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Case Developments Commercial

Swiss Startup Funder Has Ties to Kazakh Man Accused of Money Laundering

Whilst the litigation funding industry has seen significant maturation over recent years, the potential for bad actors to be involved in the industry through new startup companies cannot wholly be eliminated. Investigative reporting by John Holland and Emily R. Siegel at Bloomberg Law has revealed ties between a Kazakhstan individual accused of money laundering and a litigation funding business  founded by his brother. Ilyas Khrapunov, who is alleged to have laundered hundreds of millions stolen from the Kazakh city of Almaty and from the country’s BTA Bank, is attached to Litigation Partners, SA as a litigation consultant. Daniel Khrapunov founded the Swiss litigation funding company in February of this year, with Ilyas’ role in the company being recorded in records from the Swiss Business Registry and in a statement to a New York court. Ilyas had informed the court of his involvement in Litigation Partners in response to a judgement ordering him to pay $221,000 to BTA Bank, over his use of laundered money in his real estate holding company, Swiss Development Group. Responding to Bloomberg Law’s requests for comment, Daniel Khrapunov stated that his brother was an ‘outside adviser’ to the funder and stated that he had founded the company using the proceeds from ‘a sale in 2020 of Swiss-based real estate purchased in 2004 by his mother.’ However, Bloomberg Law’s reporting includes two anonymous sources who work in the litigation finance industry, who claim that ‘they met with Ilyas Khrapunov to discuss litigation finance opportunities before and after Litigation Partners was formed.’ Ilyas did not respond to Bloomberg Law’s requests for an interview or comment. The full investigative report can be read here.
Commercial Regulatory Issues

LSLA Survey Finds Overwhelming Support for ‘Further Regulation’ of Litigation Funding

As we approach the end of 2023, it is a useful time to reflect on the state of the litigation funding market in the UK and to see how prominent industry groups are thinking about the future of the industry. A preview of an upcoming survey suggests that whilst litigation funding is thriving in terms of activity and demand, there is a growing consensus that new regulations are required. An article by The Law Society Gazette provides a summary of remarks made by Nicholas Heaton, head of competition litigation at Hogan Lovells, at the London Solicitors Litigation Association’s (LSLA) annual dinner last week. Heaton was delivering a preview of the association’s Annual Litigation Trends Survey, which included some very interesting insights into the perspective of solicitors on litigation funding. According to the Gazette’s article, Heaton explained that 79% of the survey’s respondents have been involved in ‘cases in which one or more parties are using litigation funding.’ Heaton went on to note that given this frequency of funding activity, it would be natural to assume that the solicitors surveyed would regard the Supreme Court’s PACCAR decision as a ‘major concern’. However, Heaton revealed that ‘only about 10% of respondents foresee a reduction in the availability of funding or increase in its cost as a result.’ Despite this largely positive view of the third-party funding market, Heaton also said that the survey had asked respondents about their views on the potential need for increased regulation of the industry. The response from these solicitors was overwhelming, as 88% of those surveyed agreed that ‘further regulation of some kind was required for litigation funding.’
Commercial Regulatory Issues

Judge Connolly to Refer Lawyers Involved with IP Edge for Ethics Inquiries

When it comes to contentious relationships between the courts and funders, the ongoing situation in the US District Court for the District of Delaware is perhaps the most notorious. Judge Colm F. Connolly’s efforts to enforce greater disclosure and transparency by funders involved in patent litigation appears to have now entered a new stage, as the judge has released an opinion alleging unethical behaviour by lawyers working with a funder.  An article in Bloomberg Law covers the latest developments in the case of Nimitz Techs. LLC v. CNET Media, Inc., where Judge Connolly is stepping up his investigation into litigation funding practices in intellectual property lawsuits. In an opinion released on Monday, Judge Connolly stated that he would refer lawyers associated with IP Edge for ethics inquiries, arguing that the lawyers “may have perpetrated a fraud on the court by fraudulently conveying the patents asserted in this Court to a shell LLC and filing fictitious patent assignments.” Judge Connolly’s written opinion put the spotlight on the involvement of these lawyers in around 60 patent infringement suits, where IP Edge had the controlling interest in the litigation but used shell companies to hide its presence from the court. The lawsuits were filed by Nimitz Technologies, Mellaconic, and Lamplight Licensing, but Connolly argued that IP Edge was the actual entity who owned these patents and was the driving force behind the filing of these lawsuits. Connolly went on to say that IP Edge was the “de facto owner of the asserted patents”, with the use of these shell LLCs “designed to shield the real parties in interest from the potential liability they would otherwise face.” Connolly stated that he would be referring George Pazuniakis, Jimmy Chong, Andrew Curfman, and Howard Wernow, to their state bars for ethics investigations. Whilst these four lawyers worked with the LLCs, Connolly also announced that he would additionally refer three lawyers associated with IP Edge: Papool Chaudhari, Gau Bodepudi, and Duy Tran. Of these seven lawyers, only Pazuniakis responded to Bloomberg’s request for comment, stating that “plaintiffs’ counsel followed the law, and had not done anything wrong or unethical or unprofessional.”
Commercial Special Features

