The contentious divorce of Putin ally Farkhad Akhmedov and his wife, Tatiana, has produced escalating divorce proceedings for nearly two decades. Lawyers for each party have asserted multiple claims of previous divorces that can’t be corroborated, requests for personal emails between father and son, and now—an accusation of champerty regarding Burford Capital’s funding of Tatiana Akhmedova. Technically, the backing of claims by third-party funders in exchange for profit has been illegal in Russia since feudal times.The Guardian reports that Tatiana was awarded a whopping GBP 453MM in 2016, which is roughly 41% of her husband’s assets. Akhmedov disputes the ruling and claims that he and his ex-wife were already divorced 20 years ago. Documents were presented to this effect but were later determined to be forged. The former Mrs. Akhmedova is also pursuing action against her son for his part in Akhmedov’s refusal to pay the award.Attempts to reap the full award are being backed by Burford Capital. Burford's participation is considered questionable, as Russia has yet to enact laws regarding litigation funding. Lawyers for Akhmedov are demanding to see the details of Akhmedova’s agreement with Burford. They further assert that funding of this type is not permissible in family law cases.Assets include a super yacht, a writing desk once used by Napoleon, art by Hirst and Warhol, and other rare antiquities. Lawyers for the Akhmedovs will reference a recent case in Hong Kong that ruled this type of third-party funding illegal.
The global financial crisis of 2008 brought with it a flood of class action litigation against big banks. A similar wave of litigation is expected in the post-COVID world. Indeed, it might be even more widespread. In recent years, the rules and procedures surrounding the formation of class action suits have become more sophisticated. Advances in the understanding and use of Litigation Finance make pursing class actions less complicated.City AM reports that class action suits are already popular in the US, and the UK is expected to follow suit as big banks are held accountable for malfeasance toward their customers. The thinking in legal circles is that increased litigation is a foregone conclusion post-Coronavirus.Christopher Bogart, CEO of Burford Capital, has stated that the reality of the Coronavirus is that it will bring about a huge number of legal disputes. Questions surrounding insurance coverage or contract specifics will be plentiful. Expansive access to litigation funding means many of these cases will go the distance in court.Businesses are already forming groups to take on insurers and others who have already refused to meet their contractual obligations during shutdowns and work stoppages. One such group, Hiscox Action Group, is pursuing claims against Hiscox insurance, with funding from Harbour Litigation Funding. The use of social media makes finding claimants for class action suits easier than ever. Combined with the wealth of funding provided by third-party funders, it’s easy to understand why class action suits will be a popular means of seeking recompense after the pandemic is behind us.
The pandemic is far from over, but the steps that legal firms are taking to mitigate it have only just begun. Third-party funders are already seeing shifts in the way firms are approaching them. It’s not surprising that law firms will be creative and proactive in heading off financial woes before they occur—but it is startling how quickly things are changing.Eric Blinderman, CEO (U.S.) of Therium Capital Management, writes on Therium's blog that his firm is already seeing a major upswing in funding requests for single cases. This seems to indicate that some firms are already strapped for liquidity, or that savvy managers are trying to get ahead of the coming money crunch by reducing risks and freeing up funds for other activities.Perhaps the most striking aspect of this, is the fast formation of special practice groups specifically for COVID-19-related cases. These are likely to include securities litigation, breach of contract, insurance recovery, and more. Such groups are already overwhelmed with claims relating to business closures, supply chain issues, and a deluge of other losses.One could argue that COVID-19 has given us a new legal specialty—pandemic management. This unique situation we all find ourselves in is leading to a flurry of change in legal circles that’s bound to permanently impact law in general and litigation funding in particular. It’s fortuitous that lit fin has become so accessible in times when low-income litigants would otherwise have no affordable legal recourse.
An Australian class-action suit against prominent online entities has taken major strides forward in recent weeks. Targeting Facebook, Google, and Twitter over their refusal to accept cryptocurrency advertising, the case has amassed over one billion Australian dollars. This staggering number makes it one of the largest class action cases in the country.Peakd reports that a detailed analysis of the damages brought about by the ad ban on various types of cryptocurrency services include $110 billion in crystalized loses, and a further $250 billion in un-crystalized losses. The lower volumes and prices caused by the lack of ads ultimately led to a stark devaluation of various cryptocurrencies, multiple failed IPOs, as well as a sharp decline in profits from currency mining equipment. Companies such as Steem experienced a steep lag in growth and engagement on their platforms.In Australia, lawyers are not permitted a share of recovery from cases. In this case, that translates to lawyers working for free. Over the last three quarters, a team of legal experts has worked off-the-clock to collect evidence and conduct research, believing the case to be meritorious.More is needed, though, to take this class action to completion. The case requires a “bookbuild,” which refers to a large number of signups, which are already secured. Also, a Senior Counsel advocate must state that the case has merit and should move forward. Given the numbers here, it seems an attractive option for large litigation funders. It’s estimated that $3-5 million will be needed to take the class action all the way through the system.
