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Commercial

Australian High Court Rules on Competing Class Actions

Australia’s High Court determined by a slim 3-2 majority that first-come-first-serve will not apply to overlapping or competing class actions. Some have suggested that there should be a presumption that the first case filed should proceed, and later cases stayed. The High Court disagreed, and instead suggested numerous factors that should be considered. Lexology details the list of considerations courts weighed in a recent determination on class actions against AMP. These included:
  • the scope and nature of the cause of action
  • working theory of the case
  • class size
  • availability of legal funding and other resources
  • progress made
  • experience of the legal team
  • estimated net return to claimants
Third-party funding played an important part in the judge’s decision. The funding agreement largely determines any hypothetical payout to class members based on percentages spelled out in the funding agreement. The High Court asserted that a first-in-line presumption could lead t a mad rush to file cases as quickly as possible. This could negatively impact class members and clog court dockets. Moving forward, it appears that litigation funding agreements will play a big role in determining case order when there are overlapping or competing class actions. If courts continue to weigh proposed payouts to claimants, the exact terms of third-party funding agreements will be subjected to even greater scrutiny by courts. This in turn may lead to more competitive agreements and greater competition between funders. Still, this High Court ruling doesn’t necessarily set a national binding precedent. Many are calling for greater uniformity in how cases are prioritized across the country. The Federal Government is likely to step up as they continue their efforts to regulate third-party legal funding.
Announcements Commercial

Mill City Ventures reports record year for revenues and earnings

Mill City Ventures III, Ltd. ("Mill City" or the "Company") (OTCQB: MCVT), a non-bank lender and specialty finance company, announced today its revenue and net income for the year ended December 31, 2020 was a record from 13 years in business.
  • Revenues increased 700% to $1.3M from $161,000 for the prior year
  • Earnings from operations was $561,000, an increase from a loss of $672,000 for the prior year
  • Net asset increase from operations before taxes was $2.5M, compared to a net loss from operations before taxes of ($657,000)
  • Shareholder equity increased 16% to $11.6M from $10.1M, after giving effect to a December 2020 dividend payment of $539,000
Mill City's net margins from operations were 43% for its first full year after a complete shift in business operations. Net asset value per share increased to $1.08 from $0.91. Chief Executive Officer Douglas M. Polinsky stated, "We undertook to transform our business in 2020. In so doing, we have tried to remain nimble so as to take advantage of opportunities as they arise.  This has proven critical to our success since potential borrowers often come to us in situations not bankable due to time constraints or other issues.  We take the time to understand the situation and confer with our board and receive input from advisors on how to analyze the opportunity." "We have enjoyed lending opportunities in title loans, adjudicated insurance settlements, real estate bridge loans, and collateralized personal loans to high-net-worth borrowers. In addition, we continue to leverage our experience in the public market to participate in the SPAC market and explore opportunities in litigation finance. We will continue to make our decisions after sufficient due diligence and incorporating appropriate risk-mitigation processes, structures and terms," Mr. Polinsky continues. The investment portfolio has continued to add to the growth in assets into the first quarter of 2021. Mill City also repurchased 381,489 shares during the year. Mill City's forward-looking statements in this release are made pursuant to the "safe harbor'' provisions of the Private Securities Litigation Reform Act of 1995.  These forward-looking statements are subject to risks, uncertainties and other factors that could cause actual results to differ materially from the future results expressed or implied by the forward-looking statements, including without limitation continued demand for short-term specialty non-bank loans, increased levels of competition, new products or offerings introduced by competitors, changes in the general economy, changes in interest rates or the market for loans, and other risks. About Mill City Ventures III, Ltd.
Founded in 2007, Mill City Ventures III, Ltd., is a short-term non-bank lending and specialty finance company. Additional information can be found at www.sec.gov.
Commercial

