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Commercial

Legal Funding Specialist Joins SSB Group

SSB Group, the parent company to SSB Law, is launching a new funding division. Its aim is to manage legal funding for clients and grow outreach between funders, insurers, and workers. Insider Media Limited explains that Rick Gregory has been appointed as managing director of the new division: SSB Funding. Gregory has worked with PM Law and Lexelle among others, and boasts more than 26 years in legal funding. SSB Group was founded in 2007 and currently has over 150 employees. Jeremy Brooke, co-founder of SSB Group, stated that 2021 will be a time of vital growth for SSB. Gregory is a respected industry expert who is sure to create great new opportunities for us.
Announcements Consumer

Counsel Financial Continues Business of Law Sponsorship at Mass Torts Made Perfect

Counsel Financial will continue its long-standing commitment as the headline sponsor "Business of Law" program during the Mass Torts Made Perfect™ Virtual Vegas seminar (MTMP) this week. The three-day virtual conference will offer continuing education, informative sessions on the latest litigations from leading attorneys and networking opportunities. The conference agenda is tailored to plaintiffs' attorneys focused on mass tort litigation and those looking to enter the practice area or build upon their existing case portfolio. MTMP hosts prominent speakers to share their insight on emerging litigations, adding to and diversifying caseload, lien resolution, financing and advertising. With in-person events still largely stalled, MTMP's virtual platform provides for networking between trial lawyers from across the nation, as well as with vendors and legal service providers.

Counsel Financial will present during the Business of Law track, outlining creative financial solutions available to law firms. Navigating the options in today's marketplace can be confusing—the Company will share concrete examples of actual financings to help provide clarity on what is available to contingent-fee firms. In addition, members of the Counsel Financial team will participate in two panel discussions during the seminar's Nuts & Bolts and Class Actions programs. President & CEO, Paul Cody, hosts class action leaders Greg Coleman, Esq. and Dan Bryson, Esq. of Milberg Coleman Bryson Phillips Grossman who will discuss some of the top class actions slated to make significant progress in 2021, legal issues to be aware of and the impact of COVID-19 on class action litigation.

Counsel Financial provides innovative financing solutions that are tailored to meet the unique challenges faced by plaintiffs' attorneys, including those looking to add a mass tort component to their portfolio or firms who are heavily involved in mass tort litigation. With enhanced flexibility and better terms, it can now meet any law firm need with financing options from $500,000 to $100 million+. The attorneys and professionals on staff work with each individual law firm client to ensure the financing is customized to address each specific firm's situation. About Counsel Financial Counsel Financial is the largest provider of working capital lines of credit and other funding exclusively to plaintiffs' attorneys in the litigation finance industry, having loaned almost $2.0 billion to law firms since inception. Counsel Financial sets the standard for innovation and flexibility in its loan and funding offerings, structuring terms that are conducive to the unique demands of contingency-fee practices. Leveraging 200+ years of internal legal experience, Counsel Financial has financed the growth of firms in every area of plaintiffs' litigation, including personal injury, mass torts, class action, environmental and labor and employment. The company is exclusively endorsed by multiple national and state trial organizations, including the American Association for Justice and The National Trial Lawyers.
Commercial

Third-Party Legal Funding in the Construction Industry

Litigation funding has dramatically increased its reach in the last few years. Last year, one global construction company entered into a portfolio funding arrangement that covered multiple jurisdictions—including some that were not privy to litigation funding before. As the Driver Trett Digest points out, construction disputes grow in number and scope as insolvencies rise and supply chains are interrupted. Even before COVID, multiple major contractors shuttered. Now that profit margins are thinner than ever, schedules aren’t being met, and delays and late payments abound—the construction industry seems well-suited for legal funding. Middle Eastern companies in particular are learning the value of third-party legal funding. Monetization of judgment or incomplete cases can be helpful to struggling firms who want to reduce risk while still pursuing meritorious litigation. Portfolio funding may work better for construction businesses, as it mitigates risk and enables cases which might be ineligible for funding on their own, to be pursued. Singapore and Hong Kong are among those with newly adopted laws that permit third-party funding—joining the UK, Australia, and the US in embracing the practice. UAE has made similar strides in recent years, after introducing funding-friendly laws in 2018. This has impacted insolvencies in particular. As the number of big-ticket construction disputes in the Middle East rises, the industry will no doubt find new ways to meet the needs of clients. Single case funding is unlikely to fall out of favor, even as more and more businesses make use of portfolio funding as an option for monetization of legal departments. Many different types of clients are now making use of litigation funding that wouldn’t have just a few years ago.
Commercial

