael B. Goodman       Executive Vice President,      October 13, 1997
------------------------------   Chief Operating Officer and
      Michael B. Goodman         Director

     /s/ Edward S. Stone         Director                       October 13, 1997
------------------------------
       Edward S. Stone
 
                                      II-4
INDEX TO EXHIBITS
EXHIBIT                                                                                                                 SEQUENTIAL
NUMBER        DESCRIPTION                                                                                                 PAGE NO.
-------       ----------------------------------------------------------------------------------------------------      -----------
*1      --   Form of Underwriting Agreement.
 *3.1    --   Certificate of Incorporation of the Company.
 *3.2    --   By-laws of the Company.
  5      --   Opinion of Wolf, Block, Schorr and Solis-Cohen LLP with respect to the legality of the securities
              being offered.
*10.1    --   1997 Stock Incentive Plan.
*10.2    --   Form of Employment Agreement by and between the Company and James D. Delaney.
*10.3    --   Form of Employment Agreement by and between the Company and Gary Veloric.
*10.4    --   Form of Employment Agreement by and between the Company and Michael B. Goodman.
*10.5    --   Employment Agreement by and between the Company and Andrew S. Hillman dated October 13, 1997.
*10.6    --   Form of Contribution Agreement among the Company and the Existing Stockholders.
*10.7    --   Form of Tax Indemnity Agreement among the Company, JGW, the General Partners and the Existing
              Stockholders.
*10.8    --   Amended and Restated Credit Agreement, by and between SSC, the Lenders listed therein and ING and a
              Bank, dated February 11, 1997.
*10.9    --   Credit Agreement among MFC, the MFC Funding, the Lenders listed therein and ING dated May 26, 1995.
*10.10   --   Master Trust Indenture and Security Agreement between J.G. Wentworth Receivables III LLC
              ('Receivables III'), JGW and a Bank dated as of September 30, 1997.
*10.11   --   Master Trust Indenture and Security Agreement, Series 1997-A Supplement between Receivables III, JGW
              and a Bank dated as of September 30, 1997.
*10.12   --   Purchase and Contribution Agreement between SSC and J.G. Wentworth Receivables II LLC ('Receivables
              II') dated as of September 30, 1997.
*10.13   --   Purchase and Contribution Agreement (Issuer-Purchase Agreement) between Receivables II and
              Receivables III dated as of September 30, 1997.
*10.14   --   Note Purchase Agreement between the Note Purchasers, named therein, and Receivables III dated as of
              September 30, 1997.
*10.15   --   Amended and Restated Collateral Trust and Intercreditor Agreement among ING, a Bank, as Servicing
              Agent, other Lender referred to therein, Receivables I, Receivables III, SSC, Receivables II and JGW
              dated as of September 30, 1997.
*10.16   --   Collateral Trust and Intercreditor Agreement among ING, a Bank, other Lender referred to therein,
              J.G. Wentworth Receivables I LLC ('Receivables I'), SSC and JGW dated as of June 13, 1997.
*10.17   --   Certificate Purchase Agreement among the Purchasers set forth therein, SSC Master Trust I ('Trust
              I'), Receivables I and a Bank dated as of June 13, 1997.
*10.18   --   Purchase Agreement between SSC and Receivables I dated as of June 13, 1997.
*10.19   --   Pooling and Servicing Agreement, Series 1997-I Supplement, between Receivables I, JGW and a Bank
              dated as of June 13, 1997.
*10.20   --   Pooling and Servicing Agreement, Trust I, between Receivables I, JGW and a Bank dated as of June 13,
              1997.
 11      --   Statement regarding Computation of Per Share Earnings.
*23.1    --   Consent of Coopers & Lybrand L.L.P.
 23.2    --   Consent of Wolf, Block, Schorr and Solis-Cohen LLP (included as part of Exhibit 5).
*24      --   Power of Attorney (included on signature page of this Registration Statement).

*27      --   Financial Data Schedule
*99.1    --   Consent to be Named as a Proposed Director, for Gerard E. Bisbee, Jr.
*99.2    --   Consent to be Named as a Proposed Director, for Philip J. Kendall.
*99.3    --   Consent to be Named as a Proposed Director, for Anthony C. Salvo.
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  * Filed herewith