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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.
Commercial

Professionals Speak Out on the State of Patent Law

IP law is a vital part of the Litigation Finance landscape. Patent and intellectual property litigation are industry mainstays, and represent the most-funded legal sector. As such, changes in the IP ecosystem impact the Litigation Finance world as well. Investors Digest assembled a panel of experts to discuss where the markets are headed. The first step in evaluating trends on the state of patent eligibility is to maintain a focus on system-wide changes, rather than on individual cases. Of course, every case is different and may not be indicative of sweeping industry trends. The panel had much to say on the matter. Russell Binns, CEO of Allied Security Trust, thinks there’s a great year ahead. He stated that 2020 will likely provide more clarity, especially in regard to Section 101, which determines which patents are eligible. He also expressed the importance of not treating patent litigation like a commodity—which may be a subtle swipe at Litigation Finance. Annsely Merell Ward, attorney at WilmerHale, is expecting an active market for patent litigation, along with more collaborations including sharing platforms and pools. Similarly, Jamie Underwood, a global IP strategist, predicts a bullish market on a global scale. Patents are being granted in higher numbers, and not just in the US. Currently, Japan, South Korea, Germany, Switzerland, and China have all adopted strong patent systems. Kent Richardson, a partner at Richardson Oliver Law Group, is using internal surveys and data to determine how to proceed. He is confident that patent prices are leveling out and becoming increasingly predictable—which is good for the industry on the whole. Daniel Papst of Papst Licensing agrees with predictions of a bull market. He also points out that an upcoming German Supreme Court ruling may improve efficiency in patent cases. Michael Gulliford of Soryn IP Group states that the totality of the IP world is heading in the right direction.
Announcements Commercial

Omni Bridgeway welcomes Tim DeSieno as Global Director of Distressed Debt and Senior Investment Manager

Omni Bridgeway (ASX:OBL) is delighted to welcome renowned leader in emerging markets debt restructuring, Tim DeSieno as its new Global Director of Distressed Debt and Senior Investment Manager. Mr DeSieno will be based in New York and will be responsible for developing Omni Bridgeway’s global distressed debt business, which the Company has decided is a key part of its strategic growth. Mr DeSieno will also help identify and manage distress-related litigation funding opportunities in emerging markets globally, with a special focus on Latin America. Mr DeSieno has over 30 years’ leading law firm experience advising institutional investors in managing their distressed debt investments around the globe, including most recently as a senior partner at Morgan, Lewis & Bockius LLP. His work for clients has spanned junk bond workouts in the 1980s/1990s, the Asian currency crisis in 1998, the global financial crisis in 2008, and the financial fallout of Covid-19. “Omni Bridgeway is expanding its global footprint and service offering, and principal investing in distressed debt is an important part of our strategy. Mr DeSieno is a highly respected leader in his field of emerging markets debt restructuring, and we are very fortunate to have him join us to spearhead this work. His expertise complements our insolvency, enforcement, and asset tracing teams, and it is particularly relevant in the current economic climate,” said Mr Andrew Saker, CEO of Omni Bridgeway. Tim DeSieno said: “I am beyond excited to join the Omni Bridgeway team. The Company’s successes and strategic growth, including in fields directly related to mine, have made it very attractive. I am confident that the largest dispute finance team in the world will be an excellent platform for creating a distressed debt business and a Latin America-focused litigation finance portfolio. It also does not hurt that I have known and respected Mr Saker for close to two decades – I certainly look forward to teaming up with him again!”
ABOUT OMNI BRIDGEWAY
Omni Bridgeway is the global leader in dispute resolution finance, with expertise in civil and common law legal and recovery systems, and operations spanning Asia, Australia, Canada, Europe, the Middle East, the UK and the US. Omni Bridgeway offers dispute finance from case inception through to post-judgment enforcement and recovery. Since 1986, it has established a record of funding disputes and enforcement proceedings around the world. Omni Bridgeway is listed on the Australian Securities Exchange (ASX:OBL) and includes the leading dispute funders formerly known as IMF Bentham Limited, Bentham IMF and ROLAND ProzessFinanz. It also includes a joint venture with IFC (part of the World Bank Group). Visit omnibridgeway.com to learn more.
Announcements Commercial

Forbes Ventures Plc – Update on Litigation Funding Securitisation

Forbes Ventures is pleased to announce that, further to the announcement of 2 March 2020, it has established a wholly owned UK subsidiary, Forbes Ventures Cell 1 Limited (the “UK Cell”). The UK Cell has been established to acquire UK-issued litigation funding loans, through the assignment of the related receivables - i.e. the litigation funding loans themselves and the interest thereon (“the Securitised Assets”) - to Forbes Ventures CC 1 (the “Maltese Cell”). The Maltese Cell is a Securitisation Cell Company in Malta, which is held in a bankruptcy remote structure and as such is not owned by the Company. To finance this securitisation, the Maltese Cell will shortly be issuing a prospectus relating to the proposed offer (the “Offer”) of 2-year bonds (the “Bonds”) and their admission to trading on the Malta Stock Exchange.  The Offer has an aggregate value of EUR 35 million.  A further announcement will be made at the time of closing of the Offer, which is expected later in September 2020. The net proceeds of the Offer will be paid to the UK Cell as consideration for the assignment of the Securitised Assets  to the Maltese Cell, and will provide the funds for the UK Cell to acquire litigation funds in the UK. Forbes Ventures’ wholly owned subsidiary, Forbes Ventures Investment Management Limited (“FVIM”), acts as originator and collateral agent for the UK Cell and is responsible for the selection and oversight of the Securitised Assets.  FVIM will receive a cash fee for this transaction, upon closing, equivalent to 2% of the funds raised in the Offer. It is the Company’s intention that the infrastructure which it has established for this securitisation will also be used to facilitate the securitisation of both further litigation funding and other assets across a range of industries.  The Company confirms it is in discussion with multiple prospective counterparties from whom it may purchase assets for this purpose. Further announcements will be made upon the Company entering into any such arrangements. The Directors of Forbes accept responsibility for the contents of this announcement.