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Commercial

Mining Industry Insights

Mining companies are especially susceptible to disputes arising from the impact of COVID. Tax issues, regulatory changes, politics, and supply chain failures can all lead to large-scale disputes. In fact, mining disputes made up the majority of investor-state arbitration cases last year. Burford Capital explains that while mining cases are complex and can span multiple jurisdictions—the potential awards can be in the billions. For those in the mining sector, the ability to maximize the earning potential of legal assets is essential. How can mining entities extract more value from these claims? Nearly half of CFOs reported forgoing unenforced judgments—some valued at $20 million or more. This is all the more impactful for the mining industry, given how vulnerable the industry is to a host of external variables, such as COVID lockdowns, supply chain issues and commodities prices, all of which led to a significant drop in net profit margin—to a low of 11% last year. One way to mitigate these risks is to create a quantitative financial model of existing legal assets, and leverage legal finance to provide funding on a predictable schedule. For most companies, this will involve a closer relationship between financial and legal departments. This relationship may take time to nurture, but will generate dividends down the road in the form of legal settlements or awards that would otherwise go unrealized. 
Announcements Commercial People Moves

Pretium Expands Senior Team with Addition of Two Managing Directors

Pretium, a specialized investment management firm with approximately $30 billion in assets, today announced that Tatiana Gutierrez and Jeannette Arazi have joined the firm as Managing Directors on its Affordable Housing and Real Estate Capital Markets teams, respectively.

These appointments underscore Pretium's continued commitment to increasing access to quality, affordable rental housing for households of all price points. The additions of Ms. Gutierrez and Ms. Arazi enhance the depth of expertise, insight, and support Pretium provides for residents, investors, and community stakeholders across its platform. These appointments follow the announcement of the firm's $1 billion build-to-rent investment in partnership with Crescent Communities.

"Welcoming two talented professionals with long track records of success and innovation is an exciting milestone as we grow our team," said Don Mullen, CEO and Founder of Pretium. "Tatiana and Jeannette have made an incredible impact in their respective focus areas, and the experience they bring to Pretium will play a pivotal role as we continue to grow our real estate investment platform, building on the success of our single-family and build-to-rent strategies. We are confident that their additions will further strengthen our leading efforts to set the standard for professional single-family rental ownership. We look forward to their contributions as we continue to invest in our communities and expand our capabilities to bring the benefits of professionally managed single-family rental housing to more American households."

Based in New York, Ms. Gutierrez will be integral to advancing Pretium's social impact goals, including instituting an array of supportive services for residents of all price points and adding to and preserving low-income rental housing stock. Over the course of her nearly 20-year career, Ms. Gutierrez has built a reputation as a leading practitioner focused on the development and preservation of affordable housing across the United States. As a real estate attorney at Nixon Peabody LLP for more than 15 years – including the past eight years as a partner – she represented a wide range of leading for profit and nonprofit developers, syndicators, asset managers, housing authorities and tenant organizations on affordable housing transactions and regulatory issues across the United States. Ms. Gutierrez also has extensive experience in HUD assisted housing programs and has advised on numerous affordable housing and social impact real estate transactions. Ms. Gutierrez currently serves on the board of Women in Housing and Finance, on the Advisory Board to the Real Estate Association for LatinX Professionals, and on the Advisory Council to the National Housing Conference.

"Affordability and social impact continue to play an increasingly important role in today's housing market, particularly in the wake of the pandemic and the important social issues that have been brought to the forefront, as a result," said Ms. Gutierrez. "With almost 20 years of industry experience and recent experience working with the Pretium team, it is clear they are at the forefront of providing quality, affordable housing in neighborhoods of opportunity with a housing product that serves vulnerable populations like large families with children. Having the opportunity to bring my distinct affordable housing experience to Pretium's world class residential real estate platform, I believe I can help bring the benefits of Pretium's professional ownership and management model to those who will benefit from it the most."

