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Closing the Gender Gap in Law

Burford Capital recently joined forces with InterLaw Diversity Forum for a study on ways to improve diversity in large firms. To that end, a panel of experts gathered to discuss the issue. Included were: Burford’s Elizabeth Fisher, Rothschild’s Sarah Blomfield, Patti Kachidza at M&G Prudential, and David Jackson from Barclays. Burford Capital reports that the major focal points should include corporate culture within firms, recognizing family responsibilities that impact women more than men, work-life balance, origination credits, implicit and unconscious biases, and factoring in why women are less likely to self-promote in the workplace. Because most large law firms are run by men, the tendency is to train, develop, and promote men to the partnership track. The intricacies of billing and compensation for lawyers means it’s more difficult to discern whether all staffers are being treated equitably. More transparency would lead to more fairness—if only because others would be watching. Gender biases can punish women with the same qualities that are praised in men. Ambitious women are called “pushy,” a woman expressing dissatisfaction may be called “overly emotional” or “moody.” Accepting this as a factor is one thing—finding strategies to combat it may be far more difficult and complicated. Origination credit is at once a solid marker for success at a firm, and also a foundation for a long-lasting equity gap in compensation. Surely those doing the actual work for a client are more deserving of compensation than those who aren’t. It was suggested by several experts that clients could have an impact on this, simply by asking the firm about origination credit. It’s disappointing to realize that 80% of those surveyed state that their firms have no official policies in place to improve diversity. Diversity isn’t just about numbers—it’s about having a team that can better represent clients both demographically, and in terms of bringing a varied skill set to the table.

Litigation funder Validity Finance secures $100M in new capital, adds first time corp. counsel from Fried Frank

NEW YORK (July 28, 2020) – Looking to meet growing demand among businesses and law firms to finance commercial disputes, litigation funder Validity Finance has raised $100 million in additional capital. The firm also announced the arrival of experienced transactional attorney Jason Listhaus to fill the new role of in-house corporate counsel as its portfolio continues to grow. Validity’s additional capital comes from a mix of institutional and private investors, including the firm’s founding private equity sponsor TowerBrook Capital Partners.  Validity CEO Ralph Sutton commented: “We’ve seen a pronounced increase in demand this year fueled, in part, by the pandemic. Businesses and law firms are experiencing unprecedented cost constraints and welcome our backing to pursue or monetize claims. Our latest capital raise will help us continue to meet our clients’ needs for funding their most important litigation matters in the current challenging economic environment.” Since launch, Validity has committed more than $125 million in dozens of deals across a range of litigation and arbitration matters and jurisdictions. Mr. Sutton noted that large law firms have increasingly been drawn to third-party funding during the slowdown, as brand-name practices with large litigation platforms see the value in having individual clients receive funding and also of having the direct backing for a basket of cases while they stabilize finances and preserve cash. “Funding had already become mainstream in the last several years but the pandemic has hyper-charged the acceptance and use of contingent, non-recourse funding by major law firms and well-capitalized clients,” he said. Validity has funded a broad spectrum of litigations and arbitrations: including breach of contract, patent infringement, breach of fiduciary duty, theft of trade secrets, domestic and international arbitration, judgment/asset enforcements, insurance coverage cases and others. A growing allocation is going towards portfolios of cases handled by law firms. Validity also announced that experienced finance and transactional attorney Jason Listhaus has joined as its first corporate counsel. The New York-based Mr. Listhaus will help manage deal-side aspects of Validity’s investments, including helping structure and negotiate funding arrangements. He joins the firm’s bench of former trial lawyers who work on underwriting, risk and case review. His arrival helps the firm transition from using outside counsel to handle its expanding book of transactions. “Jason is a great addition as we grow our capital base and pace of investments, not only in the U.S. but internationally,” said Validity’s Chief Risk Officer Dave Kerstein, noting the firm recently launched an Israeli office in Tel Aviv. “As our first in-house corporate counsel, Jason will help streamline the investment process and also lower transaction costs. As a corporate lawyer with a background in Big Law, he has a strong grasp of deal advisory details and investment strategy.” Mr. Listhaus was previously a member of the Corporate department at Fried, Frank, Harris, Shriver & Jacobson, as well as an associate in the Financial Services group of Cadwalader, Wickersham & Taft. He earned his joint J.D./M.B.A degree from New York University in 2013. Mr. Listhaus earned his B.A. degree in Economics, magna cum laude and Phi Beta Kappa, from NYU in 2009. Validity Finance has been steadily expanding in 2020. In June, Validity opened its first international office in Israel, the company’s fourth, alongside its U.S. offices in New York, Chicago, and Houston. The Israel office is headed by international-disputes lawyer Eli Schulman in Tel Aviv. Earlier this year, in March, attorney Joshua Libling joined Validity as a portfolio counsel in New York. About Validity: Validity is a commercial litigation finance company that provides non-recourse investments for a wide variety of commercial disputes. Validity’s mission is to make a meaningful difference in our clients’ experience of the legal system We focus on fairness, innovation, and clarity. For more, visit www.validity-finance.com.

