Trending Now

All Articles

3318 Articles
Commercial Deals

Litigation Funding as a Catalyst for European Class Action Growth

The volume and scale of class actions is on the rise in jurisdictions around the world, mirroring the regularity and broad scope of proceedings that are more commonly experienced in the US. Many industry commentators see Europe as a market with huge potential, driven by the expansion of litigation funding on the continent, and the regulatory development that could act as a catalyst for growth. In an article in Strategic Risk, Henning Schaloske, partner at Clyde & Co, argues that the European Union’s ‘Directive on Representative Actions’ will set the stage for a significant rise in class action activity, as it will create a uniform structure that will enable collective actions to be taken across all member states. Schaloske argues that this directive will be the mechanism to open the door for increased class actions, but it will be litigation funders who will play a key role in realising this opportunity. Whilst Schaloske does not see the EU completely emulating the US model, he does see an opportunity for funders to drive further activity, especially in cases related to data privacy misconduct which are enabled through the EU’s General Data Protection Regulation (GDPR). He does note the counter-balancing factor of proposed regulations that would restrict third-party funding, but argues that the trend of high-profile and high-value cases would suggest that litigation funding will still play an important role.
Announcements Commercial Fundraising

NEW LITIGATION FINANCE FIRM – LEX FERENDA LITIGATION FUNDING – EXECUTES SUCCESSFUL LAUNCH; EXCEEDS EXPECTATIONS AT FIRST CLOSE

Lex Ferenda Litigation Funding LLC "LF2" is pleased to announce that it recently launched commercial funding operations after completing the first capital close for its Lex Ferenda Litigation Funding Master Fund. The Fund, which will focus its investments on US litigation and domestic commercial arbitration, welcomed several institutional investors whose commitments to LF2 exceeded initial expectations, and brought the Fund substantially closer to its USD $100 million+ target. LF2 is co-founded by Michael German, a veteran litigator and litigation funder with more than a decade of experience resolving high-value, complex commercial litigation, and Chris Baildon, a financial services expert with more than 30 years of industry experience. "We are incredibly excited to officially announce our commercial launch and look forward to being disruptive to the litigation finance industry," said Michael German, LF2's Chief Investment Officer. "We have created an investment platform at LF2 that permits us to quickly assess and make informed, data-driven decisions about the potential litigation investments we consider. The resulting transparent, client-focused investment process, which is driven by true subject-matter experts, makes LF2 a trusted partner and advisor for our clients and the law firms that represent them," said German. "In addition, our industry access and deep bench of seasoned litigators and investors make LF2 a trusted investment manager for the Fund's investor-base as well," said Chris Baildon, LF2's Chief Operating Officer. LF2 Differentiates Through Niche Focus and Veteran Team of Industry Professionals LF2 is a privately held investment management firm, with a focus on the litigation, legal, and litigation support and technology markets. As manager, LF2 is primarily focused on single-case investments in US commercial litigation and domestic commercial arbitration, with sizes ranging between USD $1 million and $10 million, although LF2 retains discretion to make all manner of investments on behalf of the Fund. LF2 brings to market one of the most flexible funding mechanisms currently available, with the ability to assess and invest in claims at any point along the dispute resolution life cycle and with flexible guidelines on law firm and client co-investment. "We created the investment program at LF2 to specifically address the lack of focus on the customer across the industry," said German. "LF2 solves for this by creating a unique and individualized funding plan for each investment as assessed from the perspective of each of the investment's underlying stakeholders. Our experience shows us that this yields the greatest outcomes for our clients," said German. Executive Team Michael German – Co-Founder and Chief Investment Officer Michael is one of the co-founders of and the Chief Investment Officer at LF2. He is primarily responsible for the firm's strategic direction, investments, and fund risk management. Michael is an experienced litigator, trial lawyer, and litigation funder with more than a decade of experience litigating, resolving, and investing in complex commercial litigation and arbitration matters. Chris Baildon – Co-Founder and Chief Operating Officer Chris is one of the co-founders and the Chief Operating Officer at LF2. He is primarily responsible for the firm's operational and compliance efforts as well as its capital raising and investor relations efforts. Chris brings three decades of global investment banking and finance experience, with substantial experience in management, business development, and capital raising across investment verticals, including litigation finance. David Stickney – Managing Director, Underwriting and Risk David is LF2's Managing Director, Underwriting and Risk. He is responsible for the firm's case underwriting, investment monitoring, and risk management programs, and supports the firm's business development efforts. David is a renowned litigator and law firm leader who recovered billions of dollars for his clients through complex commercial litigation, earning him recognition as a "Titan of the Plaintiffs' Bar" and a "Litigation Groundbreaker." Advisory Board Hon. Vanessa Gilmore (ret.) – Member of the Advisory Board Judge Gilmore is a member of the Advisory Board at LF2. She primarily advises the leadership team on new and existing investments, but is also an important strategic advisor to the firm on various legal and dispute resolution matters. Judge Gilmore recently retired from the bench after more than 25 years serving as an Article III judge in the Southern District of Texas. Scott Mozarsky – Member of the Advisory Board Scott is a member of the Advisory Board at LF2. He is an important strategic advisor to the business on legal, data and technology issues. Scott currently leads the M&A and Capital Markets Advisory Practice for a leading middle market investment bank and previously served as a corporate and legal leader to several large multinationals and publicly-traded entities. Institutionally Managed Capital Takes Long-Term View of LF2 LF2's first close was led by a leading global financial investment manager with an alternatives portfolio AUM exceeding USD $22 billion. "We are thrilled to have an exceptionally strong investor, with substantial experience in the litigation finance asset class, show such confidence in LF2. With access to significant committed capital and the substantial reach of its industry-knowledgeable investors, LF2 is able to act quickly in meeting plaintiff funding needs, which is crucial to securing quality case investments," said Baildon. LF2 is structured with the objective of meeting the highest standards in investment process management, quality control, risk management, and compliance. For further information about Lex Ferenda Litigation Funding, please visit: www.lf-2.com. For Investor Relations or other questions, please contact: Chris Baildon.
Commercial Deals

