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Commercial

Avenue 33 LLC Founder Rebecca Berrebi on Litigation Funding Consulting

Some would say that the quickest way to be successful in business is to identify a need in the market—then find a way to fill that need. One person who took that advice to heart is Rebecca Berrebi, founder of a litigation funding consultancy firm that just opened. Above the Law details that Berrebi’s company, Avenue 33 LLC, provides expertise on legal finance to firms, investors, litigants, and others. The company advises on how to get maximum value in any litigation funding situation including case management, monetization, deal structuring, and enforcement. Berrebi uses her years of experience in the business and legal world to provide valuable guidance to her clients. When asked about her high level of optimism for the Litigation Finance industry, Berrebi had a lot to say. Her experience in Big Law and with litigation funding has given her a unique perspective on the issues facing funders today. The three stakeholders in any funding situation, the firm, the litigant, and the investors, may all have different motives, but must pool resources and expertise to reach a common goal.   Sadly, not all of Berrebi’s experiences with litigation funding were positive—some were learning experiences. When parties come into a case without a full understanding of all that litigation funding can do, the results can be contentious, involving wasted time and resources. With that in mind, Berrebi’s optimism comes from a place of knowledge and experience, having successfully navigated choppy legal waters in the past. Avenue 33 is exactly the sort of service potential litigants should look into when considering the use of litigation funding. A neutral party that can offer advice without having a stake in the proceedings is likely to benefit anyone needing to make an informed decision.
Commercial

Funding Insolvency Claims in Australia

Australia’s Litigation Finance community is in a state of flux, as new regulations are implemented, and industry players scramble to remain in compliance. Understanding litigation funding for companies in liquidation is essential in order to reap maximum benefits. Mondaq explains that if adequate funds for liquidation are not available, liquidators are in no way obligated to litigate. While it makes sense that liquidators will make every effort to widen the asset pool to distribute to creditors, inadequate funds can make that impossible. That’s where Litigation Finance can come into play. In Australia, third-party funding for liquidations has been available since 1996. The practice is also mentioned in the Corporations Act of 2001, where it affirms that funders may enhance available funds for distribution to afford unsecured creditors a larger payout. It costs money to bring proceedings against company directors and others, yet not doing so only works to the detriment of creditors. With that in mind, it makes sense for liquidators to make use of third-party funding. Of course, Litigation Finance in insolvency cases is complex and brings with it some caveats. Courts have expressed concerns over funding arrangements, potential conflicts of interest, and even the idea that funding will bring about more lawsuits—some of which might have insufficient merits. This concern eventually brought about a mandate that agreements between funders and liquidators will require approval from the court. When courts vet funding agreements, they first look at control. Ideally, liquidators will retain total control and will be the ones who provide updates and instructions to the lawyers involved. Meanwhile, funders have little if any control—though they do retain the right to end their funding agreement at any time. This is part of the nature of non-recourse funding. Currently, Litigation Finance is a positive force in the world of insolvency.
Commercial

Burford CEO Chris Bogart Discusses Launch of International Legal Finance Association

The launch of the International Legal Finance Association (ILFA) is a first-of-its-kind event. Burford Capital is the force behind this global organization, fueled by the exciting industry growth that has taken place in recent years. What can we expect from this newly formed entity? Burford Capital details that the mission of the ILFA is twofold. First, it will focus on ensuring that industry concerns are heard by the powers that be. Courts, lawmakers, and clients will all benefit from hearing directly from industry professionals. Next, the ILFA will be an ever-growing resource of information about the industry. This aspect promises to be of particular use for corporate and private clients who may not yet understand the finer points of financing litigation. Some might ask why a global entity is necessary, when Litigation Finance is a robust and growing industry. Advocacy for the industry is of paramount importance, especially as it develops and adapts to changing circumstances. Chris Bogart explains that launching the ILFA is an expected step in the evolution of the industry—one that inches Litigation Finance ever closer to a financial service provider, rather than a niche business. Bogart feels strongly that the launch of the ILFA won’t change views on the industry itself. However, it does seem to predict further growth. Trade associations are common in many fields, and they don’t tend to alter public perception much. But such groups can have an impact by advocating for members—which is the primary focus of the ILFA.
Commercial

