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Podcast: American Bar Association Radio on Litigation Finance for Law Firms 

Litigation Radio (hosted by Dave Scriven-Young) features dialogue between litigation attorneys, judges and other litigation professionals, and is sponsored by the American Bar Association’s Litigation Section. On a recent episode, Litigation Radio featured Jason Levine (Investment Manager and Legal Council at Omni Bridgeway) to discuss various aspects of litigation finance for law firms.  The podcast outlines details pertaining to commercial litigation finance benefits. Additionally, the episode discusses what type of cases are best for commercial litigation investors.  Mr. Scriven-Young and Mr. Levine also touch on trends associated with law firms engaging litigation finance. This includes how law firms can engage litigation investors to maximize a portfolio of claims as collateral.  Check out the full podcast by clicking here. 
Commercial Special Features

Key Takeaways From LFJ’s Special Digital Event on Litigation Funding Advisory Firms

LFJ's latest digital event featured Litigation Finance advisors Rebecca Berrebi (Founder and CEO, Avenue 33, LLC), Peter Petyt (Co-Founder, 4 Rivers Legal), Andrew Langhoff (Founder and Managing Director, Red Bridges Advisors), and moderator Ed Truant (Founder, Slingshot Capital). The panel discussed how they navigate between funders, law firms and claimants, as well as the challenges they face in this market, and the numerous benefits they provide each counter-party. ET: Can you comment on some of the key changes you have seen in the litigation finance market since you got started?  RB: The number one biggest change is that there is so much more money out there than there used to be. In 2016, we rarely had competition on deals. There are so many funds out there that want to allocate capital. If you have a good case, or a portfolio of cases that has merit and a good chance of winning, there would be multiple funders out there looking to fund your case. That is primarily the change I have seen over the arch of my life in litigation finance.  PP: The change that I have seen over the last couple of years is the willingness and appetite for funders to provide capital in addition to what is necessary to run the case. What I have seen is the willingness and appetite for funders to provide working capital. That’s definitely been the development over the last couple of years.  ET: What do you believe is your greatest value add for your clients?  PP: It becomes clear that a very low amount of opportunities that are presented to funders are actually funded. It is in the low single digits. And I am very confident that I will achieve much better success rates than that. And I think it's the approach that is the most important thing and value add here.  ET: Can you talk about your origination efforts and how you find opportunities? AL: I have been lucky over the last five years being a broker and intermediary, cases and opportunities have found me. What I have found is referral and repeat business is really the best part of the origination process for me. The trick is to find lawyers who are entrepreneurial, who are very open to litigation finance.  RB: I am a lawyer by background. I have a pretty strong network from my whole career working at law firms and funds. And I do try to educate the market the best way I can. Frankly, I get a lot of hits that way by being out in the market and talking in the media.  ET: When a client comes to you, what are they looking for?  PP: I think in the vast majority of cases, plaintiffs may have never used litigation finance before.  There is no doubt in my mind that law firms are the right people to go out and seek opportunities. I think we perform a valuable role here and I think plaintiffs know that. I think it is about managing processes, but adding value.  ET: What are some of the legal considerations as you take on a new client?  RB: You have to start thinking about confidentiality from the get-go. Disclosure with respect to privilege we have to be careful about. There are state-specific issues related to litigation finance that you have to be careful about, specific to disclosure.  ET: In terms of the intake, can you provide us an overview?  AL: I think it is far more effective to take all the information, organize it, mitigate any concerns and present it to the funder. Almost in a way that you are doing the funder’s work for them. Ideally, when I give them that memorandum, I know many funders will paste it into their investment committee memorandum. And that is that idea, I am trying to make it drop dead simple for them. Click here to listen to the entire episode. 
Commercial Regulatory Issues

