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KBRA Assigns Preliminary Rating to TVEST 2020A, LLC Note

NEW YORK--(BUSINESS WIRE)--Kroll Bond Rating Agency (KBRA) assigns a preliminary rating to one class of notes from TVEST 2020A, LLC, a $123 million securitization collateralized by litigation finance and medical receivables serviced by Experity Ventures LLC (“Experity”). The TVEST 2020A, LLC notes (“Notes”) represents Experity’s first ABS securitization collateralized by litigation finance and medical receivables. Experity, formed in April, 2019, is the parent company of the various receivable originators including Thrivest Legal Funding LLC (“Thrivest”), a direct to market pre-settlement legal funding company with a history of originations dating back to 2009 and ProMed Capital Venture LLC (“ProMed”), a recently acquired leading medical lien funding company that has been originating since 2017. Experity is also the parent of four other litigation finance receivable originators that were formed in connection with strategic financing and operational partnerships with third parties. The portfolio securing the transaction has an aggregate discounted receivable balance (“ADPB”), including assumed prefunding, of approximately $160 million as of the May 31, 2020 cutoff date. The ADPB is the aggregate discounted cash flows of the collections associated with the TVEST 2020A, LLC portfolio’s litigation funding receivables (“Litigation Receivables”) and medical receivables (“Medical Receivables” and, collectively, “Receivables”). The discount rate used to calculate the ADPB is a percentage equal to the sum of the assumed interest rate on the Notes, the servicing fee rate of 1.00%, and an additional 0.10%. As of the cutoff date, Medical Receivables comprise 83.20% of the portfolio by count and 67.44% by advance amount and have an average advance to expected settlement case value (“Expected Case Worth Ratio”) of 22.06%. Litigation Receivables comprise the remaining 16.80% of the portfolio by count and 32.56% by advance amount and have and Expected Case Worth Ratio of 8.77%. The Notes benefit from credit enhancement in the form of overcollateralization, a cash reserve account and a capitalized interest account. The transaction also features a $20 million prefunding account that may be used to purchase additional Receivables during the three months after closing, subject to certain eligibility criteria. Click here to view the report. To access ratings and relevant documents, click here Disclosures Further information on key credit considerations, sensitivity analyses that consider what factors can affect these credit ratings and how they could lead to an upgrade or a downgrade, and ESG factors (where they are a key driver behind the change to the credit rating or rating outlook) can be found in the full rating report referenced above. A description of all substantially material sources that were used to prepare the credit rating and information on the methodology(ies) (inclusive of any material models and sensitivity analyses of the relevant key rating assumptions, as applicable) used in determining the credit rating is available in the U.S. Information Disclosure Form located here. Information on the meaning of each rating category can be located here. Further disclosures relating to this rating action are available in the U.S. Information Disclosure Form referenced above. Additional information regarding KBRA policies, methodologies, rating scales and disclosures are available at www.kbra.com. About KBRA KBRA is a full-service credit rating agency registered as an NRSRO with the U.S. Securities and Exchange Commission. In addition, KBRA is designated as a designated rating organization by the Ontario Securities Commission for issuers of asset-backed securities to file a short form prospectus or shelf prospectus. KBRA is also recognized by the National Association of Insurance Commissioners as a Credit Rating Provider and is a certified Credit Rating Agency (CRA) with the European Securities and Markets Authority (ESMA). Kroll Bond Rating Agency Europe is registered with ESMA as a CRA.