Worldwide Asset Freeze May Set Precedent

A recent ruling made by the Eleventh Judicial Circuit of Florida is getting significant attention. The decision to enforce an ex-party order freezing assets represents the first worldwide asset-freeze in a US court. Burford Capital explains that in Gorsoan Ltd v Bullock 2020, the court sided with the plaintiff, targeting a $7 million condo. The ruling is good news for those hoping Florida courts will allow them to pursue foreign debtors. It also represents a change in the state’s position on freezing assets. In the US, courts follow a principle that creditors and debtors share equal rights under the law. Asset-freeze orders are seen as contrary to this and have therefore rarely been used in the US. A 1999 case, Grupo Mexicano de Desarollo SA v Alliance Bond Fund Inc 1999, saw an asset-freeze order overturned by SCOTUS. The Supreme Court held that a freeze order would interfere with the defendant’s right to use their own property, shifting the balance of power to the plaintiff. Typically, US courts follow SCOTUS’s example on this topic—until now. The impact of the ruling in Gorsoan v Bullock is significant. With regard to the ruling, the court concluded that according to public policy, it could enforce an order issued by an impartial court—even a foreign court—so long as it had appropriate jurisdiction. We can’t know yet whether other states will follow Florida’s example, but this is definitely a development worth keeping an eye on.
Consumer

Donation by Legal Funders Raises Questions

The New York State Trial Lawyers Association received a donation that has people talking. US Claims, a litigation funder based in Florida, gave $100,000 in a move some speculate is meant to influence government officials seeking to increase regulation. Legal Newsline details that legal funding is often treated with suspicion, particularly by those who haven’t used it. As of now, New York regulations on funding are minimal, though there is a bill in committee that would limit the finance charges funders could impose. Some accuse the legal funding industry of high-interest rates and fees, incomplete disclosure, and even collusion with lawyers. Meanwhile, funders maintain that the fees they charge are commensurate with the risk they take when funding cases on a non-recourse basis. US Claims is being accused of attempting to sway regulators. That charge seems dubious, based on the relatively small figure (we're not talking millions here), as well as the fact that funding isn't under severe threat in New York, so it's hard to imagine why a funder would go to such extreme measures. That said, the accusation alone against US Claims shows how vigilant the anti-funding community is.
Commercial

Miner Dispute Against Tanzanian Government to be Heard at Tribunal

Next week, the International Centre for Settlement of Investment Disputes will hear an international claim filed against the government of Tanzania. The East African explains that the suit, brought by Australian company Indiana Resources Ltd, represents the interests of shareholders who invested in Ntaka Nickel Holdings LTD and Nachingwea UK Ltd. The claim could be worth close to $100 million. Litigation Capital Management is funding the case to the tune of $4.6 million. LCM is an AIM-listed company on the London Stock Exchange. Additionally, Montero Mining & Exploration, and Winshear Gold Corporation, have separately secured legal funding in order to pursue litigation against the Tanzanian government for unlawfully seizing multiple rare earth projects.
Commercial

Business Interruption Insurance Claims—One Solution

Since the SCOTUS decision in FCA v Arch Insurance et al, Manolete has been developing new ways to approach making claims for businesses in the midst of insolvency. In many instances, it’s possible to get assistance in the form of immediate cash payments that leave room for a sizable share of recovered assets, and protection from costs. Manolete is an industry leader in financing insolvency claims, and an upcoming leader in business interruption claims. Recently, Manolete joined forces with Penningtons Manches Cooper LLP to pursue viable insurance claims. Depending on specific wording, SCOTUS has made clarifications on what insurers should cover—and includes interruptions caused by “notifiable disease” that would include COVID, and when the government or other public authority prohibits the use of the business premises. Obviously, that would mean that COVID-related business closures should be covered. It also means that partial closures should be covered as well as complete ones. Those who believe they may have an insurance claim that could impact insolvency should first review their insurance contract with a broker. If there is a claim, the next step would be contacting a litigation funder like Manolete, who can advise business owners on the best course of action.
Announcements Commercial

Global litigation funder Omni Bridgeway offers funding to Folli Follie Bondholders

To current and past holders of the CHF 150 million 3.25% 2017-2021 bonds Issued by FF Group Finance Luxembourg II SA Guaranteed by Folli Follie ISIN CH0385518052. This offer for litigation funding does not purport to be complete and is qualified in its entirety by reference to the terms of a Claims Purchase Agreement, a Claims Assignment Agreement and a Litigation Funding Agreement. This letter summarises the principal terms on which Omni Bridgeway is prepared to offer a litigation funding arrangement to holders of the CHF 150 million 3.25% 2017 2021 (ISIN CH0385518052) bonds issued by FF Group Finance Luxembourg II SA and guaranteed by Folli Follie Commercial Manufacturing and Technical S.A. (ISIN CH0385518052) (the "Bondholder(s)" and the "Folli Follie Bonds”, respectively). Alcimos Limited ("Alcimos") shall be cooperating with Omni Bridgeway in its efforts to assemble a group of claimants in relation to the proposed litigation funding arrangement. Omni Bridgeway is an established, global litigation funder which already has a litigation funding arrangement in place with a group of Bondholders holding Folli Follie Bonds with a face value in excess of CHF 23 million for the purposes of bringing an action before the Swiss courts against UBS AG (the "Defendant") on the basis of their role as bookrunners for the offering of the Folli Follie Bonds. Quinn Emanuel Urquhart & Sullivan (Schweiz) GmbH (QE) has been engaged by the group to litigate the claims based on prospectus liability. Omni Bridgeway and Alcimos are inviting current and past Bondholders who are not subscribed to the existing group action, to sign-up to the subsequent group action on or before 15 May 2021. In order for Bondholders to be eligible to participate in the group action, subject to this offer, they must have purchased the Folli Follie Bonds prior to 2 May 2018. Omni Bridgeway is committed to bearing the costs associated with the litigation of the claims, on a non-recourse basis on the terms of a Litigation Funding Agreement and will not be entitled to any payment (nor to reimbursement of its funded costs) unless the litigation strategy results in a recovery. No payments to Omni Bridgeway can ever be more than the ultimate recovery. Furthermore, Omni Bridgeway will be responsible for (court) fees and/or costs the Defendant may incur in the litigation process should the case be lost and the claimants be ordered to pay adverse costs. Interested current or past Bondholders will assign their claims to CH0385518052 - Bonds Claims Enforcement GmbH, an entity which has been set-up to facilitate the efficient management of the litigation process. As such, after subscribing to the group action, it is expected that no active involvement in the litigation will be required from the Bondholders.
Commercial

