Trending Now

All Articles

3458 Articles
Announcements Commercial Deals

Nivalion expands in Latin America

Nivalion, Europe´s leading provider of legal finance solutions, announced today that it will acquire the portfolio and know-how of Carpentum Capital Ltd., a Swiss company that has been at the forefront of the development of litigation funding in Latin America, with lawyers on the ground in Argentina, Brazil and Chile. Marcel Wegmüller, Nivalion’s Co-CEO, said: ”Having supported Carpentum over the last years, we are pleased to be stepping into their shoes in offering funding to companies and law firms doing business in Latin America. This transaction is a logical step after having decided to proactively pursue business in the Americas. Litigation funding is growing rapidly in Latin American jurisdictions. With the assistance of the experienced team at Carpentum in these markets, as well as Nivalion’s long-standing and substantial expertise with litigation funding in different markets, we will be perfectly placed to successfully expand our business in that part of the world.” Managing Director of Carpentum, Detlef Huber, comments: ”We are pleased and proud to have helped bring litigation funding to Latin America, and we look forward to supporting Nivalion with its progress in this exciting market.” About Nivalion Nivalion is a Swiss litigation finance provider with offices in Zug, Munich, Frankfurt and Vienna. We focus on funding complex litigation and arbitration disputes in Europe, the Americas and Asia-Pacific, including direct and secondary funding of individual cases, case portfolios and law firms. Our team includes 25 professionals with substantial experience in dispute financing and private practice in leading financial institutions and law firms, offering the financial strength of its Swiss core investors. Nivalion is a member of the International Legal Finance Association (ILFA) and is committed to and compliant with the ICCA Queen Mary Task Force Best Practices, the ILFA Best Practices and the SIArb Third Party Funding Guidelines.
Commercial Regulatory Issues

Legal Funding in Jersey Matures Since Valetta Decision

Over the last decade, third-party litigation funding has been increasingly popular as a means of increasing access to justice. At its core, TPF is a way to put investor money toward meritorious legal cases (often, but not always, class actions) in exchange for a share of the award or settlement it generates. As the cost of litigation increases, the need for legal funding grows. Lexology explains that funders have adapted to the needs of clients since outdated concepts like champerty and maintenance were stricken from the law in 1967. It’s thanks to the popularity and acceptance of funding that countless potential claimants have been able to see their day in court—when they would not otherwise have been able to afford to do so. Many funded cases are so-called “David v Goliath” situations involving well-monied defendants that average individuals or small companies are trying to hold accountable. Courts have become increasingly likely to approve funding in these situations, and some even encourage it. Funders can enter into a case at any time, even after a verdict or settlement is reached. Typically though, funders tend to enter cases after the case is filed—so after the pre-action communication state. The landmark Valetta decision of 2012 affirmed that, according to Jersey courts, funding improves access to justice under specific conditions. These include:
  • Control of the case strategy and decisions be left to plaintiffs and lawyers—not funders.
  • Claimants retain a significant share of the award (staving off concern that funders see the lion’s share of the eventual payout).
  • The funding agreement contains provisions for potential adverse costs orders.
The Valetta decision has led to the widespread use of legal funding in Jersey, despite England having more permissive laws that also include DBAs and CFAs as options. Increasingly, the types of cases that can be funded is expanding to include family law cases like divorce, construction, and personal injury litigation.
Commercial

Vltava Fund Comments on Burford Capital in Investor Letter

Investment management firm Vltava Fund recently published Q3 2021 earnings. Of particular interest is Vltava’s mention of Burford Capital Ltd—a New York-based third-party legal funder with a market capitalization of about $2.4 billion. Yahoo! Finance details that Burford’s stock price has been reason to celebrate. Since the beginning of 2021, Burford has maintained a 12.31% return rate. Its 12-month returns are up by 20%. As of October 5th, Burford shares stood at $11. Vltava’s Q3 investor letter has glowing commentary for the funder. The letter explains that it’s a rare company that can call itself a pioneer and leader in a field they themselves helped to create. But this is undoubtedly true about lawyer/investment banker, and CEO of Burford, Christopher Bogart. As a leader in Litigation Finance, the team at Burford appreciates the focus on increased access to justice. But there’s also the matter of risk. Finding the sweet spot between limiting risk and pursuing high awards or settlements is an art form—one Bogart and Burford Capital have vividly brought to life. While many new entities have flooded the litigation funding space, few are capable of doing what Burford does. The strong competitive advantages Burford has are apparent in the size and breadth of its client base, the company's strong cash reserves that allow for large deployments, and its results to date. Burford’s total closed investments show an ROIC of 95%--which means that investments have roughly doubled. What’s more, Burford accomplishes this feat without the use of AI or computer algorithms. Its reliance on human experience and intelligence may be its strongest selling point. While Burford did not make Insider Monkey’s list of 30 most popular stocks among hedge funds, it did deliver a more than 7% return over the last 90 days.
Commercial

Manolete Braces for Record High Referrals, Cases

Last month, litigation funder Manolete Partners received no less than 50 case referrals. That staggering number is largely due to COVID-related insolvency claims. Law Gazette reports that Manolete has expanded its staff to better handle cases in the North East, and will continue to add staff as needed. Chief Executive Steve Cooklin explains that these positive changes come with a challenge to ensure that the company has the human resources to adequately serve the influx of insolvency cases sure to present themselves in the next few months. Creditor protections related to COVID were withdrawn in the UK as of October 1st. Meanwhile, the HMRC will impose harsh penalties on anyone fraudulently claiming pandemic stimulus monies. Analysts suggest that Manolete shares are likely to increase in value. While it is still below pre-pandemic levels, analyst Paul Hill at Vox Markets suggests that by fiscal year 2024, Manolete could see a theoretical stock price of 460p per share.
Commercial Fundraising

UINTA Investment Partners – Portfolio Update

UINTA Investment Partners has released a portfolio update for Q3-1021, which covers the period between July 1, 2021- September 30, 2021. According to the release, the preliminary estimate of net return to investors in the Uinta Income Fund LP—the Litigation Finance fund—is 2.11%. This estimate is subject to revision. Investors of record as of July 1, 2021, will receive a preferred return distribution of 2.5% for Q3. Distribution will be prorated for investors who withdrew or added funds during the quarter. About 86% of returns generated in Q3 were related to income—with the rest coming from net gains. Payoffs rose to 14.51% of portfolio value, up from 7.33% in Q2 and 2.5% in Q1. This suggests an increase in settlements. The cash flow increase has led to an accumulation of idle cash. Uinta is actively seeking opportunities to deploy that cash into worthy projects.
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.