Trending Now

All Articles

3458 Articles
Commercial Deals

Distressed Restructurings Generate Opportunities for Funders in the Middle East

As the litigation finance industry continues to grow and industry leaders find themselves in an increasingly competitive market, opportunities in emerging markets will represent a top priority for funders to establish a dominant position in new regions. The Middle East stands out as one of the most promising markets for funders, with a growing financial infrastructure and governments looking to modernise their legal systems, opportunities for high value litigation funding in the region will proliferate. Reporting by Debtwire examines the current state of litigation finance in the Middle East, with a particular focus on the role of funders in distressed restructurings and their acquisitions of non-performing loans (NPLs).  The article highlights Omni Bridgeway’s partnership with the IFC, which created a $100 million investment vehicle that could provide banks with a solution to NPLs. Marjin Flinterman, senior investment manager at Omni Bridgeway, argues that banks saddled with challenging NPLs are turning to funders who ‘are often better equipped to extract value through developing and implementing international recovery strategies.’ Debtwire notes Arabtec and NMC Health as examples of situations which are prompting funders, such as Burford Capital, Omni Bridgeway and Phoenix Advisers, to acquire bad debt and then capitalise on returns from future litigation. Phoenix Advisers’ CEO, Dilip Massand, suggests that by acquiring some of the debt in these distressed situations, ‘one would be able to ‘take a few more bites at the apple’ by getting the [right of first refusal] on the ultimate litigation claims.’  Daniel Hall, managing director at Burford Capital, does caution that despite the interest in these distressed restructurings, ‘there are a lot more people talking about NPLs than actually doing them.’ Outside of NPL-related litigation, there is still plenty of interest from funders in litigation going through common law courts, where cases can generate significant value. Lexolent’s Jonathan Davidson also argues that litigation in the local courts can offer tangible benefits as ‘the proceedings tend to be less expensive, there are less adverse cost consequences and local lawyers, like barristers, are accustomed to working on the basis of fixed fees or retainers.’
The LFJ Podcast
Hosted By Anthony Johnson |
In this episode, we speak with Anthony Johnson, Founder and CEO of Stellium, a legal data and technology company disrupting the Legal Services industry through innovative solutions that improve accountability and standards for investing in lawsuits globally. Anthony discusses Stellium's mission and disruptive innovations, how law firms and litigation funders can leverage Stellium's suite of products and services, how Stellium is bridging the gap between the Legal Services industry and investors in the space, and his predictions for the future of the Mass Torts sector, specifically. [podcast_episode episode="11290" content="title,player,details"]
Case Developments Commercial

Pending US Supreme Court Decision is a Coinbase Class Action Cliffhanger

Coinbase's business has been seminal to the legacy of cryptocurrency innovation. As the global digital asset marketplace continues to mature, Coinbase is tiptoeing between a group of class action lawsuits. Now, the United States Supreme Court is deliberating if Coinbase should be protected by mandatory arbitration.   Benzinga reports that in March 2023, the U.S. Supreme Court appeared uncertain regarding whether to allow Coinbase to move to arbitration over class actions which had been launched against the firm. Executives at Coinbase argued that private arbitration is a win for business.  The June decision by the Supreme Court will spell a new dynamic for cryptocurrency sector litigation. Some digital asset scholars predict that a lack of mandatory arbitration may devastate business dynamics at Coinbase. Allowing class action lawsuits to continue is an expensive proposition that would inevitably impact the pace of cross-border crypto innovation. Meanwhile, U.S. and global regulatory uncertainty is stoking new legislation that could fuel litigation well into the future.  The efficient nature of digital asset technology is at a crossroads. The Coinbase decision, commingled with upcoming regulatory requirements worldwide, will shape business dynamics for enterprise crypto software and the entrepreneurs behind future sector innovation. 
Commercial Regulatory Issues

Proposed Reforms to PTAB Include Third-Party Funding Disclosure

As intellectual property and patent litigation remain among the most active areas of interest for litigation funders, industry leaders will be watching carefully to see how the regulatory and oversight system continues to develop. Last week, the US Patent and Trademark Office (USPTO) announced an Advance Notice of Proposed Rulemaking (ANPRM), and is looking for public input across an array of proposed changes to proceedings taking place at the Patent Trial and Appeal Board (PTAB). Outlined in an article by Bloomberg Law, one of the key reforms put forward in the proposals includes changes to the “inter partes” review process, such as specifying who can request such a review and under what circumstances the PTAB will deny those reviews. Importantly for funders, another proposal looks to implement mandatory disclosure of any ownership interest or third-party litigation funding related to a patent, mirroring similar efforts to enhance funding disclosure in patent litigation. The USPTO’s director, Kathi Vidal stated in the April 20 press release: “Our goal is to better ensure our practices align with the USPTO’s mission to promote and protect innovation and investment, and with the congressional intent behind the AIA (America Invents Act) to provide a less expensive alternative to district court litigation to resolve certain patentability issues while also protecting against patentee harassment.”
Commercial Deals