Bloomberg Law on Legal Investment Work Product

Bloomberg Law recently profiled the professional perspectives of Ken Epstein (Investment Manager and Legal Council at Omni Bridgeway) and Megan Easley (CAC Specialty) analyzing the attorney work product doctrine’s scope related to law firm funding. According to the article, courts traditionally have considered legal investment conversations a product of attorney work product privilege. The Bloomberg Law article explains the differentiation between attorney client privilege and attorney work product doctrine, which contains similar protections of privilege.  For example, attorneys consult with potential legal investors concerning firm finances and client litigation finance concerns, while law firm professionals often consult directly with third party investors concerning case portfolio financing. Mr. Epstein and Ms. Easley argue that care is essential to protect elements of client confidentiality.  Check out complete insights on work product privilege here.   
Case Developments Commercial

Sears Holdings Seeks $35M Litigation Investment Approval 

The iconic Sears department store (which filed Chapter 11 bankruptcy protection in 2018), now known as Sears Holding Corporation, filed a motion to authorize a $35M litigation funding agreement in United States Bankruptcy Court of the Southern District of New York. Bench Walk Advisors LLC was selected by Sears Holding Corporation to coordinate funding the litigation investment agreement.  The litigation funding term sheet filed for the court’s authorization was accompanied by a preliminary statement outlining several litigation funders that were evaluated. Bench Walk Advisors’ new $35M litigation finance agreement for the court's authorization comes upon a $25M litigation budget that is nearly exhausted, according to the filing. According to the litigation funding agreement, Bench Walk has budgeted up to $200,000 in transaction fees associated with facilitating the litigation investment.   Currently under creditor protection, Sears Holding Corporation litigation is part of a claim totaling over $2B in damages.
Commercial Deals

Lawyer Monthly Explores Mediation Funding Vehicles 

Lawyer Monthly recently analyzed the pros and cons associated with litigation funding vs. mediation funding in terms of effectiveness and efficiency. Noting the growing marketplace popularity of litigation finance, Frances Sim (general counsel, Restitution Ltd.) argues that third party funding holds physiological value in financing mediation. When evaluating if a dispute can be settled via alternative means, Ms. Sim claims that third party funders can help facilitate access to justice through funding mediation costs. Lawyer Monthly explains that courts in the United Kingdom have encouraged mediation as a worthwhile approach to dispute resolution. Furthermore, successful or unsuccessful mediation can be a primer to court decisions.  According to Ms. Sim, third party funders and their clients stand to potentially benefit with imaginative organization of mediation investment agreements. While mediation does not fit every dispute resolution scenario, third party investment in mediation is a handy tool for those seeking access to justice. 
Announcements Commercial People Moves

ILFA Names New Chairman, Board of Directors, and Executive Committee

The International Legal Finance Association (ILFA) today announced its new board of directors, executive committee members, and Chairman.

“As legal finance matures, ILFA’s role as the voice of the industry is critical to communicating how litigation finance benefits society and business by supporting the rule of law across the world,” said Gary Barnett, Executive Director of ILFA. “I am thrilled to announce our new Board—led by Therium’s Neil Purslow, that will help to shape the future of this global industry.”

“I also want to thank our outgoing launch Chairman Leslie Perrin for his service and dedication to our association and the industry at-large. Under his leadership, we have successfully transitioned to a new organizational structure, one that well positions ILFA as the voice of the global legal finance industry. I further appreciate his willingness to provide, and look forward to, his continued counsel as we move forward.”

Neil Purslow, Chairman of ILFA said: “It is an honour to take over as Chairman of ILFA from Leslie who is one of the pioneers of legal finance and I am grateful for his continued commitment to shaping the future of this important industry.  I look forward to working with Gary, fellow board members and colleagues across the industry to support the continued growth and sustainable development of legal finance so that it can continue to provide much needed capital solutions and investment in the law.”

