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Burford German Funding Sued Over Hausfeld Ownership Stake

By Harry Moran |

The ownership or funding of law firms by litigation funders continues to be a hot topic in the world of legal funding, with models such as alternative business structures (ABS) gaining momentum in places like Arizona. However, a complaint filed by a client in Delaware reveals a falling out due to the reverse funding model, where a law firm maintained an ownership stake in the funder.

Reporting by Bloomberg Law covers a new lawsuit brought against Burford German Funding (BGF), an affiliate of Burford Capital, by a client who claims that the funder failed to disclose the fact that BGF was partly owned by the same law firm it nominated to lead the client’s antitrust cases. Financialright Claims GMBH (FRC) alleges that when it negotiated the funding agreement with BGF for its antitrust litigation against the trucks cartel, it had no knowledge “that Hausfeld  was  also  a  part  owner  of  BGF  through  an  entity  called German Litigation Solutions LLC (“GLS”) or that one of the lead German partners at Hausfeld responsible for the firm’s representation of FRC had a personal stake.”

The complaint, filed by FRC in the Delaware Superior Court, explains that as Hausfeld is part-owner of BGF, and the funding agreement “provides for a share of FRC’s recoveries in the Trucks Litigations to flow to FRC’s lawyers”, this constitutes a contingency fee arrangement which are illegal under German law.  FRC had filed a lawsuit against Hausfeld in a German court and then applied for discovery from BGF, Burford and GLS in the Delaware District Court, which was followed by an assertion by these parties that the application for discovery “is subject to mandatory arbitration” under the terms of the funding agreement.

FRC argues that “as  a  direct  result  of  BGF’s  fraud  on  FRC,  FRC  did  agree  to  the Arbitration Agreement that—according to BGF—subsumes disputes between FRC and GLS.” However, FRC claims that it “would  never  have  agreed  to  an  arbitration  clause  requiring  it  to arbitrate claims against Hausfeld”, were it not for the concealment of Hausfeld’s ownership stake in BGF. FRC is therefore asking the Superior Court to declare that “BGF fraudulently induced  FRC  into  agreeing  to  the  Arbitration  Agreement”, and that the agreement should be declared both invalid and unenforceable.

Lisa Sharrow, spokesperson at Hausfeld LLP, provided the following statement:  “The US-based Hausfeld LLP and the UK-based Hausfeld & Co LLP hold indirect economic minority interests in Burford German Funding. These are separate legal entities from Hausfeld Rechtsanwälte LLP that do not practice law in Germany. Burford German Funding was of course developed and set up in a way that was fully compliant with all relevant regulations.”

David Helfenbein, spokesperson at Burford, also provided a response to Bloomberg via email: “There is a dispute in Germany between a client Burford has funded and its lawyers. Burford is not a party to that dispute and its outcome has no impact on us. This Delaware proceeding is a third-party discovery request to Burford for material for the German litigation, which Burford believes should be adjudicated in arbitration and not in the Delaware courts.”

The full complaint filed by FRC can be read here.

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Harry Moran

Harry Moran

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Case Developments Comercial

Bench Walk to Recoup First Cut of Lupaka’s $65M Peru Award

By John Freund |

Canadian miner Lupaka Gold has landed the sort of out-of-the-blue windfall that keeps arbitration funders in business. An ICSID tribunal has ordered the Republic of Peru to pay the TSX-V-listed junior roughly $65 million—the full compensation Lupaka sought over the 2018 shuttering of its Invicta gold project, plus costs and compound interest dating back nearly six years.

A press release in GlobeNewswire states that Lupaka will not be the first to collect the proceeds. Under its non-recourse financing agreement, the initial distributions flow to Bench Walk Advisors, the New York- and London-based funder that bankrolled the treaty claim and fronted more than US $4 million in arbitration costs. Only after Bench Walk is made whole—and receives its agreed return—will the miner’s shareholders see any cash.

The award exemplifies how litigation finance is reshaping investor-state disputes. Bench Walk assumed the risk that Peru might prevail or drag the process out indefinitely; in exchange it now stands to crystalise a sizeable, near-term return once enforcement begins. Lupaka’s management, for its part, concedes that “a few more hoops” remain before Peru’s treasury wires the money, but the tribunal’s merits ruling removes the biggest hurdle.

The case reinforces third-party funding’s strategic utility for smaller resource companies facing sovereign interference—especially in Latin America’s mining belt, where political risk remains acute. Funders will parse the award’s interest mechanics as a template for quantifying damages over protracted timelines. More broadly, the result helps validate Bench Walk’s aggressive expansion into treaty arbitration and may spur peers to chase similar high-beta opportunities, even as governments and the UN-backed ICSID reform process debate tighter disclosure around funding arrangements.

Case Developments Comercial

Argentina Seeks UK Stay on $16 B YPF Judgment Backed by Burford

By John Freund |

Even as a U.S. court ordered the hand-over of YPF shares, Argentina raced to London’s High Court to stall UK recognition of the same multi-billion award.

An article in Reuters recounts how government counsel told the court that enforcing the U.S. judgment before appellate review would cause no prejudice because “there are no assets here” to seize. The Burford-funded plaintiffs countered that Argentina’s bid is a delay tactic and asked for a £2.0 billion security if any pause is granted, noting interest is compounding at US $2.5 million per day.

The duelling venues highlight Burford’s trans-Atlantic enforcement campaign and the growing strategic sophistication of funders in sovereign disputes. London has become the favoured battleground for enforcing U.S. commercial awards against states, thanks to Section 101 of the 2006 Arbitration Act and the city’s deep asset pool.

For funders, the hearing underscores the need to pursue parallel forums to pressure recalcitrant states—especially when holdings (like YPF shares) sit outside the U.S. A reserved security order could significantly raise Argentina’s cost of delay and signal to other sovereign debtors that London courts will not rubber-stamp tactical pauses. The outcome will be closely watched by hedge funds and litigation financiers eyeing distressed-sovereign opportunities.

Case Developments Comercial

Burford Keeps Control in Turkey Price-Fixing Antitrust Battle

By John Freund |

A federal magistrate in Chicago has handed Burford Capital a fresh victory in its effort to monetise Sysco-assigned antitrust claims against the U.S. turkey industry.

An article in Reuters reports that Judge Sunil Harjani rejected arguments from Tyson Foods, Perdue, Hormel and Butterball that Burford’s affiliate, Carina Ventures, lacked standing or offended public policy by pursuing the case despite never purchasing a single drumstick. Harjani’s opinion emphasised that Congress—not the courts—must decide whether third-party funding is permissible and found no evidence Carina or Burford had distorted the litigation. He also brushed aside a Sysco-centric fairness attack, noting that sophisticated businesses are free to structure their claims as they see fit.

The order is the latest twist in Burford’s multiyear protein-price saga. After investing US $140 million to bankroll Sysco’s chicken, pork and turkey cartel suits, the funder clashed with its client over settlement strategy, ultimately receiving the claims by assignment. With chicken and pork fights largely resolved, the turkey docket is now a bell-wether for whether funders can step directly into plaintiffs’ shoes when contracts allow.

For litigation financiers, Harjani’s ruling reinforces that properly drafted assignments can survive policy challenges, even in food-price cases that attract political scrutiny. The decision also undercuts insurer-driven narratives that funding itself inflates “social inflation.”