Big IP Settlements Can Happen, Even for Nonpracticing Patent Holders

Billion-dollar verdicts in IP cases don’t happen every day. Even when they do, they typically don’t hold up on appeal. Yet these sizable verdicts turn heads in the media and bring attention to the value of patents. This attention is a welcome change for some who claim that the media has an anti-patent bias. Above the Law explains that a billion-plus verdict from February has commanded media notice. The verdict in Caltech v Apple/Broadcom was covered by big outlets like WaPo and Bloomberg. Investors in Litigation Finance often choose IP-related investments because of the potential for a sizable award.  What other impacts do these large IP verdicts have? They may encourage patent holders to take their case to trial rather than accepting a lowball settlement. The jurisdiction responsible for the verdict—Western District of Texas—will no doubt have patent holders flocking toward it as defendants attempt to flock away. The fanfare here isn’t just about the size of the verdict, but the fact that it went to a non-practicing entity. Juries may presume the value of the patent because money was spent to purchase it—particularly if the purchaser is another large tech company. Some are asking if most juries will be inclined to presume a patent has a high value because patent holders are willing to go to trial to protect it. Seeing funders like Fortress reap the benefits of mega-verdicts can inspire increased investments and new investors. The demand for legal funding will likely also increase, as plaintiffs come to appreciate the impact funding can have on pursuing an action effectively. Getting adequate funding for a case can mean the difference between accepting a low settlement and having the means to go to trial.
Announcements Commercial

Kerberos Capital Management Named Top 3 Global Newcomer of the Year by Private Debt Investor

Kerberos Capital Management was selected as the #3 Global Newcomer of the Year for 2020 among private debt funds on a worldwide basis by Private Debt Investor, a global independent publication based in London covering the private debt and private equity industries. The Private Debt Investor Awards acknowledge leaders across an array of categories and are the culmination of a broad-based voting process among industry participants, including the private debt, private equity and institutional limited partner communities. Kerberos Capital Management is a private credit asset management firm specializing in direct lending to law firms and opportunistic private credit. Since 2018, Kerberos has provided bespoke solutions to borrowers and law firms throughout the United States and originated over $300 million in direct lending transactions. Kerberos’ investors include some of the world’s most respected pension funds, multi-family offices, and asset managers. Kerberos’ investment team is comprised of senior members from both the legal and private credit industries, including former principals of the world’s leading law firms and multi-billion dollar private credit funds. The firm is headquartered in Chicago.
Commercial

Flat 2020 Performance for Law Firm Belies New Strategy

In a sign of how law firms might be growing more cost-conscious, Trans-Atlantic legal firm Bryan Cave Leighton Paisner cut its workforce by 4% globally as part of its newly adopted strategic plan. This included closing one office in Beijing, and intensifying focus on specific areas of practice. Law.com reports that financial performance was basically flat throughout 2020—which is not as bad as it sounds given the economic impact of COVID. Gross revenue decreased about 1% to just over $860 million. Profits per partner went up by about .5% to $837,000. The firm is poised to flourish in the near future, thanks to Project Advance. This new strategic plan was developed in concert with McKinsey & Co. It focuses on three ‘growth engines:’ litigation and investigations, real estate as an asset class, and mid-market corporate and finance. Other aspects of Project Advance include reducing personnel company-wide by 118, which included staff members and attorneys. Though the Beijing office was shuttered, offices in Hong Kong and Singapore remain active. The firm currently employs 1,370 lawyers across eight countries. Early in 2020, a Paris team with 21 layers was added. To ensure focus on the main objectives of Project Advance, the firm named Sean Odendahl as Chief Transformation Officer in October of last year. It’s anticipated that staff will return to offices after June 30 of this year, depending on COVID-related factors. Some virtual work is expected, as well as open-space office plans and other steps to reduce the firm’s footprint. Determinations are currently being made as to when it makes sense to bring people together for in-person meetings, as opposed to remote meetings.
Commercial

Omni Bridgeway Expands Arbitration in German-Speaking Regions

Dr. Martin Metz LLM has recently joined the team at Omni Bridgeway as Senior Legal Counsel and Investment Manager. Formerly of DLA Piper, Metz will now be based in the Cologne office. Omni Bridgeway announced that Metz joins two new hires in German-speaking regions, expanding the company’s reach, knowledge base, and capacity for cultural awareness. Dr. Arndt Eversberg, Omni Bridgeway Germany’s Managing Director, explains that request for funding has skyrocketed in Germany of late. The specialized experience of Dr. Metz promises to strengthen the practice overall.
Commercial