Litigation Funders Form Global Trade Organization

Editor's note: An earlier version of this article omitted Longford Capital as a founding member of the ILFA. That omission has been resolved. We regret the error.  At least six of the world’s most successful litigation finance entities are forming a global coalition called the International Legal Finance Association, or ILFA. Founding members include Burford Capital, Longford Capital, Omni Bridgeway, Therium Capital Management, Harbour Litigation Funding, and Woodsford Litigation Funding. Also joining the association are Parabellum Capital, DE Shaw & Co, Nivalon AG, Fortress Investment Group, and Validity Finance. Bloomberg Law reports that the six founding firms have, in total, deployed over $5 billion into investments. Investors are still flocking to the industry, largely because legal finance is not tied to the rest of the investor marketplace. Defending against excessive regulation is critical, because whether it’s effective or not—once enacted, new regulations often catch on elsewhere in the world. Because the founding funders of the ILFA operate all over the world, they have to be aware of laws and regulations across the globe. 
Announcements Commercial

Delta Capital Management Appoints Robert Brown, CEO of the Americas of Lincoln International, to its Board of Advisors

Delta Capital Partners Management LLC, a global private equity firm specializing in litigation and legal finance, has announced a new appointment to its Board of Advisors, Robert Brown, CEO of the Americas at Lincoln International. Rob has nearly 30 years of experience advising leading private equity groups, privately owned businesses and large public companies on divestitures, acquisitions and other strategic initiatives. Rob helped start Lincoln's industrials and consumer practices and led the firm's business services practice for more than a decade. Rob is a frequent guest on WBBM's Noon Business Hour in Chicago and a speaker and author on mergers and acquisitions-related topics. Rob sits on the board of UNICEF USA and the Dean's Business Council for the Gies School of Business at the University of Illinois. He is also President of the Board of Regents at Saint Ignatius College Prep in Chicago. Delta's Chief Executive Officer, Christopher DeLise, commented that "Rob is a recognized expert in private equity and complex financing transactions, as well as one of the architects and senior executives that have built Lincoln into one of the world's most respected and successful investment banks. The ability to draw on his wisdom, experience and leadership will enable Delta to continue to build its firm into one of the most successful companies in the litigation finance industry." Rob joins an Advisory Board comprised of Ian Casewell – London Office Managing Partner of the Mintz Group.  Nitin Chadda – Co-Founder and Managing Partner of WestExec Advisors, former Senior Advisor to the U.S. Secretary of Defense, and former Director at the White House National Security Council.  David Hellier – Partner and Chair of the Capital Markets Group at Bertram Capital, member of the Board of Directors of the Association for Corporate Growth.  Brian Maddox – Senior Managing Director at FTI Strategic Communications.  Bill Moran – Retired Four-Star Admiral who served as the Vice Chief of Operations and Chief of Personnel for the United States Navy.  Ileana Ros-Lehtinen – former Chairperson of the U.S. House Foreign Affairs Committee, and member of United States Congress for nearly 30 years.  Dennis Ross – former special assistant to the United States President and former Director at the White House National Security Council and Geoffrey Verhoff – Senior Advisor at Akin Gump, and former Vice Chairman of the Republican National Committee's Finance Committee. About Delta
Delta Capital Partners Management LLC is a US-based global private equity firm specializing in litigation and legal finance, judgment enforcement, asset recovery, and related strategies serving claimants, businesses, private investment funds, law firm and other professional service firms across the world. The firm provides capital and expertise that enables such parties to shift risk, significantly enhance the probability of a successful and timely resolution of claims, and/or maximize the effectiveness of their businesses.
Commercial

Is a Mysterious Litigation Funder Part of a Vendetta?

Does a litigation funder have a vendetta against Queenstown mayor Jim Boult? That’s the contention after a reveal that Chris Meehan is connected to the funding of a case against Boult. The case alleges that Boult’s companies, Stonewood Homes and Holmfirth Group, traded while insolvent. Millions of dollars were lost, and investors want their money back. Meehan himself is involved in a few nearby developments, one of which is in Queenstown. Stuff New Zealand details that Boult is claiming that Meehan has ulterior political motives for funding the case against him, including an attempt to derail the next mayoral election.  Boult applied for, and was granted, a short stay in the liquidation. For his part, Meehan claims that his only motive for funding the case was profit.   The Judge, Owen Paulsen, was not convinced that Meehan had ulterior motive. Journalist Ann Wilson was reportedly paid by Meehan to gather intel on Boult and had signed a restrictive NDA. This led Wilson to believe that Meehan did, in fact, have a vendetta against Boult that became evident as he announced his plan to run for mayor in 2016 Ultimately, Judge Paulsen ruled that the liquidators were doing their jobs properly and that there’s nothing inherently illegal about Meehan wanting to make a profit.
Commercial