Based in Chicago, Ms. Arazi joins Pretium from Sidley Austin LLP, where she worked for the past 22 years, including the last 14 as a partner. Widely known as a leading capital markets advisor and one of the earliest advisors for financing single-family rental housing, Ms. Arazi has extensive experience representing financial institutions in a wide range of transaction types and creating financing solutions tailored to the nuances of unique asset types. She will focus on structuring and executing transactions and strategic financial initiatives firm-wide across Pretium's residential real estate platform and portfolios.

"Having worked closely with Pretium and a number of its team members for almost a decade, I have long admired the firm's vision and commitment to creating a unique residential platform that encompasses both real estate and finance," said Ms. Arazi. "It is a privilege to join the team that serves the evolving needs of today's rental market participants—from renters to communities to investors—and I am excited to contribute to their incredible momentum."

About Pretium

Pretium is a specialized alternative investment management firm focused on U.S. residential real estate, residential credit, and corporate credit. Pretium was founded in 2012 to capitalize on secular investment and lending opportunities arising as a result of structural changes, disruptions, and inefficiencies within the economy. Pretium has built an integrated analytical and operational ecosystem within the U.S. housing, residential credit, and corporate credit markets, and believes that its insight and experience within these markets create a strategic advantage over other investment managers. Pretium's platform has approximately $30 billion of assets under management as of October 1, 2021 and employs approximately 2,500 people across 29 offices. Please visit www.pretium.com for additional information.

Commercial

Judge Shira Scheindlin Speaks About Litigation Finance

On the topic of third-party legal funding, trial judges past and present have much to say. Hearing them out can tell us a lot about how the industry is perceived by the courts and how that may impact its future. A recent interview with Judge Shira Scheindlin includes three questions that shed light on how courts view the practice of litigation funding.

Above the Law presents the interview with a legendary SDNY judge, with additional commentary by Gaston Kroub. The first question involves the recent Litigation Finance Dealmakers Forum.

When asked why she wanted to participate, Scheindlin's answer was twofold. First, giving a keynote address always leads to increased knowledge and perspective. Second, she was drawn to the conference for the enthusiastic interest in the practice of TPLF and its impact on social justice.

With specific regard to IP litigation, funding can be crucial because there’s so often a large financial disparity between IP owners and defendants. It’s been suggested that third-party funding can make IP cases more difficult to settle. This may make sense in that funded parties cannot easily be pushed into a settlement as their funds run low.

Scheindlin disagrees with this sentiment, however. She refers to her own experiences when she says that she’s seen many plaintiffs with unrealistic expectations for the value of their case and its potential award. Because funders (especially during the vetting process) offer an unbiased opinion—they can lend clarity to the case and help set reasonable goals.

Funders and legal experts alike are torn on the subject of disclosure of funding agreements. Scheindlin states unequivocally that disclosure is not important in the majority of cases. A funder’s involvement in a case suggests that the case itself has merit—this could serve to affirm the merits of the case as opposed to a frivolous or punitive action.

Consumer

SCOTUS Declines to Hear CFPB Challenge

In 2017, RD Legal Funding was sued by the New York attorney general. It was accused of deceptive business practices with regard to 9/11 victim advance compensation, as well as NFL concussion settlements. Reuters explains that RD Legal Funding challenged the Consumer Financial Protection Bureau’s standing to bring the case. This has been a source of debate in several other cases, with one court eventually ruling that the protections given to a CFPB director were unconstitutional. Now that SCOTUS has declined to hear this challenge, similar cases will return to lower courts.
Case Developments Commercial

Class Action Against British Telecommunications Gains Court Approval

The Competition Appeals Tribunal has granted permission for a class action against British Telecommunications to move forward. The action could be worth as much as GBP 600 million, and asserts rampant overcharging of landline customers. The action is being funded by third-party funder Harbour Litigation Funding. Harbour Litigation Funding explains that Justin Le Patourel, founder of a group called Collective Action on Land Lines (CALL), has launched the case, which could represent as many as 2.3 million customers. Noted law firm Mishcon de Reya will be advising on the case. Many of these customers are land-line only or purchased phone plans and broadband services without bundling them into a single package. Claimants could be entitled to as much as GBP 500 each. This is significant, as many impacted claimants are on fixed incomes. Harbour CIO Ellora MacPherson stated that the case may serve as a reminder of the importance of litigation funding in the pursuit of justice—especially for those, like these BT customers, who could not otherwise afford to see their day in court. Claimants not wishing to participate may opt out.
Announcements Commercial Deals