ABA Adopts Guidance in Third-Party Litigation Funding

This article was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC). On August 3, 2020, The American Bar Association (ABA) House of Delegates, by a vote of 366-10, voted to adopt the resolution for “Best Practices for Third-Party Litigation Funding”. This established a slew of national guidelines that law firms, consumers and legal funding companies should follow. We applaud the ABA in setting these standards that ARC and its members already follow. Some of the items that they highlight are:
  • The arrangement should be spelled out in writing.
  • The writing should make clear the non-recourse nature of the investment the funder is making in the claim; how the funder will be compensated
  • Who is responsible for paying the funder, from what source (g., the recovery after trial or settlement) and when (e.g., time period after receipt of judgment or settlement funds)
  • The arrangement should be structured so that the client retains control of the litigation, and not the funder.
  • Lawyers should be cautious in making case-related reports or predictions.
  • Funding agreements should state the amount of funding to be provided, the amount or method of calculating the return to the third-party funder, and how and when the proceeds of the party’s recovery are to be distributed among Funding agreements should provide a fair, transparent, and independent dispute resolution process.
  • Funding agreements also should include a recommendation that a party obtain independent legal advice as to whether to enter into the proposed There should also be a confidentiality obligation for the funder that survives termination of the agreement
  • In client-funder financing, the third-party funder and the party should be the sole parties to the funding agreement, in order to avoid any potential attorney conflicts of interest, should the party and the funder disagree on a material issue during the course of the litigation. Many non-recourse finance agreements ask the attorney to promise the funder that the attorney will notify the funder when the case is resolved.
  • Limitations on a third-party funder’s involvement in, or direct or indirect control of, or input into (or receipt of notice of), either day-to-day or broader litigation management and on all key issues (such as strategy and settlement), should be addressed in the funding agreement.
  • Lawyers may want to obtain written acknowledgement that the funder will not seek to control the litigation or the expense.
These items are consistent with the statutes that ARC and its members support in legislation. ARC fully supports proper regulation of the Consumer Legal Funding Industry across the country. Eric Schuller President

Class Action Accuses Banks of $500MM in Overcharges

UK Litigation Finance firm Woodsford is funding a class action against BT, AMP, and Commonwealth Bank. If successful, the case could bring the funder as much as 25% of any potential reward. Craig Allsopp, class action leader at Shine, who has taken on the case, has said that funders generally receive between 20-30% of awards from successful cases. The News Daily explains that the class action suit against Commonwealth Bank, BT, and AMP alleges that the banks improperly signed members up for a superannuation fund at a higher rate than is appropriate. A claim has already been lodged against AMP, with BT and Commonwealth Bank claims to follow. Allsopp stated that Shine law firm is confident that the evidence shows overcharges of more than $500MM. Essentially, the banks are accused of vertical integration—which includes the practice of selling in-house products at artificially inflated prices. Allsopp calls this practice both “illegal” and “unfair” to clients. The difference in policy costs varied, but BT and CBA are accused of charging 10-30% more for comparable services. AMP was even more aggressive, charging between 30-50% more. The claimants assert that this isn’t representative of an error or two—but that the evidence is indicative of systemic misconduct by the banks. While signups to the claim are still ongoing, Shine law firm suggests a possible membership class of half a million people. Shine is expected to contact bank members past and present to inform them of the claim.

Pravati Capital Completes Expansion to Key Markets and Adds Accomplished New Hires to its Distinguished Leadership Team