ARDMORE, Pa., May 7, 2020 /PRNewswire/ -- Balanced Bridge Funding, LLC ("Balanced Bridge") now offers a special financing program for plaintiffs involved in settled sex abuse cases, who have awards and are interested in receiving a portion of their award upfront. In cases like USC George Tyndall and Larry Nassar, plaintiffs are placed in categories in accordance to their level of abuse. Once they receive notification of their award, they may want to access a portion prior to the anticipated distribution. Balanced Bridge can give them the option to do that. "Our past experience dealing with plaintiffs in these kinds of cases has given us the confidence to move forward with this specially designed program," says Joseph Genovesi, CEO of Balanced Bridge. As a direct funder, Balanced Bridge is able to communicate and coordinate funding to plaintiffs with awards in a matter of days. Rogue gynecologists like Larry Nassar, George Tyndall, and Nikita Levy are well known because of the abuse they rendered to their patients. Each of them was accused of sexual abuse, and because of that, the institutions they worked for were also sued. USC, Michigan State, U.S. Olympics, and John Hopkins University eventually settled with the plaintiffs, costing these institutions millions of dollars. However, with such settlements, the monetary awards the plaintiffs are slated to receive can take a long time to payout. Plaintiffs who have received notification of their award for their settled case and are interested in receiving a portion upfront can complete an application on Balanced Bridge's website. They can also contact the company via email at info@balancedbridge.com or call 267-457-4540.
In her 65-page decision, Justice Jillian Mallon ruled that the case against Ross Asset Management will go to trial. This came after ANZ Bank filed to have the case thrown out before trial. Ross Asset Management has been called the biggest Ponzi scheme in New Zealand since its went under in 2012.According to theNZ Herald, investors entrusted at least $450 million to Ross Asset Management, much of which was allegedly grossly mismanaged with help from their bank, ANZ. Charges in the class action include breach of trust, misused overdrafts which led to fraudulent fees and interest charges, and negligence. Estimated losses are listed around $100 million, though only $10 million has been recovered thus far.At least 500 investors have signed on to take part in the class action, which is being funded by LPF Group. Their arrangement indicates that LPF Group will get 25% of the award should the case settle by the end of June. If the case goes into July and beyond, LPF will receive 30%.Without funders like LPF, investors may not have been able to organize for a class action of this size and length. The alleged breaches all occurred prior to 2012, which means the case could take more than a decade to reach a conclusion. This is exactly the kind of high-value case where litigation funders can be of the most help to clients who have been wronged by large entities.
Balanced Bridge Funding, LLC (“Balanced Bridge”), a specialty finance firm based outside Philadelphia, is ramping up their legal funding efforts to provide capital to plaintiffs and attorneys working on a contingency fee basis. Balanced Bridge’s post-settlement funding product is specifically designed to help bridge applicants from the time of settlement to final distribution of payment. Joseph Genovesi, CEO of Balanced Bridge, said, “It’s during these difficult times that our services are needed more than ever. This is arguably the biggest upheaval the world economy has ever faced, but we stand ready to help those individuals and law firms waiting for payment from settlement agreements now delayed due to disruption of the courts.” Balanced Bridge is one of the premier direct funders in the legal finance space, which consists of firms that provide financing to plaintiffs and plaintiffs’ attorneys at different stages of litigation. Some offer pre-settlement funding, others provide case-cost financing, and very few specialize in providing post-settlement funding, which is Balanced Bridge’s flagship product. Many companies in the legal funding space are not direct funders, rather brokers who receive a commission for arranging financing between the plaintiff, their attorney, and the funder. Because Balanced Bridge is a direct funder backed by institutional investors, they are equipped to advance funds between $10,000 and $10 million directly to the applicant within a matter of days. Among the current settled case awards and fees Balanced Bridge can finance include the Route 91 Festival Shooting, Larry Nassar, USC George Tyndall, Roundup, and many more. Balanced Bridge is prepared to fund plaintiffs with settlement awards from a variety of settled cases. Qualifying plaintiffs would receive a portion of their award upfront. In addition, plaintiffs’ attorneys can obtain financing on their fees tied to settled cases. SSDI, Veterans’ Disability, and court appointed attorneys can also secure funding from Balanced Bridge based on their delayed fees. To apply for funding, please fill out this quick form. For more information about their funding process, please call 267-457-4540 or email info@balancedbridge.com. URL : https://www.balancedbridge.com
In this episode, we sat down with Maurice MacSweeney, Director of Litigation Funding at UK-based Harbour Litigation Funding. Maurice discussed the issue of enforcement - what is enforcement, what are the inherent challenges, and what does it take to be successful? Maurice also touched on some key issues facing the enforcement sector, including enforcing against cryptocurrency and in investor-state arbitrations. He also discussed COVID-19's impact on enforcement, and explained what funders like Harbour can do to help aid enforcement efforts. [podcast_episode episode="5470" content="title,player,details"]