Deminor Announces Global Strategic Partnership with the Grimaldi Alliance

The growth and maturation of the litigation finance industry has seen funders increasingly focused on building strategic partnerships with law firms and clients, rather than simply looking to grow the business through individual case investments. A tangible example of this shift in approach comes from leading funder Deminor, which has announced a strategic partnership with the Grimaldi Alliance. Detailed in an announcement by Deminor, the partnership will position the funder as the ‘partner of choice’ for the Italian law firm and its global network of partners. Deminor’s CEO, Erik Bomans praised the new partnership and stated: “Our complementary international footprint, combined with multi-jurisdictional client requirements, have led to a natural fit with the Grimaldi Alliance, both strategically and culturally.” Speaking for the Grimaldi Alliance, Francesco Sciaudone, managing partner at Grimaldi, also highlighted the synergy between Deminor’s global strategy and his law firm’s multi-jurisdictional reach. Sciaudone highlighted the scope of the Grimaldi Alliance’s presence, which includes “the Italian market (with more than 9 offices throughout the peninsula) and in the European and international markets, where Grimaldi Alliance is present with well-qualified and integrated teams, in addition to offices in Brussels, Paris, London, worldwide with more than 60 jurisdictions.”
Announcements Commercial Deals

Three Quarters of Law Firms Would Consider External Ownership

Three quarters of law firms would consider selling a percentage of their business to an external buyer, new research has revealed.

A survey of 200 law firm partners commissioned by Harbour, the world’s largest independent litigation funder and law firm lender, showed that 149 of the 200 partners surveyed said their firm would consider external ownership.

The most willing to sell a percentage were the firms with a turnover of between £5m and £10m with all those questioned saying their firm would consider it.

The next most willing to consider external ownership were firms with a turnover of between £50m - £100m (89%), £30m - £50m (86%) and £10m - £30m (79%).

Those least likely to sell were those with turnovers of £400m - £500m (22%) and £100m - £400m (48%).

Of those who said they would not consider external ownership, loss of control was most cited (51%) as the key issue that would need to be resolved before they would consider selling. Other factors included future partner compensation (47%), obtaining partner consensus (37%) loss of employees (33%) and loss of culture or ethos (31%).

The survey revealed that the vast majority of law firms are willing to consider using alternative funding in the next year to 18 months, though 83% of firms said they would consider using cash reserves or asking for increased investment from partners.

Popular forms of alternative funding included bank loans (82%), greater use of contingency fee or damages based agreements (DBA) (79%), credit or lending facilities from litigation funders (78%) and stock market listing/non-lawyer shareholders (77%).

Ellora MacPherson, Managing Director and Chief Investment Officer at Harbour, said: “These results show that the legal sector is well and truly open for investment from external sources. With 75% of law firms considering external ownership, it is a fascinating time in the market with the trend for mergers and acquisitions set to continue. Our survey shows this isn’t just the smaller firms, but also those with substantial turnovers.

“In addition, with law firms and their partners having weathered turbulent economic times during the pandemic, it is clear that many are looking at alternative forms of investment. At a time of high interest rates, specialist lenders to the legal sector, who understand lawyers and law firms, are well-placed to provide attractive finance options.”

Survey methodology

200 law firm partners were interviewed online by Censuswide between 05.07.2022 - 20.07.2022.

About Harbour Litigation Funding

Harbour Litigation Funding is the world’s largest independently owned litigation funder. Since launching in 2007, the business has been at the forefront of the growth and development of the global funding market.

Headquartered in London, the business funds cases across the globe ranging from one-off disputes valued from circa. £1m to portfolios of multi-million-pound cases. It also funds the growth of law firms by offering credit facilities and through equity investments.

Harbour is a founder member of the Association of Litigation Funders (ALF), a member of the International Legal Finance Association (ILFA) and the Commercial Litigators’ Forum.

Ellora Macpherson is managing director and chief investment officer.