Fortress Announces Integration of Vannin Capital into Fortress Legal Assets Business

Fortress Investment Group LLC (“Fortress”) today announced that following the acquisition of Vannin Capital by funds managed by Fortress in 2019, the operations of Vannin Capital are now being restructured into the Fortress Legal Assets business.
As part of the restructuring, a number of Vannin Capital employees will transfer to Fortress. This change will have no impact on Vannin Capital’s existing investments, and Vannin Capital will remain the counterparty to its various litigation funding agreements. The restructuring is taking effect immediately. “We are confident that this combination will further strengthen our leadership position in the litigation finance market, broadening our sourcing capabilities and bringing counterparties the benefits of a deeply experienced, fully-integrated, global Legal Assets team,” said Jack Neumark, Managing Director and head of the Fortress Legal Assets business. “We believe this represents a logical next step for our Legal Assets business and managed funds as a whole, which will now receive the full benefit of the expertise and relationships that the Vannin Capital employees have built over the last decade.”
About Fortress
Founded in 1998, Fortress manages $53.9 billion of assets under management as of June 30, 2021, on behalf of approximately 1,800 institutional clients and private investors worldwide across a range of credit and real estate, private equity and permanent capital investment strategies.
Announcements Commercial People Moves

Omni Bridgeway expands its team of US-based investment professionals

Omni Bridgeway (formerly known in the US as Bentham IMF) is pleased to announce a significant expansion of its US investment team to accommodate its growth in the world’s hottest legal finance market. In addition to adding four brand new investment professionals, we are thrilled to announce the promotion of four team members who have been key players on our US team. In New York, former Kirkland & Ellis LLP partner Ian Spain has joined Omni Bridgeway as an Investment Manager and Legal Counsel, bringing with him over a decade of complex litigation experience. Chris Citro, also formerly of Kirkland, has joined the team as a Legal Counsel with specialized experience in patent litigation (including ITC matters) and other intellectual property disputes. In Los Angeles, former Pillsbury Winthrop Shaw Pitman Counsel Justin Brossier comes aboard as an Associate Investment Manager and Legal Counsel, where his diverse prior litigation experience will enable him to identify strong investment opportunities as well as provide sound strategic advice to Omni Bridgeway’s internal Investment Committee and to external stakeholders alike. And in Houston, Raj Duvvuri joins as an Investment Manager and Legal Counsel. A graduate of Harvard Law School with deep ties in the Houston market, Raj began his career at top-tier law firms such as Baker Botts. Most recently, Raj served as the General Counsel for Atlas Operating LLC and Affiliates, a privately held energy and real estate conglomerate known for operation of oil and gas assets and commercial properties in U.S. and Canada. His unique combination of law firm and in-house skills and expertise will be key as the company’s corporate and law firm portfolio financing opportunities continue to grow in size and number. “Omni Bridgeway is the gold standard in this industry, and I am honored and excited to join the organization,” observed Justin. Similarly, Raj remarked that "Omni Bridgeway has an unmatched reputation in the funding space and is at an exciting moment in its development. I'm thrilled to be joining the team." In addition, Omni Bridgeway is delighted to announce the promotion of the following investment professionals, all of whom have displayed excellent judgment and counsel on potential opportunities and funded investments. They have expertly navigated several funded matters through their life cycle and have assisted Omni Bridgeway with its growth and expansion into new legal finance areas, from private equity to insolvency and international arbitration. Advancing to Investment Manager and Legal Counsel are Amy Geise in Houston and John Harabedian in Los Angeles. Both Sarah Jacobson in New York and Nilufar Hossain in San Francisco are being promoted to Associate Investment Manager and Legal Counsel. “All of these team members have proven themselves to be great assets. Moving them up the ranks is not only recognition of all their hard work and dedication to maintaining Omni Bridgeway as the go-to funder in the US, it also demonstrates our commitment to promote well-deserving folks from within,” says US Chief Investment Officer Allison Chock. On the recent hires and promotions, Andrew Saker, Omni Bridgeway’s Managing Director & CEO and Chief Strategy Officer, notes that “the expansion of the US investment group is a direct result of the demand we are seeing in the market for legal finance products and also displays our advancement of, and execution on, our US growth strategy to remain a top dispute finance funder regionally, as well as globally. Keep an eye on this space; we’re just getting started.”
ABOUT OMNI BRIDGEWAY
Omni Bridgeway is a global leader in financing and managing legal risks, with expertise in civil and common law legal and recovery systems, and with operations around the world. Omni Bridgeway offers dispute finance from case inception through to post-judgment enforcement and recovery. Since 1986, it has established a record of financing disputes and enforcement proceedings.
Commercial