NEW YORK, July 29, 2020 — Pravati Capital, leading litigation finance pioneer and consulting firm, today announced four new members to its esteemed leadership team, each complementing the firm’s outstanding services and legal insight. Joining Pravati Capital, Bruce Cohen, Douglas Smith, Scott Potter and Shane Ham will bolster the company’s litigation practice with specialized experience to better serve clients. Pravati Capital announced four new members to its esteemed leadership team, each complementing the firm’s outstanding services and legal insight. Joining Pravati Capital, Bruce Cohen, Douglas Smith, Scott Potter and Shane Ham will bolster the company’s litigation practice with specialized experience to better serve clients. The accomplished new additions bring a wealth of knowledge in areas such as debtor-in-possession financing, complex litigation and commercial litigation, and will help steer and strengthen the firm’s plans for growth, while expanding its footprint to key markets including New York, Los Angeles and Dallas. As Pravati Capital continues to grow and scale, the strategy will remain on developing attractive alternative investment funds that offer solid returns at a low risk given that assets are not related to the economic cycle. The established focus combined with the specialized experience will allow the industry leader to explore new and existing opportunities within the dynamic and growing field. “We are thrilled to welcome these accomplished individuals and look forward to the value they will add to our insight and practice,” said Alex Chucri, CEO at Pravati Capital. “Our clients are our top priority and we are confident these additions will enhance our company as we continue to grow and offer exceptional service as we expand our practice of finance litigation.” New additions to Pravati Capital’s leadership includes: Pravati Capital welcomes Bruce Cohen as Director of Business Development in the Dallas office. Cohen’s 30 years of well-rounded background add extreme value to the firm and his past positions include Senior Legal Director at PepsiCo, Inc., where he was responsible for sales and antitrust matters in its Frito-Lay subsidiary and Associate General Counsel of Verizon Communications Inc. A former U.S. Army Field Artillery Officer, he is a Distinguished Graduate with Honors of the Virginia Military Institute and received his Juris Doctor summa cum laude from the University of Georgia School of Law. Cohen was a litigation partner at a prominent Atlanta law firm and has appeared in trials, regulatory proceedings and appeals in over three dozen states. He holds advanced degrees in history and law from Michigan State, the University of North Texas, and King’s College London. He previously served as a Special Assistant to the Attorney General of Texas, and as a judicial law clerk for a judge of the United States Court of Appeals for the Fifth Circuit. “I’ve really enjoyed the challenge of learning about litigation finance and explaining it to law firms and legal departments, many of whom really didn’t know it existed, let alone the ways it could help their practice and their teams,” said Cohen. “It’s still a nascent business in many respects, and I look forward to helping it grow.” Doug Smith serves as Senior Commercial Lending Advisor in the Scottsdale, AZ office. With a 30-year background managing corporate and commercial real estate lending, Smith focused primarily on structured finance transactions, Debtor-In-Possession bankruptcy restructuring, and distressed loan portfolios. Prior to the private sector, he worked for Congressman John Rhodes, Minority Leader of the U.S. House of Representatives during the Carter and Reagan administrations. Currently, he is a member of the Arizona board of directors for a commercial bank and President of the private non-profit Phoenician II Foundation. In the past, he has served as a member of the Board of Directors for the Maricopa County Industrial Development Authority, the Board of Directors for the Arizona Chamber of Commerce, the Maricopa County Community Development Advisory Committee and the Arizona Republican Party Finance Committee. “The economy is experiencing major dislocation and businesses will need debtor-in-possession and debt restructuring services for some time to come,” said Smith. “Pravati is uniquely positioned to provide these financial services in an efficient and creative manner to middle market enterprises.” Scott Potter joins as Director of Business Development in Pravati Capital’s home office in Scottsdale, AZ. Potter honed both his legal and client relations skills through a decade long commercial litigation career and an additional four years of in-house counsel experience. He was the corporate counsel and global client relations manager for an international manufacturing firm and the vice president of legal affairs for a national lien company. Scott is a graduate of both the Marriott School of Management and the J. Reuben Clark Law School at Brigham Young University. He has practiced at the administrative, trial and appellate levels in both real estate and commercial litigation and represented both billion-dollar corporations and impoverished individuals. Scott has served on the Arizona State Bar’s alternative Dispute Resolution committee and been named a Southwest Super Lawyer Rising Star. “My parents always said I could excel at anything that I wanted to do.  What I always wanted to do was help people to be happy,” said Potter. “Pravati gives me the chance to lift financial burdens from others as they seek greater peace in their lives.” Shane Ham joins as a Legal Investment Analyst in Pravati Capital’s home office in Scottsdale, Arizona. Formerly a litigation partner at Osborn Maledon, he focused on complex commercial and personal injury matters. His practice spanned a broad variety of topic areas, from constitutional law to medical marijuana compliance. Prior to attending law school, Shane spent nearly a decade in Washington, D.C. where he worked as a producer on a political talk show and a technology policy analyst for a prominent think tank. Shane received both his Bachelor of Arts degree in Political Science and Juris Doctorate (magna cum laude) from the University of Arizona, and he clerked for then-Vice Chief Justice Andrew D. Hurwitz at the Arizona Supreme Court. “As a litigator I saw too many cases that were strong on the merits but had to be abandoned because the plaintiff did not have the funds to fight for years against a deep-pocket defendant,” said Ham. “At Pravati I get to help level the playing field, and give people who have been wronged a chance to have their day in court.” “The new additions to our leadership team will continue to support our vision of transformation and innovation, which together with leading and breakthrough insight and practices within our industry, will allow us to continue serving our clients as we grow in the future,” added Pravati Capital’s CEO Chucri. About Pravati Capital As a leader in the litigation financing field, Pravati Capital has changed how companies and law firms envision their future. For more than a decade, we have been at the forefront of litigation financing solutions, creating innovative sources for bridge capital. It is our mission to provide innovative, efficient capital solutions for law firms, compassionate assistance to plaintiffs, and a secure alternative investment option for accredited investors.