Omni Bridgeway resolves to fund claims on behalf of Wirecard AG shareholders against Ernst & Young GmbH

LONDON, 28 July 2020: Omni Bridgeway Limited announces that it has resolved to fund proposed litigation to be brought by shareholders of Wirecard AG against its auditor, Ernst & Young GmbH. Such litigation will be brought in Germany by leading international law firm Quinn Emanuel Urquhart & Sullivan LLP. BACKGROUND German company Wirecard AG was compelled to initiate insolvency proceedings in Germany on 25 June 2020. The catalyst for this inevitability was that its auditor, Ernst & Young GmbH, informed Wirecard AG on 18 June 2020 that no sufficient audit evidence could be obtained in relation to cash balances in trust accounts that were to be consolidated in the consolidated financial statements in the amount of EUR 1.9bn. A matter of days afterwards, Wirecard AG was then forced to acknowledge that the EUR 1.9bn in cash included in those financial statements probably never existed in the first place. The consequence of the recent actions of Wirecard AG is that the share price of Wirecard AG has dropped by over 95%. In these circumstances, shareholders have rightly turned their attentions to the auditor who has been in post since 2008. All of the audits of Wirecard AG have been unqualified. This is despite the fact that, over the last years, Wirecard AG has been the subject of intense scrutiny by shareholders, short sellers, journalists and regulators. Wirecard AG has also been the subject of two key external reviews – one by Rajah & Tann, a respected Singapore law firm, and the other by KPMG. PROVIDING AN OPPORTUNITY FOR WIRECARD AG SHAREHOLDERS Jeremy Marshall, Senior Investment Manager of Omni Bridgeway, said “Shareholders have understandably relied increasingly heavily on the audited financials of Wirecard. The nature of the Wirecard insolvency is such that it was inevitable that serious claims would be levelled against the auditor, and it is only right that we provide shareholders with the opportunity for redress, particularly where their prospects of a modest recovery against Wirecard itself are so limited.” WHAT AFFECTED SHAREHOLDERS CAN DO Shareholders who purchased shares in Wirecard AG since 1 April 2012 are encouraged to contact:
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 proud 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.
ABOUT QUINN EMANUEL URQUHART & SULLIVAN LLP
Quinn Emanuel is the largest law firm in the world dedicated solely to the resolution of business disputes. Quinn have 800+ attorneys working in 23 offices in ten countries around the world, including 4 offices in Germany. Quinn Emanuel sees litigation as an independent practice that calls for a high degree of specialization. As an integral part of the firm’s international network of offices, Quinn Emanuel’s German legal team is dedicated to providing the highest standards of service, professional excellence, industry knowledge and experience that firm clients expect. Quinn Emanuel has taken a leading role in some of the largest security cases that are currently pending before the German courts, including the representation of the largest group of investors (by damages) participating in model case proceedings against Volkswagen AG in the Higher District Court of Brunswick centering on the so-called “Dieselgate” scandal. Quinn also represented a group of Tier-1 bondholders in litigation against Hamburg Commercial Bank.