Litigation Funding Experiences Maturity and Growth

As more investors discover the benefits of Litigation Finance, funders have had to become more proactive about funding cases. Collective action cases are particularly attractive to funders due to large class sizes and the potential for high payouts. As the industry becomes larger and more influential, innovations abound. Law Gazette details that competition between funders is becoming more pronounced—as courts must now parse disagreements between separate claimant groups for the same matter. Meanwhile, a push for standardized funding agreements and other types of standard documentation is underway. This advancement is expected to help new investors to understand how litigation funding works to better inform their investment strategies. COVID-19 has spurred the industry forward in several key ways. Perhaps most impactful is the embrace of high-end investors who are increasingly seeking non-correlated investment opportunities. That, combined with the promise of impressively high returns, has investors flocking toward the industry. This past summer, Augusta Ventures’ new GBP 250 million fund brought its total assets under management to a staggering GBP 585 million. Once the funds are in hand, funders have an obligation to make that money work for investors. As funders seek to proactively find new cases to bankroll, collective actions are frequently on their radar. Neil Purslow of Therium Capital Management explains that funding is more common than ever in large group actions—leading to a symbiotic relationship between funders and cases. The Consumer Rights Act of 2015 has also impacted third-party litigation funding. The opt-out provision of the law means that a case with a huge class size—even in the millions—can be represented by a single person. However, in the case of multiple claimant groups, legal teams, or funders—only one group will be certified to represent the entire claimant class. There is a Competition Appeal Tribunal that makes these decisions. Largely though, litigation funding is self-regulated.
Commercial Deals

Virage Capital Management Inks Deal for Insurance Lawsuit Revenue

Miami company MSP Recovery, along with its new partner—Lionheart Acquisition Corp II—announced a deal with Virage Capital Management for a 50% share of all future awards against property and casualty insurers.   Claims Journal reports that software used by MSP assessed that as much as $50 billion in Medicare claims should legally have been paid by insurers. That number could expand to as much as $263 billion. CEO of MSP, John Ruiz, explains that while the company expects revenue from their efforts to recoup these payments, no revenue is projected to accrue until after 2022. MSP’s business software is the cornerstone of its business plan. It examines Medicare payouts to determine if they should have been paid by another payer—usually a private insurer. Because of the Medicare Secondary Payer Act, private claimants are eligible for double damages from insurers that failed to reimburse Medicare. On average, MSP collects just over two times the value of the bills paid by Medicare—because insurers who fail to pay endure interest payments as well as double damages. In addition, insurers will have to pay the market rate for care instead of the typical discounted rate for Medicare patients. So far, Ruiz’s plan appears to be working. A recent whistleblower lawsuit filed in a Michigan court is seeking billions from more than 300 auto insurers who allegedly filed false reports to Medicare. Ruiz expressed disdain for insurers who would turn a blind eye to their obligations.