Helene Roins joins Litigation Capital Management (LCM) in Sydney

Litigation Capital Management Limited, a global provider of disputes funding, publicly listed on the London Stock Exchange’s AIM market, is pleased to announce the hire of Helene Roins as an Investment Manager based in Sydney. With extensive experience in insolvency and restructuring, commercial litigation, insurance disputes and class actions, Helene joins LCM after more than two years with a Sydney-based litigation funder where she was responsible for the assessment and management of a number of high-profile insolvency projects and class actions. Prior to her transition into litigation finance, Helene spent 15 years in private practice, most recently as a Senior Associate at TressCox Lawyers (now HWL Ebsworth Lawyers) where she acted for corporations, shareholders, directors and insolvency practitioners in a variety of litigation involving insolvency and restructuring, bankruptcies, insurance, intellectual property and other commercial disputes across State and Federal jurisdictions. Among Helene’s notable achievements, she has conducted various liquidator’s examinations in the Supreme and Federal Court under the Corporations Act, led a team of lawyers in defending an A$30 million claim under a D&O policy on behalf of an insurer and acted for a shareholder in Federal Court proceedings commenced against the company and its directors for the unlawful reduction in share capital, unlawful re-organisation of the company and breach of officer’s duties. Commenting on Helene’s hire, LCM’s Chief Executive Officer Patrick Moloney said: “We are very pleased to welcome Helene to the LCM team. Helene is a highly experienced practitioner with a specialisation in insolvency claims which is an area where we anticipate there will be significant growth for LCM in the next 12 to 18 months. Helene will be a great addition to our high-performing team of investment managers, and she joins at an exciting period of growth for LCM globally.” Helene Roins added: “I am delighted to be joining such a reputable organisation that has experienced strong growth over the past few years. LCM’s history and strong track record, particularly in insolvency and commercial litigation claims funding, is strongly aligned with my own experience in both private practice and more recently in the litigation finance industry.” Helene is a member of the Law Society of NSW, the Women’s Insolvency Network Australia, and Women in Insolvency and Restructuring Victoria. In April 2020, Investment Manager James Foster and Chief Financial Officer Mary Gangemi both joined LCM in London. Their hires followed the March closing of a new US$150m third-party fund backed by significant global blue-chip investors. The fund marked LCM’s return to managing third-party funds, following its building of a permanent source of balance sheet capital through the equity markets. About LCM Litigation Capital Management (LCM) is a leading international provider of litigation financing solutions. This includes single-cases and corporate and law firm portfolios across class actions, commercial claims, claims arising out of insolvency, including assignments, and international arbitration. LCM has an unparalleled track record, driven by effective project selection and robust risk management. Headquartered in Sydney, with offices in London, Singapore, Brisbane and Melbourne, LCM listed on AIM in December 2018, trading under the ticker LIT.

Key Takeaways from LFJ’s Quarterly Industry Roundup on Commercial Litigation Funding