Delta Capital Partners Management Welcomes a New Board of Advisors

CHICAGO, Illinois, July 27, 2020 -- Delta Capital Partners Management LLC, a global private equity firm specializing in litigation and legal finance, has announced its new Board of Advisors.

Delta has developed an outstanding Board of Advisors that consists of eight members who are experts in government relations and geopolitical affairs, public relations and marketing, investigations and intelligence gathering, and capital markets. The members include:

  • Ian Casewell – London Office Managing Partner of the Mintz Group, a top-tier business intelligence and investigation firm, and a former Europol intelligence analyst;
  • 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, and former CEO of a highly technology company and one of the fastest growing Internet companies;
  • Brian Maddox – Senior Managing Director at FTI Strategic Communications with over 30 years of experience in public relations and marketing;
  • 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 Counsel; and
  • Geoffrey Verhoff – Senior Advisor at Akin Gump, and former Vice Chairman of the Republican National Committee’s Finance Committee.

Christopher DeLise, Delta's Founder, CEO and CO-CIO, stated, “We are honored to have such accomplished and highly respected professionals on Delta’s Board of Advisors. Their backgrounds, innumerable achievements within their respective fields, and vast and deep experiences will help Delta execute various strategic objectives and further enhance and distinguish Delta’s strong position within the litigation finance industry. These eight outstanding individuals join Delta’s team as the firm continues its U.S. and global expansion to meet the evolving needs of end-users.” 

About Delta

Delta Capital Partners Management LLC is a US-based, global private equity firm specializing in litigation and legal finance, judgment and award enforcement, and asset recovery. Delta creates bespoke financing solutions for professional service firms, businesses, governments, financial institutions, investment firms, and individual claimants.

BRYANT PARK CAPITAL & MULTI FUNDING, INC SECURE A $30 MILLION DOLLAR SENIOR DEBT FACILITY

NEW YORK, NY, July 27, 2020 - Bryant Park Capital (“BPC”), a leading middle market investment bank, announced today that Multi Funding, Inc (“Multi Funding” or the “Company”) recently closed on a $30 million senior debt transaction with a leading international bank. This capital injection will allow the company to accelerate top line revenue, expand its physical footprint, and operate as a significant player in the pre-settlement space.
BPC served as the exclusive financial advisor to Multi Funding in connection with this transaction.
“Bryant Park Capital is a true partner and worked alongside our leadership team every step of the way. Their in-depth industry knowledge, funding source relationships and sound business acumen are key ingredients to a successful capital raise. We enjoyed working with people of quality and anticipate a long and prosperous future together,” said Kevin Flood, COO of Multi Funding.
About Multi Funding
Multi Funding, established in 2008, is a successful pre-settlement litigation finance company with offices in Woodstock and Lynbrook, New York. They provide pre and post settlement funds as a non-recourse advance to clients. The Company is affiliated with sister-company Segue Cloud Services, which offers best-in-class proprietary litigation finance software that is tailor made to manage a pre-settlement business from intake to resolution. Multi Funding has established consistent growth and robust performance and is well positioned for scale, driven by improved data management/analytics, an experienced leadership team with over 20 years of blue-chip corporate experience, and continued access to efficient senior and junior capital.
For more information about Multi Funding, please visit www.multifundingusa.com.
For more information about Segue Cloud Services, please visit www.seguecloudservices.com.
About Bryant Park Capital
Bryant Park Capital is an investment bank providing M&A and corporate finance advisory services to emerging growth and middle market public and private companies. BPC has deep expertise and a diversified, well-founded breadth of experience in a number of sectors, including specialty finance & financial services and healthcare services. BPC has arranged lines of credit, raised growth equity, and assisted in mergers and acquisitions for its clients. Our professionals have completed nearly 300 assignments representing an aggregate transaction value of over $35 billion.
For more information about Bryant Park Capital, please visit www.bryantparkcapital.com.

