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Announcements Commercial

Omni Bridgeway funds first international arbitration seated in Hong Kong

HONG KONG, 4 June 2020:  Proceedings have been filed in Omni Bridgeway Limited's, (ASX:OBL) first funded international arbitration in Hong Kong since the Special Administration Region amended its Arbitration Ordinance (Cap. 609) to permit third party funding (effective February  2019). The funded proceedings are being administered by the Hong Kong International Arbitration Centre (HKIAC) under its 2018 Administered Arbitration Rules. Omni Bridgeway will finance the claimant, who is advised by leading Canadian firm Borden Ladner Gervais LLP. Further details of the dispute are confidential. In June 2017, Hong Kong amended its Arbitration Ordinance to expressly state that the torts of maintenance and champerty in Hong Kong, which have historically prevented third party funding, do not apply to third party funding of arbitration and related proceedings. A Code of Practice was published in December 2018 and came into effect in February 2019 to provide guidance on the standards and practices that third party funders are expected to follow. Cheng-Yee Khong, who heads Omni Bridgeway’s Hong Kong office said: "Omni Bridgeway has a long and successful history of funding insolvency related litigation in Hong Kong; however, the legal framework historically prevented us from funding other forms of dispute resolution. Since the legislative reforms in 2019, we have experienced increasing demand for funding in Hong Kong arbitration matters and this case represents one of the many strong prospects in our current pipeline. As Hong Kong is a leading global hub for international commercial arbitration, this demand has come from a range of jurisdictions including China, Japan, Korea, India, Malaysia, Indonesia, Vietnam, the Philippines, EMEA, USA and Canada. Many of these applications have come from sophisticated corporate users of arbitration, seeking to take advantage of the risk and cost management benefits of arbitration funding." The Borden Ladner Gervais team is led by partners and internationally recognized arbitration counsel Robert J.C. Deane and Craig Chiasson. Robert Deane said: “The opportunity to access financing for Hong Kong-seated arbitrations has been a significant and very positive development for our clients, especially in the current economic climate. It has allowed them to seek redress for the wrongs they've experienced in a way that makes good sense from a commercial and risk management perspective. We look forward to continuing to work with Omni Bridgeway on behalf of clients based in Canada and also around the world.” Sarah Grimmer, Secretary-General of HKIAC, said: "The availability of third party funding for arbitration and related proceedings in Hong Kong is a welcome development for users. HKIAC introduced provisions in its 2018 Administered Arbitration Rules to address issues that arise in respect of third party funding; namely, a limited disclosure requirement by the funded party, a confidentiality carve-out to allow information sharing with funders or potential funders, and in relation to the fixing and allocation of costs. HKIAC has seen several cases involving third party funders and expects more ahead." This news complements other recent developments for Omni Bridgeway in Asia, including the merger of the IMF Bentham and Omni Bridgeway operations globally.
ABOUT OMNI BRIDGEWAY
Omni Bridgeway is a 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.
Commercial

Vindicated Nickel Magnate Targets Vannin Capital

Eight hundred people lost their jobs when refinery Queensland Nickel became insolvent in 2016. Townsville, the locale of the refinery, found itself in financial peril after the collapse. Mayor Jenny Hill explains that the closure caused expansive economic and social issues that have still not been fully mitigated. The city claims to be owed $2.5 million by parent company QNI Metals. ABC News Australia reports that four years later, courts are only now determining that liquidators will not succeed in getting payment from owner Clive Palmer. A judge has ruled that the company was insolvent before liquidators were called in. Some suspect that there’s more information to be discovered here, though it’s unclear under what context that would take place. Perhaps the most striking aspect of this case is that Palmer has vowed to seek $50 million in compensation from prominent litigation funder Vannin Capital. Vannin entered a funding agreement with liquidators FTI Consulting attempting to secure funds from Palmer and Queensland Nickel. Palmer has stated that his company, Mineralogy, has lost millions of dollars because of this case and that Vannin and John Park owe him restitution. Interestingly, Palmer had previously requested that courts let him pay his remaining creditors directly. He sought to avoid paying FTI Consulting, who would then remit a percentage to Vannin. In addition to FTI Consulting, several other liquidators are currently seeking remittance on a flurry of other matters.
Commercial Covid-19

Will COVID-19 Mitigate Social Inflation?