Frank DeCosta Interview: Litigation Leader in International IP

Patent litigation cases have soared dramatically since the beginning of the pandemic. Frank DeCosta of Finnegan, Henderson, Farabow, Garrett & Dunner, knows that companies are leveraging IP assets with strategic litigation—which is more valuable now than ever before. Bloomberg Law recently spoke with DeCosta about how third-party litigation funding drives IP litigation, hiring a niche attorney, and more. DeCosta begins by explaining that while remote hearings and depositions have been common since COVID, jury trials are still at a dead stop. DeCosta explains that his firm was already set up for remote meetings before COVID hit, which gave them an edge while others were left updating their tech. Remote meetings also allow for more staff involvement and education because travel expenses are no longer required to bring low-level staffers into a meeting. When asked what causes the COVID-related spike in IP litigation, DeCosta explained that patent litigation is cyclical. Typically, trying economic times lead to an increase in patent filings and IP cases. Reasons to initiate IP cases vary, and might include generating revenue, leveraging assets, or justifying a previous investment in a patent. Some credit the availability of litigation funding in fueling new IP suits. Indeed, some prominent funders report a nearly untenable downpour of requests for funding. Attracting new clients is an important aspect of any legal firm. DeCosta explains that the best way to find and keep clients is to serve as a reliable, trustworthy advisor. Anticipating issues before they arise, understanding goals and caveats, and truly knowing a company and staff are all crucial—and more difficult than ever because interactions must now be scheduled and handled remotely. On the subject of diversity, DeCosta recommends seeking talent from STEM-related undergrad or graduate programs. Like many firms, Finnegan’s mission is to be intentional and fervent in seeking out a diverse and talented team.
Commercial

Indiana Resources Ups the Anti in Tanzanian Government Action

Indiana Resources is still pursuing its case against the government of Tanzania. The case deals with the alleged expropriation of the southern African Ntaka nickel project. Indiana’s claim now exceeds $95 million, with the first hearing scheduled for next month. Business News explains that the International Center for the Settlement of Investment Disputes (ICSID), a part of the World Bank, has formed an Arbitral Panel that will hear the first procedural hearing on April 22. Panel members include representatives from Singapore, the US, Botswana, and Tanzania. Chairman of Indiana Resources, Bronwyn Barnes, stated that the company is glad to hear that the panel has been formed and that Indiana is well prepared to move forward with the claim. She goes on to explain that the case is being funded with non-recourse litigation funding, so shareholders will not have to bear the cost of pursuing the case. The case itself revolves around the Tanzanian government changing mining laws in 2018. Despite assurances to the contrary, Ntaka Hill was expropriated in 2019, leading to IR requesting arbitration the following year. Indiana asserts that the Tanzanian government was obligated to compensate companies for any investments that were nationalized or expropriated. The value of the mining project is about $212 million, though recent rises in metals pricing suggest that estimates may be on the low side. Nickel, copper, and cobalt have all risen in value in recent years. Litigation Capital Management, a London-based legal funder, is footing the bill for the arbitration costs with a cap of nearly $5 million. Indiana Resources is being represented by LALIVE, a Europe-based specialist international arbitrator.
Commercial

PGMBM Raises Over GBP 100 Million to Fund Litigation

International firm PGMBM has formed a partnership with alternative investment firm North Wall Capital. This brings PGMBM’s total capital raised to more than GBP 100 million. Law Gazette asserts that the money raised will be used to fund alternative dispute resolution, antitrust litigation, and class-action suits. This is good news for PGMBM, whose class action was thrown out by the High Court last year. The court called the action an ‘abuse of process.’ PGMBM Chairman Harris Pogus stated that the firm's goal is to keep fighting for those who were wronged by large corporations. The firm continues to grow and attract top talent from around the world.