Research Suggests Litigation Funding for Patent Cases is on the Rise

Patent dispute funding has been a prominent topic in recent headlines, largely due to ongoing cases where the area of third-party funding disclosure has become a divisive issue. However, according to new research, this is unlikely to have a dampening effect on this type of litigation finance activity, and in fact, indicators suggest that it will continue to be a dominant sector. An article by Bloomberg Law highlighting the results of its recent Litigation Finance survey suggests that patent litigation remains one of the most active areas of third-party funding, with 23% of lawyers surveyed indicating they had obtained funding specifically for patent cases in 2022. This activity is reflected by the response from funders, with 68% of these companies having committed capital to patent litigation. Of particular interest for those looking ahead to 2023 is the fact that interest in exploring funding for patent law cases has risen dramatically in recent years, with 30% of lawyers expressing interest in 2022, compared to only 11% when asked two years prior. Unless a major regulatory development appears to discourage the use of third-party funding in patent litigation, it seems likely based on this data that we will see continued growth next year.
Commercial Deals

Funders Play Vital Role in Enabling International Securities Fraud Litigation

Although the US has traditionally been the primary jurisdiction for securities fraud litigation, a wave of regulatory developments and landmark cases has led to a much more active international market in recent years. In countries including the UK, Australia and the Netherlands, we are seeing numerous examples of high-value settlements being secured, and litigation funders are playing an increasing role both in providing capital and reducing risk for investors looking to take legal action. A new article by Bloomberg Law details the rise in investor-led litigation against major corporations, highlighting data from Institutional Shareholder Services (ISS) which shows an average of 60 of these lawsuits being brought each year outside of the US, since 2016. Jeff Lubitz, director of securities class actions services at ISS, states that while this trend is not experienced in every jurisdiction, there is clear evidence that in certain countries there is a combination of investors, lawyers and funders working together to actively pursue these claims. Burford Capital’s director of legal finance, Michael Sternhell, argues that the Netherlands and Australia are two particularly promising jurisdictions due to the speed of their legal system and the willingness of the courts to take an inclusive approach to international shareholder participation. Adam Erusalimsky, senior investment officer at Woodsford, also highlighted the important role litigation funders play in this area, as they provide a counterbalance to corporate power and open access to justice for shareholders.
Commercial Regulatory Issues