Social inflation is a bit of a buzzword, used to describe a rising cost in insurance claims. Some say this is sour grapes from insurers who don’t want to pay out on pandemic-related policies. Others insist that social inflation is a real problem that, if left unchecked, can cause damage to the very concept of insurance. Insurance Business Magazine reveals that the delays caused by Coronavirus lockdown measures have led to an increase in early settlements. Attorney Ellen Greiper states that since May, she’s received a spike in calls from opposing counsel agreeing to offers they’d previously dismissed. She suggests that when plaintiffs realize that they may not see a trial date for a year or more, the idea of settling seems more attractive.   Plaintiffs may also realize that our world has changed in a way that may not allow for huge awards. When jurors have been laid off or their company shuts down, they may not be disposed toward giving multi-million-dollar awards even when the plaintiff is in the right. Some courts are beginning to open for specific matters. Overall though, the conditions in a courtroom are not conducive to social distancing. The same is true for depositions, strategy planning, and more. When clients are in dire financial straits, less money now can mean a lot more than more money a few years down the road. Litigation funders are weighing their options with this new dynamic in mind. Is it better to settle early, cutting down on the expenses associated with trial? Or does it make more sense to wait and go for a bigger award when the courts finally reopen? Obviously, the answer will vary from one case to the next. What we do know is that things aren’t expected to return to pre-COVID conditions any time soon—if ever.
Announcements Commercial

Leste Group Welcomes Rodrigo Machado as Managing Director of US Real Estate

MIAMI, June 2, 2020 /PRNewswire/ -- Leste Group is pleased to announce that Rodrigo Machado has joined its team as Managing Director of US Real Estate. Mr. Machado joined in May 2020 and will be focused on further expanding Leste Group's Real Estate investments business across the USA, in addition to overseeing Leste Group's existing investments in the Multifamily, Single Family Homes for Rental, Hospitality and Healthcare sectors.

"We are extremely proud to partner with Rodrigo. His extensive real estate investment experience across both Brazilian and US markets makes him the ideal candidate to lead the expansion of our real estate platform," notes Stephan de Sabrit, Head of Leste Credit and Real Estate departments & Partner at Leste Group.

Over the course of his 25-year career, which includes structuring the first ever REIT in Brazil, Mr. Machado has served in multiple leadership roles. At Brazilian Finance and Real Estate group he developed and was involved in real estate investment funds with assets over R$ 8 billion. He then rose to be Managing Partner of XP Investimentos, the largest independent investment platform, where he was responsible for numerous real estate funds with assets over R$ 4.5 billion. Prior to joining Leste Group, Mr. Machado founded Read Invest, an investment boutique providing financial solutions to investors seeking real estate investment opportunities in both Brazil and in the US.

For 14 years, Mr. Machado also served as the coordinator for forums, commissions and consultative groups in ANBIMA – the Brazilian Association of Financial and Capital Market Entities, SECOVI-SP – the Construction Industry Syndicate of the State of SP, and B3 - Stock Exchange. These 3 forums brought together the Real Estate Funds and Securitization industry of Brazil.

Mr. Machado studied Accounting Sciences at Universidade de Brasilia - UNB, and served as a guest professor for a variety of graduate and post graduate courses in real estate business at INSPER, Fundação Getulio Vargas - FGV (executive education programs), and Universidade de São Paulo - USP.

About Leste Group 

Leste Group is a market leading alternative investments platform focused on delivering consistent and superior risk-adjusted returns for our investors. Our bespoke investment solutions span the globe and utilize a wide range of strategies covering public markets, private equity, real estate, structured credit and litigation finance.

Please review our website – www.leste.com – for complete disclosures, or contact us on investors@leste.com.