“Edge” for Litigation Finance Managers

The following article is part of an ongoing column titled ‘Investor Insights.’  Brought to you by Ed Truant, founder and content manager of Slingshot Capital, ‘Investor Insights’ will provide thoughtful and engaging perspectives on all aspects of investing in litigation finance.  EXECUTIVE SUMMARY
  • As the litigation finance industry matures, there will be more competition, more fragmentation and more specialization
  • Competitive advantages will be necessary for managers to differentiate themselves in the marketplace and produce strong risk-adjusted returns
  • Managers should institutionalize their “edge” to create equity value for themselves, and separate the value of their organizations from the principals running it
INVESTOR INSIGHTS
  • Investors should be looking for managers that have some advantage, or “edge” vis-à-vis their competition; an informational advantage is one approach
  • Funders should be open-minded about their diligence process, and experiment with non-conventional approaches to add value to the case
  • Informational advantages may be particularly beneficial in collections and enforcements
In the capital markets industry, there is a concept referred to as “edge”, which can be defined as any legal form of information, insight or proprietary process or knowledge which an investor possesses that allows him or her to outperform peers and generate alpha.  Investors look for managers with “edge” as a point of differentiation, and as a means to lower risk and enhance returns in a given investment strategy. In thinking about how a litigation funder can develop ‘edge’, one option is to acquire an informational advantage that enables the funder to invest where others do not dare to tread, or avoid investing where the path is well worn.  One way to obtain an informational advantage is to look where others are not looking.  Today, we have at our disposal the world’s largest accessible database free for anyone to access – the worldwide web.  We also have the so-called “dark web”, where fewer dare to participate, but which may possess insights nonetheless. In order to get a better perspective on the nuggets of gold that lie within the web, I decided to reach out to Cameron Colquhoun of NEONCentury, a UK-based intelligence firm, to better understand how the litigation finance community may be able to generate edge. The Web…. In some ways, little has changed about our use of the internet in 30 years: we all still use screens, keyboards and mice to open windows and browser pages. What has changed, without exception, is the size of the world behind our screens – which is far bigger than our brains and imaginations can appreciate. As of 2016, Google revealed it knew of 130 trillion web pages, and the real number today is likely to exceed 200 or 300 trillion. To put it another way; as the Head of Security at Twitter pointed out back in 2011, one-in-a-million events happen on the internet every second, and one in a billion events happen almost as frequently. It is a mathematical near-certainty that within all of this data, game-changing intelligence is sitting there, waiting to be found - vital to the success of any litigation. The truth is, very few law firms or investors understand this reality, and therefore rarely ever engage or commission the type of intensive, detailed online investigations that are required to push the confidence intervals of success up by 1, 2, 5, 10 or even 20%. In the biggest cases, this can mean tens if not hundreds of millions of dollars of difference in settlement. …and the Dark Web The dark and unindexed web is another part of the web that is as yet untouched by both law firms and litigation finance. In particular, leaked data and data 'dump' sites hold huge amounts of pivotal intelligence. The most prominent case of leaked data to date is of course the Panama Papers, where millions of files belonging to a single Panamanian law firm were leaked online and led to over $1.2bn in recoveries (the real figure is likely to be far higher, as most countries do not make settlement data public). Dozens of prominent individuals had their assets exposed, and with millions of documents available to research – many more hidden assets and frauds are likely to be revealed amongst the 11.5 million files. Every time a new major leak is released online, (more recently BlueLeaks and 29Leaks), law firms or litigation financiers should