Burford Co-Founder Says Outside Investment is Key to Law Firm Growth

The traditional partnership model for law firms has been one of the bedrocks of the industry for so long, that suggestions of alternative ownership structures have been regularly dismissed without significant debate. However, with the advancement of law firm IPOs in the UK and the rise in adoption of the alternative business structure (ABS), some industry figures see outside investment as the best path forward. Writing in Law.com, Burford co-founder and chief investment officer, Jonathan Molot, argues that while there have been examples of IPOs and outside ownership gone awry, outside equity investment is still the best tool for law firms to innovate. He highlights the fact that the partnership model does not incentivize investment for long-term innovation and development, while outside capital can allow a firm to invest in new technology and services which will benefit firms and their clients. Molot goes on to state that by accessing outside investment, especially from legal finance companies, law firms can explore more flexible billing options for clients, which can be a powerful tool in attracting and retaining customers in such a competitive market. He also raises the currently unstable economic market as another reason why relying on traditional methods of funding can be vulnerable, whereas a third-party funder is able to provide capital and offer a stable foundation for growth and innovation.
Case Developments Commercial

Nimitz Loses Appeal Against Judge’s Funding Disclosure Order

Disclosure has been the key word in the litigation funding industry in recent weeks, as an ongoing patent infringement lawsuit brought the issue into the spotlight. However, the latest development in the case suggests that the tide may be turning against funders who seek to maintain a level of discretion over their involvement. Reporting by Reuters details the announcement today that Nimitz Technologies LLC failed in its appeal to prevent a federal judge in Delaware from mandating disclosure of its litigation funding arrangements. The U.S. Court of Appeals for the Federal Circuit ruled in favour of Judge Colm Connolly, stating that the request for disclosure was within the Court’s authority, and did hold relevance to the ongoing patent infringement case. Whilst the Federal Circuit denied Nimitz’s appeal, it did make clear that Judge Connolly’s order was not a request for the plaintiff to make the details of its funding arrangements known to the public, and they would still have the ability to request the disclosure be sealed by the judge.
Commercial Fundraising

LegalPay Seeks to Boost Legal Innovation Through New Fund

Litigation funding has been a powerful tool for widening access to justice and driving innovation in the legal sector, and technological evolution continues to provide ongoing sector optimization. Seeking to enable this kind of evolution, one major industry player is setting up a fund to boost technological development for the legal sector. Detailed in an article by Hello Entrepreneurs, LegalPay, the market-leading funder in India, has launched its Justice and Inclusion (JAI) Fund to provide startups and established LegalTech companies with $2 million in capital. The purpose of the fund is to invest in technologies and solutions to make India’s legal system more efficient, and speed up the litigation process. LegalPay’s founder and CEO, Kundan Shahi, stated that the JAI Fund aims to remedy the lack of capital for Indian startups, especially those whose solutions could be beneficial for the country’s legal structure, which has experienced relatively little innovation. In addition to Shahi, the fund’s investment committee includes Kashish Grover, COO of LegalPay and Ojasvi Babbar, CEO of the Amity Incubation Centre.
Announcements Consumer

Mill City Ventures III, Ltd. Enters into Letter of Intent to Acquire Mustang Funding, LLC

