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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.   

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.

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. 

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.

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.

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.  

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. 

Feuding Company Founders 

In the United Kingdom, company founders who find themselves grappling with argumentative co-founders have various avenues for dispute resolution. One such utility is unfair prejudice. Augusta Ventures explains that litigation should not be the first port of call for dispute resolution, however, it may be necessary for company co-founders and/or shareholders who feel treated unfairly.  According to Augusta, the United Kingdom’s Companies Act describes engagement of Section 994 as grounds for petitioning the court when unfair conduct has transpired against the best interests of the firm. Furthermore, Section 944 of the Companies Act protects shareholders and founders from business leaders who engage in behavior that is harmful or detrimental to the firm’s success.  In short, Augusta says that litigation funders appreciate founders and shareholders who are under unfair corporate prejudice  Click here to read more about Augusta’s approach to funding unfair prejudice claims.   

AmTrust Launches “Fixed Limit” After the Event Insurance Product

AmTrust Europe Limited, an insurance entity of AmTrust International, today announced the launch of a Fixed Limit ‘After the Event’ (fl.ATE) Insurance product for lower value commercial and civil legal claims.

The new product was created in response to a perception of ATE insurance – which is used by individuals, businesses and insolvency practitioners to cover their legal expenses if a claim is unsuccessful - being available only for high value disputes.

AmTrust is now making Commercial ATE insurance available for cases where the quantum and costs are more closely aligned - helping to tackle the issue caused by a lack of proportionality and supporting Access to Justice by providing an ATE Insurance solution for lower quantum claims today, whilst considering the prospective future Fixed Recoverable Costs Regime.

“When discussing a new potential matter with litigators, naturally the focus is on the prospect of success. From an underwriting perspective this is a key consideration, but the first questions will always focus on case economics. Are the costs of pursuing the case to a worst-case scenario, going to trial, proportionate to the realistic quantum?” said James Jobling, Legal Expenses Development Manager at AmTrust International.

“fl.ATE Insurance tackles this challenge through an innovative underwriting approach to proportionality and a preferential premium rating, therefore, increasing the potential for claimants to be able to obtain After the Event Insurance for lower value claims.”

The policy is available for civil and commercial disputes, and it offers fixed limit indemnity options up to £300,000. There is no requirement for a law firm or barrister to be acting on a Conditional Fee Agreement. The premium is based on two stages and is contingent upon the success of the claim.

About AmTrust

AmTrust International, the UK and International arm of New York based AmTrust Financial Services, Inc., a multinational insurance holding company headquartered in New York, offers specialty property and casualty insurance products, including workers' compensation, business owner’s (BOP), general liability and extended service and warranty coverage. For more information about AmTrust, visit www.amtrustfinancial.com.