Announcements Consumer

Gain Brand Launches, Commits to Leveling the Insurance Playing Field

Gain, a comprehensive medical lien servicing and legal funding company with an artificial intelligence-powered platform, launched today. Previously, the company had been doing business as a variety of operating companies, including Cherokee Legal Holdings, Cherokee Funding and Gain Servicing. The rebrand is meant to streamline the companies and build efficiencies in order to serve as a centralized, AI-powered hub to those with medical lien servicing and legal funding needs. “Since 2011, we have provided legal and medical funding services. Over the years, we have added new companies, new divisions and expanded offerings. Our exceptional growth has led us to today. An exciting time has come in the evolution of our organization and that is the need to streamline all of our services and capabilities under one go-to-market brand,” said Gain Founder and CEO Reid Zeising in a recent letter to clients. “Under our new company name, we aspire to provide solutions and services that are undeniably Gain.” With two-year revenue growth of 251%, Gain recently ranked no. 83 on Inc. magazine’s list of the Southeast Region’s Fastest-Growing Private Companies. Between 2005 and 2022, Gain, doing business as Cherokee Legal Holdings, Cherokee Funding and Gain Servicing, has provided $250 million in medical care and serviced $800 million in medical liens. Honored with three Inc. 5000 designations, 15,000 law firm partners, and over 3,000 health care clients, Gain is well-positioned for continued growth. The new brand identity and company consolidation was launched initially on an updated website, www.gainservicing.com. The company headquarters are and will remain in Atlanta, Ga. About Gain Gain is the fastest growing medical lien servicing and legal funding company in the United States. Gain’s innovative artificial intelligence-enabled servicing platform and its collective services and solutions come together to meaningfully serve the personal injury ecosystem and create better outcomes. Gain is the critical hub connecting medical providers, lawyers and personal injury plaintiffs. Gain’s industry-leading platform serves as the source of truth, providing both needed transparency and efficiency for all of those supporting personal injury cases and plaintiffs. Gain is committed to leveling the insurance playing field for those injured through no fault of their own. To learn more, go to gainservicing.com. Contact: Kris Altiere (470) 713-6621 kris@gainservicing.com
Commercial Deals

Singaporean Bondholders Seeking Funding for Class Action over Credit Suisse Rescue

Last month saw the dramatic collapse of a trio of mid-size U.S. banks including Silicon Valley Bank, and in the aftermath, Credit Suisse found itself in dire need of rescue via its sale to UBS. However, the emergency deal to save Credit Suisse did not come without negative consequences, and in the ensuing weeks, it has appeared increasingly likely that bondholders will be pursuing several lawsuits across various jurisdictions. Reporting in Reuters covers the potential scope of the upcoming litigation, which has been prompted by the $3.4 billion rescue plan’s arrangement to write down around 16 billion Swiss francs of Additional Tier 1 (AT1) Credit Suisse debt. Bondholders in the United States, Switzerland, and Singapore are all reportedly exploring claims, with law firms including Quinn Emanuel Urquhart & Sullivan, Pallas Partners and Korein Tillery, all seeking to represent the claimants. Additionally, there are a number of class actions being proposed in the U.S. that would be brought on behalf of Credit Suisse shareholders. Additional reporting by Business Times zooms in on the bondholder litigation in Singapore, with lawyers representing Singaporean Credit Suisse AT1 bondholders looking to bring a class action lawsuit against the Swiss Government. Jonathan Lim, partner at WilmerHale, stated that the class action was seeking outside litigation funding to support a claim which alleges the bond write-down violated rules against ‘unfair state actions’ codified under the 2003 Singapore-European Free Trade Association.
Commercial

Providing Budgetary Certainty to In-House Counsel Through Litigation Funding

It has become increasingly clear that as the commercial litigation funding market continues to grow more competitive, funders are looking to broaden their client base with a focus on offering services to in-house counsel. Among the advantages that outside capital can provide to legal departments, one funder is stressing the value of providing budget certainty amidst the always unpredictable timing of litigation spending. In a feature in Legal Dive, Burford Capital’s co-COO, Aviva Will, highlights the common issue faced by general counsel that whilst they have a set quarterly budget to account for, outside law firms cannot always make those litigation costs reliably fit within quarterly constraints. As a result, Burford is looking to support GCs where possible by covering legal costs that would exceed the department’s litigation budget, allowing clients to have ‘certainty around when they [are] going to spend their capital’. Another solution which Burford Capital provides to CFOs and general counsel is a form of factoring, where a company expects to receive an award, and Burford will pay a portion of that award in advance, in return for being first in line for any payment if the award is granted.  Will also points to the value Burford can offer clients from a strategic perspective, arguing that it’s not simply about providing lump sums of capital in one go, but instead finding out what the pain points are for the legal department, and then Burford can ‘think creatively about how we can support the company.’