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Commercial Fundraising

Bloomberg Law on Historic ‘Secondary Deal Fund’ Landing $750M 

By John Freund |

Bloomberg Law profiles Ashley Keller and Adam Gerchen as serial law entrepreneurs who have now raised $750M to fund the first secondary transaction litigation fund. Six years ago, Mr. Keller and Mr. Gerchen made headlines by selling their litigation finance firm for upwards of $160M to Burford Capital. Bloomberg Law reports that the secondary deal landscape for litigation finance is in its infancy. News of Keller and Gerchen’s new secondary market fund (under the banner of Gerchen Capital Partners) is being viewed as a signal of the maturing nature of litigation investment broadly. 

According to Bloomberg Law, $225M of proceeds from the fund have been dispatched. In one instance, funds were disbursed to purchase a 30% stake from Omni Bridgeway’s investment in an Australian class action. Sources say Omni was overweight with ‘combustible cladding’ claims in Australia and decided to offload some of the risk to the secondary market. 

Bloomberg reports that Gerchen Capital Partners submitted $19.5M to Omni for the stake. A regulatory filing discloses Omni banking a $16M profit for the transaction. Bloomberg’s insights suggest that Mr. Keller and Mr. Gerchen are looking to usher in a robust secondary marketplace for litigation investors.

Active debate around a robust secondary market for litigation finance is ongoing. Many suggest that savvy litigation funders would only offload assets if concerned about losing the claim, or not being able to enforce a successful outcome. However, others suggest the needs of litigation franchises change over time, as claims can often take years to reach resolution. Hence there may be a need for a secondary market in Litigation Finance.

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John Freund

John Freund

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Commercial Deals

iLA Law Firm Expands Services to Include Litigation Funding Agreements

By Harry Moran |

As the relationship between litigation funders and law firms continues to grow intertwined, we are not only seeing funders getting more involved in the ownership of law firms, but also specialist law firms looking to provide their own niche litigation funding services.

An article in Legal Futures covers the expansion of iLA into the business of litigation funding agreements, with the Poole-based law firm providing this new service offering to a range of clients from individuals to SMEs. iLA’s co-founder and chief finance officer, Luke Baldwin, explained that one aspect of the law firm’s litigation funding service includes work on matrimonial cases, providing funding of between £25,000 to £75,000 to individual clients. Other examples include funding for disputes brought by SMEs over ‘undisclosed commissions on energy contracts’, or individuals with claims relating to car finance agreements.

iLA was founded in March 2022 by Mr Baldwin and Anastasia Ttofis, with both co-founders having previously worked together on their Bournemouth-based brokerage business, Niche Specialist Finance. Since its launch, iLA has grown from servicing 13 clients in its first month to providing independent legal advice to between 600 and 700 clients. iLA’s growth has been bolstered by a series of partnerships with other solicitors, brokers and lenders, including a partnership with the specialist mortgage lender, Keystone Property Finance.

Announcements Commercial People Moves

ALFA Welcomes Mackay Chapman as Newest Associate Member

By Harry Moran |

In a post on LinkedIn, The Association of Litigation Funders of Australia (ALFA) announced that it is welcoming Mackay Chapman as its newest Associate Member. Mackay Chapman becomes the 12th Associate Member of ALFA, following the inclusion of Litica in April of this year.

Mackay Chapman is a boutique legal and advisory firm, specialising in high-stakes regulatory, financial services and insolvency disputes. The Melbourne-based law firm was founded in 2016 by Dan Mackay and Michael Chapman, who bring 25 years of experience in complex disputes to the business.More information about Mackay Chapman can be found on its website.

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Case Developments Commercial

Deminor Announces Settlement in Danish OW Bunker Case

By Harry Moran |

An announcement from Deminor Litigation Funding revealed that a settlement has been reached in the OW Bunker action in Demark, which Deminor funded litigation brought by a group of 20 institutional investors against the investment banks Carnegie and Morgan Stanley.

This is part of a wider group of actions originating from OW Bunker’s 2014 bankruptcy, which led to significant financial losses for both company creditors and shareholders who had invested in the company. These other cases were brought against several defendants, including OW Bunker and its former management and Board of Directors, Altor Fund II, and the aforementioned investment banks.

The settlement provides compensation for plaintiffs across the four legal actions, with a total value of approximately 645 million DKK, including legal costs. The settlement agreement requires the parties to ‘waive any further claims against each other relating to OW Bunker’. Deminor’s announcement makes clear that ‘none of the defendants have acknowledged any legal responsibility in the group of linked cases in connection with the settlement.’

Charles Demoulin, Chief Investment Officer of Deminor, said that “the settlement makes it possible for our clients to benefit from a reasonable compensation for their losses”, and that they were advising the client “to accept this solution which represents a better alternative to continuing the litigation with the resulting uncertainties.” Joeri Klein, General Counsel Netherlands and Co-head Investment Recovery of Deminor, said that the settlement had demonstrated that “in Denmark it has now proven to be possible to find a balanced solution to redress investor related claims.”