Last week, Dealmakers hosted a virtual event titled 'Law Firm-Funder Partnerships in a Time of Economic Uncertainty.' The event was sponsored by Validity Finance, and featured a panel of speakers including Alanna Clair (AC), Partner at Dentons, Jordan Goldstein (JG), Partner and GC at Selendy & Gay, Joshua Libling (JL), Portfolio Counsel at Validity, and Reed Oslan (RO), Partner at Kirkland & Ellis. The panel was hosted by Bob Robertson (BR), Strategic Advisor at Dealmakers. Below are some key takeaways from the event: BR: Let's discuss the genesis of the Working Group's report (the rebuttal to the NYC Bar's controversial opinion that litigation funding may violate fee-sharing), and what the key takeaways are. JG: Rule 5.4 generally prohibits fee sharing between firms and non-lawyers. The purpose of the rule is to protect the professional independence of attorneys. The committee determined that litigation funding of firms or cases where fees are split might violate Rule 5.4. But this doesn’t include funders who work with the client rather than the attorney.The NYC Bar opinion is relevant in terms of persuasive authority, but not enforcement. The working group looked to see if Rule 5.4 needed to be revised. All members wanted to amend this rule to allow firms to work directly with funders. The disagreement was regarding disclosure and consent for clients, and to what degree funders could lend input to lawyers. There are two different proposals outlined—and the group was evenly split between them. Members disagreed on the exact parameters of informed consent.The consensus though, was that Litigation Finance can and should be permitted under ethical rules. The takeaway is that some disclosure will be needed, but there’s leeway in terms of when and how much information should be disclosed.BR: There’s a broad spectrum of opinions on Litigation Finance. How will the current economic climate impact those perceptions?RO: In 2008-2009, litigation funding was hard to find. At the same time, we had a significant uptick in demand in my own firm. This drove the growth of lit fin for many years. Today, I see more of the same. The US has a well-developed Litigation Finance industry. It’s a perfectly valid form of funding, and the demand for risk-sharing will be far greater than it was in 2008. Litigation funders are going to do quite well on this.JL: If you start by looking at the problem from the client and firm perspective, they have a need for revenue, but don’t have capital for payouts. Clients pressure firms, firms look to relieve pressure. Taking that capital and shifting the risk to increase liquidity is becoming more central to a firm’s business model.RO: Litigation Funders can act in ways that law firms can’t. Example: providing capital directly to clients during a case. I see an increase in demand for that kind of financing that can happen based on the value of a case.JG: Funders can also fund just the expenses rather than the whole case. Experts, vendors, etc. Lit fin can bridge the issue for clients with complicated cases.BR: Some funders are willing to enter into single-case transactions with law firms, as long as the return is structured as a multiple, while others are more apt to secure portfolio funding to address Rule 5.4 concerns. What is the panel's reaction? RO: In terms of what I've seen in the market over the years, I think the funders want to get as many portfolio funding deals as they can, to get more money into a portfolio to diversify their returns. And there are times where law firms and clients prefer one-off deals. So I've seen both. There are more single-case deals than portfolio deals, because there simply aren't that many large meritorious portfolios of claims to invest in. BR: How can firms ethically secure funding for themselves and clients? What’s the road map?AC: We’re likely to see a higher number of firms and cases turn to Litigation Finance. So it’s more important than ever not to get sloppy with ethics. There’s a fairly defined roadmap now, unlike in 2008. Work product protects materials, mental impressions of counsel etc. Sometimes work product has to be shared with funders, which carries risk. Executing an agreement to define what will be shared and with whom should be common. There should be an agreement in hand before any information is shared.Communique with the funder is essential to ensure that they can give informed advice. There’s nothing inherently unethical about this relationship. In terms of independence, those paying the lawyer’s fees aren’t allowed to influence their professional judgment—their primary duty is always to the client. RO: We don’t share work product with funders. We’re really careful in not sharing anything that might someday come out. We just don’t do it because not every judge will rule appropriately on this.JG: This law is still developing and there are states that are outliers in terms of disclosure rules. There are proposals moving through congress that would require disclosure in a greater number of cases. Clients should be informed, though this could be more complex in a portfolio sharing situation. Shopping different funding situations is not unethical. The devil is in the details. I’d urge clients to err on the side of informing their clients.
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