Member Spotlight: Maros Kravec

Maros founded LitFin in 2018 after spending several years as a business director of a successful property development company in Manchester, the United Kingdom. As LitFin’s managing partner, Maros handles its day-to-day activities, business strategy and investments. Lately, his primary focus revolves around LitFin SICAV, a recently established fully-regulated fund, perhaps the first of its kind within the EU area focused on the litigation finance industry. In 2019, Maros was honored as part of Forbes' 30 Under 30, a testament to his entrepreneurial skills and influence in the business world. Furthermore, Maros is a Chambers-ranked individual for 2023 in the EU. Maros' education includes graduating with distinction in law, which he studied in Manchester (the UK) and Lund (Sweden). His international educational background has played a crucial role in shaping his career and business strategies. In addition to his professional accomplishments, Maros enjoys a variety of personal interests. He is known for his love of swimming and traveling, however, most of all he cherishes spending weekends at his countryside mansion nestled in the hills, where he can relax and unwind from his busy work schedule. Company Name and Description: LitFin Capital Company Website: https://litfin.capital/ Year Founded:  2018 Headquarters:  Prague, Czech Republic Area of Focus:  LitFin is a European complex litigation funder with a special focus on funding follow-on cases related to the private enforcement of damages within the realms of EU competition law. Member Quote: "Our mission is to use litigation funding in order to help injured individuals, companies, insolvency dispute stakeholders, and others to achieve justice, and provide our investors with outstanding returns. From the position of the pioneer in the region, LitFin shortly became one of the most considerable players in the EU funding space. We partner with investors who aim to diversify their investment portfolios while promoting positive social impact, as well as with law firms, which benefit from the potential to offer their clients alternative fee arrangements while minimizing associated risks."
Announcements Consumer