be feverishly combing through its contents looking for angles. Case Study At NEONCentury, we are often tasked with conducting investigations prior to a potential litigation. In one case, a hedge fund asked for our help as they believed a group of CEOs were meeting in secret, and were considering a litigation. This global company, they suspected, was going to be sold for several billion below market value in some kind of backroom boys club deal. Using our data capabilities, we tracked the private jets owned by those who attended these meetings, but the planes were delisted from public view (this is known as a BARR / LADD request and often used by CEOs and Ultra High Net Worth investors for anonymity). BARR-listed jets do not appear on sites like FlightRadar and FlightAware. However, these aircraft, by law, must emit radio signals (ADS-B) data, and using the right online databases and sources, the aircraft can be tracked and historical manifests can be discovered. We were able to conclusively prove that the private jets belonging to three members of the secret meetings were all on the same runways at multiple times and locations, giving our client a route to a potentially multi-billion dollar litigation. It is difficult to imagine a single law firm on the planet that would have these capabilities in-house, or even understand the ‘art of the possible’ when it comes to open data. Today, litigation financiers allow law firms to manage the research and investigation sides of a case, hoping that either the law firms' in-house research teams or external corporate intel firms might yield further intelligence to tip the outcome in their favour. Law firms are not known for their technological prowess or understanding of the internet, generally, and therefore the litigation finance world may be missing real value in allowing law firms to manage the technical and cyber side of a case on their behalf. …the “Edge” If investors can accept that game-changing intelligence for any litigation is out there in the public domain, they may be better-prepared to commission this research directly with corporate investigations firms *before* any litigation is even considered. Investors would then be forearmed with a much stronger hand when they engage both law firms and claimants. This approach would greatly improve the ROI of litigation finance, and is analogous with the world of hedge funds and short-sellers. Many of these firms spend months or years investigating a company, searching for hidden value or opportunity. In the case of Wirecard, hedge funds discovered evidence of fraud just by conducting deep online investigations of Wirecard’s clients. Some walked away with billions in returns on this research. There is no reason why the same approach cannot be applied to the world of litigation finance: forward-thinking investors, who understand the power of corporate intelligence and the scale of the internet, can partner with world class investigators, and take these results to the right law firms to alter the course of multimillion and multibillion-dollar litigations. Investor Insights As the litigation finance industry matures, there will be a significant increase in managers who are attracted by the returns inherent in the industry, and the intellectual challenge of applying their litigation craft in another application.  The industry will scale, fragment and specialize.  This will make it more difficult for fund managers to differentiate their approach and value.  Forward-thinking managers should be looking at ways to create “edge” for themselves to attract institutional capital and generate superior risk-adjusted returns.  An informational advantage is one such way to create “edge”. As always, I am open to criticism and other points of view, so feel free to contact me to exchange ideas.  Edward Truant is the founder of Slingshot Capital Inc., an investor in the litigation finance industry (consumer and commercial) and a former partner in a private equity.  Ed is currently designing a new fund focused on institutional investors who are seeking to make allocations to the commercial litigation finance asset class.  Cameron Colquhoun is the founder of Neon Century, a former UK intelligence officer and winner of the Fulbright Award for Cyber Security. Neon Century is an elite corporate intelligence firm based in London, providing clients in the hedge fund, equity and litigation sectors with decisive advantage.