This past Thursday, July 30th, Litigation Finance Journal held a special digital conference covering the key issues facing the commercial funding industry. Moderator Ed Truant (ET) of Slingshot Capital helmed a roundtable discussion which included panelists William Farrell (WF), co-founder of Longford Capital, Robert Hanna (RH), co-founder of Augusta Ventures, and Molly Pease (MP), Managing Director of Curiam Capital. Mick Smith, co-founder of Calunius Capital, whose new venture Almatura is now being launched, was slated to join, but unfortunately a power outage at his home left him unable to attend the virtual event. Below are highlights from the event which covered a range of topics currently facing the sector: ET: Does the level of activity, at least in the US Federal Court System, surprise the panelists? Would you have expected to see the same number of cases? WF: This data that you’re describing is not surprising at all. We’re in a tremendous time of economic uncertainty and volatility following the COVID-19 pandemic. And that environment is expected to create controversies and stimulate litigation. At Longford Capital, we have also seen the results of that with an increase in interest among law firms and among corporate litigants for litigation financing in some of the same areas your data suggests have seen an uptick in litigation—namely corporate litigation, corporate contract disputes, and insurance, namely insurance recovery for business interruption or property damage. RH: I think there was an increase in the number of inquiries we were seeing anyway. Slowly, lawyers are generally accepting litigation funding more than they have in the past. As a result of our friends at Burford, they’ve always been a very high-profile poster child for the industry which has made the corporate world, certainly in the UK, aware of litigation funding. Come the virus, all of a sudden, we decided that we thought maybe the cases were going to take longer to reach a resolution. So we, like a lot of other funders did, added six months to the life cycle of the case when valuing our portfolio. Interestingly, I was speaking to a high court judge the other day and she was saying we’ve seen more resolutions year-to-date than we saw in the high court the whole year 2019. Thanks to the virus, you’re getting resolutions in many cases quicker than you might otherwise have seen. There is definitely a positive influence on litigation. There is going to be more and more litigation, more insolvency that will create opportunity. Immediately what we’re seeing is a search for liquidity. MP: I definitely agree with what Bill and Robert have said. I think looking at the Lex Machina numbers, I think it’s probably even an underestimate. I’m sure there are plenty of cases that were filed that may have been initiated for COVID-related reasons but the complaint itself might not actually mention COVID. I think with any downturn people tend to be more litigious and may take on suits that they may not otherwise have decided were worth it in an environment where things were moving up and looking positive. We’ve definitely seen a lot of activity at Curiam, and I think there are people who are considering filing litigation if they can get the right financing in place and have the economics make sense, who may not have considered it. It’s just something that seems more worthwhile to them in the context of the economy right now. ET: To what extent do you think Litigation Finance will get involved on the insurance litigation side? Is that deemed a good case type to pursue? Is there some concern about going up against well-capitalized insurance companies, or is litigation finance particularly well-suited to those pieces of litigation? RH: I think we’re a little bit different in the UK. The FCA (financial conduct authority) has actually taken some test cases in this space. Everyone is waiting, rather nervously on the insurance side of things, to see the result of those. Certainly from our point of view, we haven’t taken on business interruption cases just yet. We’ll see what the result of the FCA cases, then there will be plenty of time to react accordingly. ET: Is that the Hiscocks case everyone is looking at? The class action? RH: That’s the one everyone is talking about, absolutely. So it’ll be interesting to see what happens there. WF: There have been thousands of insurance claims filed and lawsuits are following once the insurance companies have been denying claims. And I think that number of insurance recovery lawsuits will increase into the hundreds of thousands in the United States. Many companies are looking at their business interruption provisions of their insurance policies and their property damage provisions and asking lawyers to apply the circumstances to their particular policies. Some that we’ve seen are asserting claims based directly on the COVID-19 pandemic. What we find is a lot of policies have exclusions or disclaimers against coverage for pandemics or other types of health issues. So as a result, I see other claims being filed that are basing the damage on something else—either properly damage, or interestingly, government authority intervention. It’s going to be difficult for the insurance industry to deal with this massive influx of claims. And I’m sitting back evaluating policies on a case by case basis. Our conclusion is that many cases do not rise to the level of confidence that we need to pursue a case. I’m also interested to see if the US Government will in some way intervene—as a stimulus or some sort of economic package to help the insurance industry. You asked if these would these insurance recovery cases be interesting to funders because the defendants—these big insurance companies are very well funded. In our experience at Longford Capital, the defendants in the cases in which we’re involved are typically well-funded. And we like that attribute because it eliminates other concerns like credit worthiness