Commercial

What You Need to Know about Asset Retrieval

It’s normal for a plaintiff to think that after a long court process and a favorable judgment, the worst is behind them. However, not every losing defendant is going to comply as they should. So when it comes to securing judgments and awards, asset tracing is a crucial component.  Burford Capital explains that asset tracing is a valuable service that experienced litigation funders may provide. Issues with asset recovery can be myriad, including monies being hidden in overseas or hard-to-find accounts, or cases that involve selling off assets without the authority to do so. At Burford, the habit is to invest in asset recoveries where the recoverable amount is in excess of $20 million. In cases with such large amounts, the debtor generally has connections around the world. Those with international connections may offer more opportunities for asset recovery. More monied debtors may also think they’re clever enough to hide their assets to prevent collection. Larger awards, though, can mean a larger investment of time and resources, leading to a more expensive recovery process. Even searching bank accounts can have multiple caveats. Any information obtained must be suitable for introduction in courts anywhere in the world, including unfriendly nations like China or Russia. Collecting large legal debt is not as simple as finding a bank account and putting a lien on it. Often what’s needed is a diverse strategy where investigations and multi-jurisdictional proceedings combine to produce leverage that leads to settlement. To accomplish this, asset recovery specialists have to obtain relevant information and then know how to use it effectively to incentivize remittance. Ultimately, a funder who is prepared to invest in asset recovery is a better choice for those seeking large awards than one without the experience and requisite resources. 
Commercial

Is a Legal Renaissance in the Works?

The pandemic, financial unrest, and now global protests are changing the ways we organize, communicate, and do business. What does this mean for the future of Legal Services? LexBlog explains that no one is really looking to return to the old status quo. Remote working is not ideal in every situation, but its prevalence during social distancing has shown that office space is not necessary for everyone. Business-as-usual in the legal community generally means incremental changes toward some long-term goals. But there’s always been fretting about enacting too much change all at once. That fear, it seems, is behind the legal world forever. Of course, necessity is the mother of invention. Many recent advancements in the way cases are handled came about through sudden bursts of innovation. Others, such as Litigation Finance, have come into prominence after being relegated to the background for a decade or two. Litigation funding is more important now than ever before, given that insurers are circling the wagons to ensure they aren’t bankrupted by pandemic-related payouts.
Announcements Commercial

Litigation Funder Validity Finance Expands to Israel, Taps Noted U.S. Litigation and International Arbitration Lawyer Eli Schulman to Head the First Israel Office of a U.S. Funder