The Board of Directors is comprised of members who serve on a volunteer basis and includes senior leaders and founders of global commercial legal finance companies. The Board members include:

  • Jonathan Barnes, Chief Operating Officer at Woodsford Group Ltd.
  • Christopher Bogart, Chief Executive Officer at Burford Capital
  • Christopher DeLise, Chief Executive Officer at Delta Capital
  • Susan Dunn, Co-Founder at Harbour Litigation Funding
  • Allen Fagin, Board Member and Senior Advisor at Validity Finance
  • William P. Farrell, Jr., Managing Director and General Counsel at Longford Capital
  • David Gallagher, Senior Vice President at D.E. Shaw & Co., L.P.
  • Ian Garrard, Managing Director at Innsworth Advisors
  • David Icikson, Chief Operating Officer at Parabellum
  • Kevin McCaffrey, Chief Executive Officer at Law Finance Group
  • Hassan Murphy, Managing Partner at TRGP Investment Partners LP
  • Jack Neumark, Managing Director at Fortress Investment Group
  • Neil Purslow, Co-Founder and Chief Investment Officer at Therium
  • Andrew Saker, Chief Executive Officer and Managing Director at Omni Bridgeway
  • Marcel Wegmüller, Co-Founder and Co-Chief Executive Officer at Nivalion

The Board of Directors named the following executive committee members:

  • Chairman: Neil Purslow co-founded Therium in 2008 and is the firm’s Chief Investment Officer. A solicitor with over 22 years’ experience, he was previously Litigation Counsel in-house for Marsh & MacLennan Companies, Inc. (MMC), prior to which he was in practice in the City of London with US firm Reed Smith and Withers. Neil has led investments in litigation and arbitration valued in excess of $15 billion, including many of the largest and most high-profile funded cases in the market. He is also a founding board member of the Association of Litigation Funders, the self-regulatory body for the industry in England and Wales and is regularly invited to speak at conferences and quoted in the media on issues related to the industry. Since it was first published in 2018, Neil has been consistently recognized as a leading individual in the litigation funding industry by Chambers and Partners. He gained an MA in Jurisprudence from the University of Oxford in 1995.
  • Officers: Christopher DeLise is the Chief Executive Officer of Delta Capital. Previously, Mr. DeLise was an Equity Partner at K&L Gates LLP his practice focused on representing investment funds, financial institutions, Fortune 500 companies, and institutional and individual investors in matters ranging from fund formation and governance to compliance, and from cross-border M&A and strategic and financing transactions to all facets of starting, operating and selling technology companies. Mr. DeLise also served as Chairman of the Private Investment Funds practice group at Husch Blackwell LLP, and prior to that was an attorney in the private equity practice group of DLA Piper LLP. In 2008, he was one of only 86 attorneys in the U.S. named to the BTI M&A Transactional All-Star Team based on a survey of Fortune 1000 companies, and in 2011 he was named a 2011 Illinois Super Attorney by his legal peers.
    • Susan Dunn is co-founder of Harbour Litigation Funding and is one of the most experienced and well-known professionals in the funding sector. A pioneer of litigation funding in the UK, Susan has been sourcing and investing for over 15 years’ and during this time has provided significant input to the development of public policy. Susan was a founding member of the Association of Litigation Funders of England and Wales, and continues to play an important role with this body. Susan has previously worked as a litigator in the UK and the US where she was also a diplomat (Vice-Consul Investment), for the British Government.
    • Jack Neumark is a Managing Director, serving on the investment committee for the Credit Funds. Mr. Neumark also heads the Legal Assets Group of the Credit Funds Business at Fortress Investment Group LLC and is a member of the management committee of Fortress. Prior to joining Fortress, Mr. Neumark was a Senior Vice President at Plainfield Asset Management, a large-distressed debt hedge fund based in Greenwich, CT where he was involved in distressed debt and special situations investments.  Mr. Neumark also previously practiced law at Wachtell, Lipton, Rosen & Katz in the restructuring and finance group, and at Simpson Thatcher & Bartlett LLP in the corporate group.
    • Andrew Saker is the Chief Executive Officer and Managing Director of Omni Bridgeway and is based in the New York office. Andrew was a partner at a leading provider of corporate recovery, insolvency management and restructuring services throughout Australia and Asia for 16 years.  During this period, he managed the Indonesian and Perth operations and assisted with billion-dollar cross-border restructuring assignments throughout the world including in Indonesia, the Philippines, Singapore, China, Argentina, Kazakhstan, Europe, the US and Canada.  Mr Saker has managed hundreds of large claims across a range of industries including mining, telecommunications, energy, aquaculture, property, manufacturing, infrastructure, banking and finance.
    • Marcel Wegmüller is a co-founder and co-CEO of Nivalion. Marcel has over 10 years’ experience in international disputes funding and established and led the first Swiss litigation funder. Previously, he held various senior positions at Credit Suisse Group. He holds a master’s in law degree from the University of Zurich, is admitted to the Swiss bar and has completed executive programs at INSEAD and London Business School (LBS). He is recognized by Who’s Who Legal as a Thought Leader in Third Party Funding and by Lawdragon as an outstanding litigation funder.