or collectability risk. So that’s not a detriment to our involvement. It’s a positive when the corporate defendant or other type of defendant is able to hire the very best lawyers and come to reasonable commercially-minded outcomes. And then if they’re unsuccessful in their defense, that they’ll be able to pay a judgement. ET: We’re at a point in time over the next coming months we’re probably going to see a significant increase in insolvencies unfortunately. Do you view this as attractive part of the marketplace and is it something where your firm is focused? WF: We at Longford Capital have identified the bankruptcy arena as a very fertile ground for us to be able to help law firms and companies that are in distress of one sort or another. The example that I see every week is a company that moves into bankruptcy has shuttered its doors perhaps and is suffering tremendously on top line revenue and perhaps its greatest remaining asset is a meritorious legal claim. And when companies are in a distressed situation it has seemed to be that they end up being the victims of fraud and breach of contract even more often than usual. So I suspect that our industry will be able to assist in those situations. RH: When we started Augusta, we were convinced that we were going to see an awful lot of insolvency claims coming to us. I think the problem is that what you’ve got in the UK, is you’ve got a very closed group of IP agents who are very familiar with valuing risk. Hence, as a funder, if you’re shown a claim by an IP agent, then you’ve got to be very careful and understand why they’re showing this to you and not funding it themselves. We were surprised at how unsuccessful we were at getting access to good insolvency cases, and so we’ve funded a number but not the number we thought we were going to do. ET: Survey results that were published by Above the Law, taking a look at Litigation Finance Perspectives in the legal community. There we saw some very positive trends that came out of the survey as it compares to 2019. The survey response references 70% usage versus 41% last year, with probably a disproportionate amount of that usage coming from smaller sole practitioners and smaller law firms. I’m curious as to the panel’s perspective on how the survey results impact how you originate and create relationships within the legal community? RH: Surprisingly, we still get the vast majority of our cases from lawyers and law firms that we’ve built relationships with. I’d say it’s 70-75% we get from lawyers. We are seeing more and more claimants aware of litigation funding. Some of them do come to us direct. But typically they will go to their trusted lawyer and say ‘I want to know about Litigation Finance, tell me what it’s all about, tell me what you think I should do.’ The lawyers and funders have always had a sort of love-hate relationship. They’ve always been very wary of funders. They always think that we’re going to interfere with the relationship between them and their client. But now they’re being forced to really work with us funders because their clients are asking them to do that. I think that’s the big trend. MP: For the most part we still get the majority of our opportunities, or at least the good opportunities, from law firms. So I agree on that. I think that there has been a trend for quite a few years now for in-house counsel and clients being under pressure to control the costs of outside law firms. And I think that being concerned about how the billable hour is going up and budgets are increasing significantly and GCs are being asked to do more with less and have to work with their law firms to try to come up with alternative fee arrangements or some way to keep the costs of outside counsel under control. That push supports interest and a move toward litigation funding. I think for a while now clients have been saying to firms, ‘what can we do to try to keep this under control, to make sure that the budget doesn’t exceed what we’re expecting.’ ET: Do you think the industry has a bit of a PR problem? And the US still remains one of the few countries that does not have an industry trade association at least on the commercial side, they do on the consumer side. What are your thoughts about trade association in the context of the US?   WF: I like the idea of an industry trade association. I particularly like the idea of a multinational trade association so that we can continue to share ideas and best practices across jurisdictions. I like speaking to Robert, for example, to learn from his experiences in the UK. I think we would benefit as an industry from that. When I was in private practice we spent significant time representing trade associations and see great benefit to those. I suspect that in short order that we as an industry will take steps to put that in place. ET: I heard Burford make some comments about a global trade organization coming in, so we’re just waiting on that official announcement. Robert, from your perspective, you have an industry association in the UK, and I believe you’re active in it. How has that been working out? And do you suffer any of the same PR issues in the UK as compared to the US? RH: I think ALF has a very good role in the industry. It’s there to self-regulate the industry. It’s done that well, I believe. What it isn’t, necessarily, is a mouth piece. It’s not a PR machine. So I totally agree with Bill. I think there is room for an international trade association to get both sides of the story out there. I think there is a need for a more vocal PR mouthpiece for the industry. Litigation funding is not rocket science, but it is there to level playing fields if necessary. Sure it’s there for large corporates to take liabilities off balance sheets and use other people’s cash. But it’s a very transparent process and a very valuable one. At the lower end of the scale it provides access to justice which is really important. And that message should get through.