Assisting Clients with Relationship Management During COVID

Contract disputes are expected to rise dramatically during and after COVID, causing disruptions across entire industries. How should commercial attorneys manage this in a way that helps clients, without overburdening a shrinking resource pool? Bloomberg Law suggests three main ways lawyers can strategize with clients to stay ahead of issues that might lead to litigation. The first pertains to contract inventory. Reviewing contract inventory—particularly those contracts that seem fine at present—is a proactive way to stay ahead of the curve. A review allows lawyers and clients to identify impending risks and manage them before they turn into problems. This might include preparing for global supply issues, mitigating potential contract breaches before they occur, or looking at underwriting as a way to protect against future litigation. Next is the use of litigation as a tool for better business, as opposed to simply solving existing disputes. As litigation partner Jonathan Polak told Legalist, litigation can be a tool to force a business transaction. Seeing litigation as necessary to business rather than a sign of dispute or animus can help keep relationships from disintegrating in the face of legal action. Finally, there’s the issue of cost management in the long-term. It’s essential that clients make informed decisions about their cases, including understanding the long-term financial implications of pursuing litigation. When lawyers and clients work together to manage costs, solutions are more lasting and effective. Accomplishing this might include assessing financial pitfalls or finding solutions like alternative financing options, contingency contracts, or the use of Litigation Finance to make up for financial shortfalls. Ultimately, when attorneys work with clients to stave off problems before they occur, it improves lawyer-client relations, not to mention business relationships across the board.

How GCs Can Mitigate Economic Pressure

In today's pressing economic environment, it's worth asking how GCs are dealing with the financial uncertainties of COVID-19? Fortunately, Burford Capital held a roundtable discussion on just this very topic.  Burford Senior VPs asked industry leaders how they reassure clients in moving forward with affirmative litigation, and what factors impact those choices. What lessons should we take away from the last economic slide, and how has Litigation Finance impacted the industry? Reed Oslan of Kirkland & Ellis explains that Litigation Finance is really just the contingency fee model extended. He expects, like most in the industry, that funders will see a huge upswing in requests for funding. They’ll also be able to have their pick of cases and clients to choose from. Oslan treats plaintiff-side cases just like any other company asset. Maja Zerjal of Proskauer Rose, touts the benefits of using litigation funders to objectively assess the value of a claim as part of the underwriting process. For a financially strapped firm, getting a funder on board can mean the difference between pursuing a case or taking a pass. Using a methodical approach to vetting cases, then coming up with creative solutions to pursue litigation, drives value. Burford also asked lawyers how they led clients to enter into a funding agreement with a third-party. Cindy Sobel of Bartlit Beck details how, as a trusted advisor, she helps clients understand that third-party funding is key to allowing cases to move forward, while alleviating the associated economic burdens. She goes on to say that clients deserve to be well-informed of all options. Scott Gant of Boies Schiller Flexner sees a clear line between educating clients about funding, and advising them one way or another. He asserts that it may not be in the litigator’s purview to advise clients on third-party contracts. Charlie Lightfoot of Jenner & Block stresses the importance of planning. Early strategy sessions on how judgments will be executed or collections made, is far better than trying to squeeze an award from an intransigent stone.

How Litigation Finance Can Benefit Cases Mid-Litigation

Most lawyers know the feeling of a meritorious case moving along well, until it slows, and the funding to keep it going starts to run short. What is the next step when a client lacks the financial capability to continue? Is dropping the case to save funds a viable alternative, even if it means forgoing a potential award? Westfleet Advisors explains that if we take dropping cases off the table, there are two ways to address a lack of finances mid-litigation: altering the existing fee agreement with counsel or contracting with a litigation funder. Lawyers are not required to modify payment terms or to accept a contingency agreement mid-case. But it may be in their best interests to do so, if it means keeping a client with a viable case. If the client and lawyer agree that hourly rates are the best way to go, litigation financing via a third-party funder is a viable option. Outside funding can help clients meet financial obligations and relieve financial pressure on all sides. Funders are taking a risk when they enter into an agreement to provide financial relief to a plaintiff, as funding arrangements are contingency-based. Funders generally want to work with lawyers who are also assuming some risk. To that end, entering a case mid-litigation can be a positive for litigation funders. Working on a contingency basis means that case selection is vitally important, as is assessing the risk involved. Funders who enter cases in their later stages have access to more information which they can leverage to make optimal decisions. Ultimately, restructuring payments mid-case can be a benefit to all parties involved.