Relief for Litigation Funders Courtesy of ASIC

As new regulations for funders in Australia take effect, the Litigation Finance landscape enters a new era. In addition to the requirement that litigation funders hold a license and the new classification of funds as ‘managed funding schemes’, ASIC has issued some relief for funders. Lexology explains that the new regulations, passed in May, took effect as of August 22. The Instrument 2020/787 was implemented to soften the transition for funders, and help them adjust to this new framework. Regulations are scaling back a bit regarding passive members of class actions. This is particularly important because class actions are such a major focus of the new regulations. Some argue that they were implemented specifically to curb the number of large class-action suits. The Instrument requires that funders take all appropriate measures to notify class members, but no longer has to provide updates on the case or provide disclosure statements on the funder’s website. The new rules also remove the requirement of application forms for passive members of a class action. Withdrawal procedures are also changing. Funders are excused from their obligation to routinely assess the value of scheme property. This includes PDS, fees and costs, and annual fees among others. The new requirements mandate that funders register as managed investment schemes. These MISs must have a compliance plan, a constitution, and an auditor held accountable for said compliance. They must also adhere to anti-hawking rules, which govern how and when claimants can be contacted. PDS is required for general members—defined as any member of an MIS who is not the funder or attorney. Most lawyers and funders agree that these changes are a step in the right direction for class action cases. They appear to meet the goals of governments and businesses in terms of improved transparency and enhanced accountability for funders.
Consumer

Industry Opponents Continue to Push for Regulation of Consumer Legal Funding

Much has been made about the interest charged by consumer legal funders in mass tort cases. One study suggests that interest rates are as high as 60%. Some are using such figures as the basis for clamping down on the practice of Litigation Finance, even if that comes to the detriment of those who rely on such funding in the pursuit of justice. Legal Newsline presents the need for reform as a foregone conclusion. But is it? The main sticking point seems to be complaints that what funders charge is too high. Funders respond by explaining that the non-recourse nature of the funds necessitates high interest. After all, there’s a very real chance that funders will see nothing if the case they’re funding does not end in settlement or award.   One might wonder—is the backlash against consumer legal funding really about the fees? Or is the problem that insurers, big businesses, and even governments are on edge about the newfound ability of citizens to rise up and seek legal remedy? Mass torts and class actions in particular are a vital part of what litigation funders do. Large, complex cases with multiple plaintiffs can take years to reach completion—not to mention costing thousands of dollars that most ordinary citizens simply cannot afford. If regulation puts a stranglehold on third-party funding, the number of new mass torts and class actions being filed would likely decrease dramatically.
Commercial

Omni Bridgeway Seeks to Protect Litigation Funding in Australia

It’s no secret that not everyone is a proponent of Litigation Finance. In Australia, new regulations threaten to permanently alter how class action suits are managed, and how litigation funding can be used to assist them. Andrew Saker of Omni Bridgeway, a major funder, is speaking out. Global Legal Post explains that in Australia, a coalition of “pro-business” advocates is pressing for change. Their reaction to litigation funding for class actions isn’t unexpected or surprising. Third-party funding of class actions makes it more likely that such businesses, and even the government, will be held accountable for their misdeeds. Earlier this year, a parliamentary inquiry led to an expensive and time-consuming requirement that funders must have an AFSL license and comply with provisions of the managed investment scheme protocols. Omni Bridgeway, a leading funder in Australia, has stated that they welcome improvements to the existing system, and will comply with licensing and disclosure requirements. The funder is also consulting with ASIC in the hopes of making adjustments to existing rules. The problem funders are having with the new rules isn’t so much the extra paperwork—but whether or not the changes are achieving the stated goals. After all, class actions are often expensive, take years to bring to a close, involve a lot of people, and tend to be highly complex. Moreover, the defendants are often large entities with an arsenal of lawyers and monies with which to fight back. With that in mind, Litigation Finance may well be the only viable option when a group is wronged by a large business or government entity.