Burford Hosts Roundtable on Restructuring and Liquidity

COVID continues to impact the business world in ways few were ready for. The already evident spike in insolvency and bankruptcy litigation is expected to grow in the coming months and beyond. Burford Capital spoke with industry experts to get their thoughts on these developments. They include Margot MacInnis of Grant Thornton, Jason Yardly of Jenner & Block, Derek Lai of Deloitte China, and Thomas Janover of Kramer Levin. When asked what types of cases would be most prevalent in the near future, Lai predicted that fraud cases may increase. He suggested that when businesses are scrambling to make up for losses, fraud may follow. Margot MacInnis brings up insurance claims, which are already contentious, as insurers look for ways to hold back payouts related to COVID closures. Jason Yardley explained that the issues that caused the 2008 financial crisis were never fully resolved. This means that insolvency cases, including disputes over the value of assets, will be huge. Thomas Janover echoed that sentiment, saying that he expects more litigation involving breach of contract suits and endless valuation testimony. When asked how to best address the needs of clients in financial distress, MacInnis states that insolvency lawyers must have detailed discussions with clients about their options. Only through informed decision making can businesses make good choices on how to proceed during a pandemic. Lai suggests reaching out to clients to develop relationships and assuage their fears while streamlining risk management. Being able to help clients in crisis with swift, decisive action can make all the difference.  As with most things, the keys to financial survival in the time of COVID include strong communication, solid information, and flexibility.

Litigation Finance—High Risk, High Reward

After gaining considerable steam during the economic crisis of 2008, the Litigation Finance industry has only increased in popularity since. Predictions suggest that by 2027, the litigation funding sector will be worth more than double what it is now. The Edge Markets explains that lit fin is an attractive option for investors for a few key reasons. First, litigation funding doesn’t correlate with the rest of the market. Individual claims may vary in value—particularly when a defendant’s net worth drops drastically. Litigation funding also has a slower investment cycle, since cases can take years to resolve. At the same time, when funders become involved with cases after specific milestones are met, the time between investment and payout becomes much shorter. Jay Greenberg of LexShares details that unlike other alternative asset classes, Litigation Finance has a clear resolution and ending. Cases eventually reach a resolution that typically comes down to a clear win or loss. Litigation funding is generally considered a risky venture—especially if the funding is for a single case or class action. Investing in a litigation portfolio may mitigate this risk, but also limits potential rewards. Funders, by law and ethical standards, do not have a say in decision making in the cases they fund. That means a client may decide to accept a lowball settlement, leaving funders eligible to receive less than they put in. A trend toward funding for smaller and mid-size cases can also lead to less risk for investors. If this continues, investors may find opportunities to make less risky lit fin investments that still increase access to justice for those who need it most.
Litigation Finance News

Litigation Finance Journal’s Quarterly Industry Roundup

It’s clear by now that 2020 has been a year like no other. Industry growth and the impact of COVID make this an ideal time to catch up on all of the relevant issues impacting the commercial Litigation Finance industry. With that in mind, LFJ is hosting a panel discussion that will cover a wide range of topics, including the Burford/Muddy Waters saga, the IMF/Omni merger, the rise in IP litigation, hedge fund interest in the funding sector, and much more.  The panel will be moderated by Slingshot Capital founder Ed Truant. Truant is an investor with a unique perspective on commercial litigation finance, backed up by years of experience in the field. The panel will feature a collection of industry experts:  Molly Pease is the managing director of Curiam Capital, and a former litigator whose expertise includes insurance, antitrust, and securities. She has also been an Executive Director and has worked as General Counsel—providing her a varied and nuanced perspective on a vast array of legal subjects. Mick Smith is the founder of Almatura, and co-founded Calunius Capital in 2006. He has studied Mathematics and Law at Cambridge, and is pursuing a Masters in Data Science. Robert Hannah, co-founder of Augusta Ventures, spent 20 years managing hedge funds before becoming acting Chief Investment Officer for Mako Investment Managers—an organization he co-founded. Hannah has an LLB and an MBA from Cranfield School of Management. He is currently the Managing Director of the London office. William Farrell Jr. is the managing director and co-founder of private investment company Longford Capital. His current duties include underwriting, sourcing, and monitoring investments. He has decades of litigation experience and as a government prosecutor. Farrell has also served as a partner in the commercial litigation departments of two different firms. The panel is audio-only and will be held Thursday, July 30th at 1 pm EST. It will feature a 45-minute panel discussion that will be followed by a question and answer period with attendees.  For more information and to purchase tickets, please visit this link.