ILFA also recently announced Delta Capital Partners Management LLC, a U.S.-based private equity and advisory firm specializing in litigation finance, judgment enforcement, asset recovery, and related strategies, as its newest member.

About the International Legal Finance Association

ILFA represents the global commercial legal finance community, and its mission is to engage, educate and influence legislative, regulatory and judicial landscapes as the global voice of the commercial legal finance industry. It is the only global association of commercial legal finance companies and is an independent, non-profit trade association promoting the highest standards of operation and service for the commercial legal finance sector. ILFA is incorporated in Washington, DC, and will have chapter representation around the world. For more information, visit www.ilfa.com and find us on Twitter @ILFA_Official and LinkedIn.

Commercial People Moves

Joshua Meltzer to Lead Finitive IP Finance Group

New York based Finitive is expanding its private credit marketplace, launching a new intellectual property (IP) division. Mr. Joshua Meltzer will head Finitive IP Finance Group, focusing on bringing diverse IP transactions to the Finitive platform. Before joining Finitive, Mr. Meltzer worked at Woodsford Group in London as Managing Director, where he launched United States operations for the firm. Finitive is a data and technology company with a platform that connects capital recipients with capital providers. Mr. Meltzer will lead Finitive’s IP business acquisition enterprise, aiming to lower transaction costs and unlock additional value wherever possible. Finitive says Meltzer will be tasked with syndication of client IP portfolio assets and implementation of de-risk solutions.  Click here to learn what Meltzer said about his new appointment.
Commercial Deals

Bloomberg Law on Litigation Broker Benefits

Bloomberg Law published a paper by Rebecca Berrebi of Avenue 33, LLC that explores the nature of litigation investment akin to investment banking, in that litigation brokers act as intermediaries similar to investment bankers.  According to Ms. Berrebi, as attorneys look to fund fees associated with mergers and acquisitions (at their clients’ behest), Bloomberg Law suggests finding value in engaging litigation brokers. Litigation brokers may offer unique funding opportunities and risk mitigation solutions.   Litigation brokers serve as an important intermediary between clients, attorneys and litigation investors. They can offer deep marketplace expertise and insights into the funding environment without risking unnecessary capital-market conflicts. Litigation brokers’ expertise enables them to embrace the various nuances of litigation investors, which many attorneys and claimants have no knowledge of.  Similar to the mergers and acquisitions market, attorneys normally do not float buyers and sellers. Ms. Berrebi says that litigation brokers serve similar utility as clients look for suitable litigation investors.  
Commercial Regulatory Issues

India’s Economic Times on Third Party Lending Audits 

Non-bank financial institutions and third party lenders are finding themselves in the crosshairs of regulators who are auditing institutional malpractice. According to India’s Economic Times, the ministry of corporate affairs (MCA) is expected to examine third party funders for unsavory acts, such as money laundering and violations concerning foreign exchange best practices.  The Economic Times says explains that MCA authorities plan to audit third party funders and associated intermediaries to ensure compliance with the law.  India’s Institute of Chartered Accountants (ICAI) serves as the regulatory body tasked with offering guidance to the upcoming audit of third party funders. The ICAI’s scope is broad, and interpretation of third party funders who potentially fall out of line may be considered ‘very wide.’  The interpretation is that many third party funders may have issued deals to pass funds between various intermediaries. The Economic Times notes that this action is not illegal, however, auditors will ensure that money laundering mandates are respected.  Third party funders and their foreign counterparts should expect greater scrutiny as regulators aim to preserve the rule of law.