Mill City Ventures III, Ltd. ("Mill City") (NASDAQ:MCVT), a specialty short-term finance and non-bank lender, announced today that it has entered into a non-binding letter of intent for a merger transaction with Mustang Funding, LLC dba Mustang Litigation Funding ("Mustang"), a Delaware limited liability company owning and operating a Minneapolis-based litigation finance business focusing on the long-term capital needs of law firms, plaintiffs and vendors. Mustang has associated offices in Plymouth Meeting, Pennsylvania and Sarasota, Florida. The letter of intent contemplates Mill City's acquisition of Mustang through a legal structure that is to be determined in connection with reaching a definitive agreement, but with the owners of Mustang receiving a sufficient number of shares of Mill City common stock such that they would own 80% of the total number of issued and outstanding shares of Mill City common stock on a post-transaction basis. The letter of intent is non-binding and obligates the parties only to work cooperatively and in good faith for the purpose of negotiating and entering into a definitive agreement governing the transaction. The letter of intent sets forth certain conditions precedent to any closing of the transaction, and a definitive agreement, if reached, would likely set forth additional customary and negotiated conditions to any such closing. The conditions identified in the letter of intent include the completion of due diligence to the satisfaction of the both parties, a financing-based condition, the consummation of a short-term loan by Mill City to Mustang, the approval of the owners of Mustang and the shareholders of Mill City, together with any related regulatory approvals that may be required, including any required approval by Nasdaq of the continued listing of Mill City common stock after any closing. Any definitive agreement that may be reached is expected to contain other customary and negotiated terms and conditions, and may contain terms and conditions different from those contemplated in the letter of intent. About Mill City Ventures III, Ltd. Founded in 2007, Mill City Ventures III, Ltd., is a specialty short-term finance company providing short-term non-bank lending primarily to small businesses, both private and public. Additional information can be found at www.sec.gov or www.millcityventures3.com. About Mustang Litigation Funding Founded in 2018, Mustang Funding, LLC dba Mustang Litigation Funding looks for best in class capital solutions for the legal industry through funding law firms, plaintiffs, vendors and other opportunistic legal assets. More information can be found at www.mustangfunding.com
Announcements Commercial People Moves

Omni Bridgeway expands in France with new Paris operations, welcomes Leon Ioannou

Omni Bridgeway is pleased to announce the company's expansion and permanent operations in France, welcoming Leon Ioannou as Investment Manager and Senior Legal Counsel. Based in Paris, Leon will focus on supporting clients and lawyers with non-recourse financing and recovery solutions for legal disputes both in France and internationally. Leon brings extensive legal, financial, and international arbitration expertise across jurisdictions from his career in-house and with leading law firms, most recently as the general in-house legal counsel for the European operations of an international medical device company where he steered the resolution of the company's European disputes and litigation. Prior to that, Leon practiced as a lawyer resolving international disputes at White & Case LLP, Hughes Hubbard & Reed LLP, and Freshfields Bruckhaus Deringer. Leon's has advised clients in international arbitration (both common- and civil-law governed) across industry sectors including energy (nuclear, oil and gas), construction, utilities, telecommunications, pharmaceutical, banking and finance, and professional service industries. Leon has conducted proceedings under most of the world's major arbitral institutional rules as well as ad hoc proceedings under the United Nations Commission on International Trade Law (UNCITRAL) Rules.  In Paris, Leon will work closely with the full EMEA team including French trained lawyer, Nevena Ivanova, Investment Manager, Senior Legal Counsel who joined Omni Bridgeway in 2020. Prior to Omni Bridgeway, Nevena gained over a decade of experience in a French boutique law firm where she specialised in fraud, insolvency, asset recovery and international private law litigation. She has deep experience in the enforcement of EU and non-EU judgments and arbitral awards, and regarding the ex-parte authorisations and challenge of various asset attachments, including real estate. "Omni Bridgeway has been successfully funding and supporting clients with legal proceedings in France for more than 30 years, including litigation, arbitration, and judgment enforcement proceedings," notes Raymond van Hulst, Executive Director, MD and CIO for EMEA. "We are very pleased to deepen our commitment to our clients in France with Leon joining us in Paris. Leon's excellent track record is based on his deep international arbitration experience and business perspective, gained in leading law firm and corporate in-house roles across various jurisdictions. He is very well positioned to advise law firms, companies, and individuals in France and across borders regarding dispute funding, legal risk management and specialist recovery solutions." Leon Ioannou commented, "I am extremely happy to join Omni Bridgeway, the most respected legal finance provider in the industry with the most experienced team. As international disputes become more complex and require novel financing and legal solutions, we are well-equipped to help our clients manage risk, and provide both legal and financial support. This includes advising and supporting law firms and companies whether they are large established corporations, or small and emerging businesses who operate in our local market."