TEL AVIV (June 2, 2020) – Leading U.S. litigation funder Validity Finance has opened its first international office, in Tel Aviv, recruiting prominent international-disputes lawyer Eli Schulman to head its Israel operations. Validity is the first U.S.-based funder to open an office in Israel. As co-founder of boutique litigation firm Schulman & Charish LLP, with affiliates in New York and Israel since 2010, Mr. Schulman has extensive experience representing Israeli clients in complex U.S. business litigation and international arbitration. He has advised companies across Israel’s dynamic high-tech sector, as well as those in established industries and the State of Israel itself. Validity's new Israel office marks the company’s fourth, alongside U.S. offices in New York, Chicago, and Houston. “This is a new day in Israel. We’re pleased to be the first U.S. funder on the ground, helping Israeli businesses secure critical capital to monetize commercial disputes and manage economic risk in a way that doesn’t drain operations and growth,” said Validity CEO Ralph Sutton. “We’re especially pleased to have Eli Schulman on board to lead our efforts in Israel. In addition to being an outstanding international disputes lawyer with a track record of success, he has experience using litigation funding in his own practice. With his reputation and appreciation for the needs of Israeli clients, Eli is uniquely qualified to help Israeli companies and law firms finance disputes on fair and ethical terms,” commented Sutton, who has known Mr. Schulman for years. A frontier for entrepreneurship, Israel leads the globe in per capita R&D spending, with a record number of startups, access to venture capital and more companies listed on the NASDAQ than China. Validity expects to invest in outbound cases on behalf of Israeli companies involving a range of contractual disputes, patent infringement, and other matters resolved in U.S. courts or international arbitration. Dispute Funding During COVID-19 Crisis Validity, like many other companies, has been operating remotely since mid-March. It has seen a significant increase in new case leads since then. These leads arise from law firms looking to stabilize their operations and a large number of clients in newfound need of capital for continued litigation. Validity’s Chief Risk Officer, Dave Kerstein notes, “We are committed to sustaining clients and law firms during the pandemic, and, as the sole US-based firm to operate in Israel, we anticipate many opportunities.” Israel’s handling of the coronavirus crisis has won praise across the globe with a wider return to business expected in the near term, and attending litigation and arbitration in need of capital. Mr. Schulman is recognized among leading dispute-resolution practitioners worldwide by Legal 500 and Chambers, which most recently described him as “dedicated and sophisticated.” He has been active in the international-arbitration community, including as a member of the ICC Commission on Arbitration and ADR. He is a fellow of the Chartered Institute of Arbitrators. Earlier in his career, Mr. Schulman clerked for then-Chief Judge Michael B. Mukasey of the U.S. District Court for the Southern District of New York. Mr. Schulman worked in elite litigation practice at Cahill Gordon in New York and Kellogg Hansen in Washington, D.C. Mr. Schulman also served in the Department of International Affairs at the Israeli Ministry of Justice. A former Fulbright fellow at The Hebrew University of Jerusalem, Mr. Schulman received his A.B. from Columbia University and holds a J.D. from Harvard Law School. “I’m delighted to join Validity’s exceptional team of former trial lawyers and investment professionals to expand dispute funding arising in Israel,” Mr. Schulman said. “While running a New York- and Israel-based disputes firm the past decade, I saw first-hand the need for companies to finance legal challenges. I’m excited to be Validity’s point person for disputes that emanate from Israel.” About Validity: Validity is a commercial litigation finance company that provides businesses, law firms and individuals with non-recourse financing for a wide variety of commercial disputes. Validity was founded in 2018 with $250 million in committed, one of the largest first-round capital raises in the U.S. market. The firm announced an additional $50 million in capital in 2019. Validity believes that capital and legal expertise combine to help solve legal problems on behalf of clients. Validity’s mission is to make a meaningful difference for clients by focusing on fairness, innovation, and clarity.  For more, visit www.validity-finance.com.
Announcements Consumer

NYU Law School Hosts Digital Conference on Funding

NYU Law School's Center on Civil Justice, creators of the first-of-its-kind Dispute Financing Library, will host an online, virtual conference discussing how the industry is shifting because of COVID-19. The conference will take place on Zoom on June 4, 2020, 2pm-5pm Eastern.  It will feature two panels -- the first discussing the impact of COVID-19 on the dispute financing industry and the second discussing other recent developments, from changes in law to important cases. The event is free, and registration is available here: https://tinyurl.com/TPLFconference. We are in the process of applying for 3 hours of CLE credit.  For more information, you can view the event website here.
Commercial Covid-19

Canada Prepares for Increased Litigation and Third-Party Funding

Like much of the world, Canada is seeing an influx of insurance disputes connected to COVID-19. As more and more insurers insist that their business closure contracts don’t provide protections during a pandemic—businesses and private citizen alike are seeking access to justice. Canadian Underwriter reports that Litigation Funding is prepped and ready to help wronged Canadian policyholders get their due. CEO of Slingshot Capital, Ed Truant, tells the publication that in the context of scrappy individuals versus callous giants—Slingshot Capital is poised to help the Davids, not the Goliaths (a clear nod to the biblical tale from which this funding firm gets its name).  Canada is a relatively new player in the Litigation Finance landscape. As recently as four years ago, Canada had no lit funding firms. Truant points to Australia as the origin of the funding model. Because litigation funding works to the advantage of both clients and firms, its growing popularity is not surprising.   Personal injury cases also make use of litigation funding. Commonly though, these arrangements offer financial support to plaintiffs to hold them over until the insurance company payment is remitted. In commercial lawsuits, however, funding is usually offered when plaintiff claims exceed $10MM, or thereabouts.