The Future of Litigation Funding: Episode 5, Part 2

Episode 5, part 2 of the Turnaround Time podcast features the rest of the panel discussion on what we can expect to see in Litigation Funding trends (our coverage of episode 1 can be found here). David Prager of Duff and Phelps moderates a panel including Tatiana Markel of BakerHostetler, Kenneth Epstein of Omni Bridgeway, and Howard Brownstein of The Brownstein Corporation. Topics include transparency and disclosure in bankruptcy cases that utilize litigation funding. Below are some key takeaways from the discussion:   DP: Howard, can you talk us through a real world example of litigation funding in a bankruptcy context? And how that led to the dynamics we see today? HB: In the Fastship case, we used bankruptcy as a tool to enable litigation. Fastship was a company that had patents advertising they could build a huge cargo vessel that would cross the Atlantic in three days. So they raised money to promote the company. The ships themselves would cost about a billion dollars for a small fleet. The money they raised got used up before they could raise financing to build ships. They came to our firm and said ‘what do we do, we’re running out of money,’ and didn’t see any hope of revenue. We did an orderly wind down of the company, to avoid personal liability for the directors. Then they discovered someone had built three ships, and they were sure they infringed on the patents. But there was no money to pursue a case. I found a law firm that liked the case. They would take it on a contingency basis, they wouldn’t put up money for experts and such—back in 2012 before litigation funding. We ended up getting a DIP loan from the party funding the litigation (debtor-in-possession financing to keep a business in bankruptcy operating)...we were out of bankruptcy in a few months. It was a totally novel use of Chapter 11. As the liquidating trustee, I filed suit in federal court, because these were Navy ships. When you sue the government, they don’t settle. The case took forever. Fast forward to 2017. We won the case. The government appealed and we won there. We’ve been paid the judgement, but are still negotiating fees for costs. Not only had there been misuse of patents, but also an alleged misappropriation of trade secrets. DP: Is there a nexus between litigation funding and bankruptcy? Why haven’t we seen much pure litigation funding in bankruptcy cases? KE: There are a number of reasons why we haven’t seen that en masse yet. The ideal situation for litigation funding on the front end of the case is one in which claims against third parties are outside relative the other assets in the case. There will be increased use of litigation funding either on the front end or the back end when the trust gets set up. It’s a matter of finding the right case, and people haven’t been very aware of (litigation funding) and how it’s used. That’s part of what I do—educating the public on what funding can do, and to consider it when there’s a financial need. DP: It seems unprecedented to take a contingency bankruptcy case. Is that an opening for litigation funding? TM: That’s not really the type of work that we do. We do use litigation funding at the debtor level. That’s something I do in the international asset recovery field. The targets of our asset recovery are often offshore, and are shell companies, and you have to dig through various levels of beneficial ownership before you get to the right people. What we do in that context is, when that issue comes up, we use involuntary bankruptcy, as we, the debtor, could be the largest creditor of one of these offshores—we’d put it into involuntary bankruptcy. That means court supervision and appointment of a liquidator, which has to be funded to prosecute the claims. DP: Everyone in the industry seems to have their own proprietary structure, how do you think about that in the ‘in court’ part of bankruptcy, where disclosure is required? How will that impact pricing and competition? HB: There’s a transparency and disclosure that’s undeniable. If funders want to play in this space, they’re going to have to get comfortable with that dynamic. We’re happy to disclose material to firms, though that will get some scrutiny from shareholders. KE: There’s a necessary transparency that comes with all of this—and I don’t think that’s a bad thing. Many funders will embrace that, but it has to be commensurate to the risk. If a loan has recourse, you really can’t charge non-recourse rates. I’m not suggesting that’s going on—but judges are reacting to risk. Pricing needs to reflect the risk.