Legal-Bay Legal Funding Announces Dedication to Legal Malpractice Case Funding

Legal-Bay LLC, The Lawsuit Pre-Settlement Funding Company, announced today that they have expanded their branch dedicated to various types of Legal Malpractice Cases. As an industry leader in legal funding and lawsuit funding with various types of lawsuits, Legal-Bay is one of the go-to funders in the legal malpractice arena. This is due to the lawsuit settlement funding company's expertise and success in helping both law firms and clients obtain the resources they need to fight and win their cases. Most legal funding companies and lawsuit loan companies do not offer law suit cash advances on legal malpractice suits, mostly out of a desire to avoid commercial litigation and the complexities that come with it. However, Legal-Bay accepts these challenges with ease, knowing they employ an experienced underwriting and investment team that understands these cases well. With this knowledge comes the ability to get their clients the lawsuit cash advances they need now, regardless of how complex the case is in nature. Many legal malpractice claims arise when an attorney's decision, action, or misstep results in a loss for their client. These items can include various elements such as missing a statute of limitation filing date, not accepting a settlement agreement, or gross negligence of some kind. The client impacted by the event may then seek to recover said loss, by filing a legal malpractice lawsuit. Chris Janish, CEO of Legal-Bay, commented, "Too often, we encounter plaintiffs who've suffered grave consequences due to judiciary missteps on their lawyer's behalf. It is for this reason we are prioritizing these cases and giving them the attention—and capital—they deserve. If you are someone who's been impacted by lawyer misconduct or legal misconduct, please don't hesitate to contact Legal-Bay today, regardless if your legal malpractice claim has been denied by other lawsuit funding companies."  Legal-Bay considers themselves the best lawsuit funding company in the industry when it comes to this market. Commercial litigation cases can be tricky and very expensive to get approved, but with Legal-Bay's experienced team they are able to fund many of these cases for significant value. This not only includes plaintiff funding, but also case cost funding, and expert witness cost funding for legal malpractice cases. To learn more, or to apply for your legal malpractice pre-settlement cash advance or legal malpractice settlement cash advance now, please visit Legal-Bay's page dedicated solely to these types of cases, at: https://lawsuitssettlementfunding.com/legal-malpractice.php Legal-Bay's pre settlement funding programs are designed to provide immediate cash in advance of a plaintiff's anticipated monetary award. Anyone who has an existing legal malpractice lawsuit or thinks they might have a legal malpractice suit and needs cash now can apply. Due to the fact that the law suit loans don't need to be repaid unless you win your case, presettlement funding is a risk-free way to get some much-needed cash in your hands—sometimes within mere hours. Legal-Bay reminds plaintiffs that these lawsuit cash advances, lawsuit loans, or legal malpractice fundings are extremely beneficial in helping to cover expenses due to the malpractice or misconduct at hand. Legal-Bay also assists law firms with case cost expenses, trial cost expenses, or expert witness cost expenses to help lawyers prosecute commercial litigation or legal malpractice claims.  Legal Malpractice filings have been on the rise over the last few years. Legal-Bay believes the average settlement amount or value for legal malpractice is in the $175K area, however these amounts can be much higher or lower in the $100K range.  Legal-Bay typically receives inquiries from people asking for a lawsuit loan, loan on lawsuit, loan on settlement, loans on pre settlements, presettlement funding, settlement funding, legal funding, settlement cash advances, or how to get lawsuit money early. Legal-Bay reminds people that their cash advances are not a lawsuit loan, a loan on a pending lawsuit, a settlement loan, or a presettlement loan. They are simply pre-settlement cash advances that one only has to pay back if they win their case. If a client loses their case, there is absolutely no recourse. To apply right now for the quick approval process on your legal malpractice funding request, please call Legal-Bay's 24-hour hotline at 877.571.0405 or visit: https://lawsuitssettlementfunding.com/legal-malpractice.php
Commercial Legal Innovation

BusinessToday Names Top 10 Most Influential UK Litigation Funding Lawyers

A recent feature from BusinessToday examines the UK litigation funding market, putting the spotlight on those individuals whose expertise facilitate these funding deals and work to reach successful resolutions for their clients. The article lists 10 of the leading professionals in the UK industry, with the list considering these lawyers’ ‘backgrounds, achievements, and distinctive qualities.’ The 2023 list includes the following individuals:
  • Steven Friel, CEO, Woodsford
  • Timothy Mayer, senior investment manager, Litigation Capital Management
  • Harshiv Thakerar, chief investment officer, Asertis
  • Ayse Yazir ACII, global head of origination, Bench Walk Advisors
  • Ian Madej, founder and CEO, Asertis
  • Tets Ishikawa, managing director, LionFish
  • Adrian Chopin, managing director, Bench Walk Advisors
  • Louis Young, co-founder, Augusta Ventures
  • Roberth Rothkopf, managing partner, Balance Legal Capital
  • Charlie Morris, chief investment officer, Woodsford
BusinessToday concludes its list by stating that the growth of the UK litigation funding market ‘owes much to the innovative work of these highly experienced and accomplished lawyers.’
Case Developments Commercial

US Judge Grants Argentina a Delay in Enforcement for $16.1 Billion Award in YPF Case

The multi-billion dollar award in the YPF case has been one of the biggest stories involving litigation funding in 2023, with Burford Capital looking to recoup impressive returns from its investment, while the Argentine government continues in its efforts to delay or avoid paying the massive sum.  An article from Bloomberg and shared by Yahoo Finance provides an update on the case of Petersen Energia Inversora SAU. v. Argentine Republic, as US District Judge Loretta Preska has granted Argentina a short delay in the enforcement of the $16.1 billion award. Argentina is still appealing the award and Preska has ordered Argentina to ‘seek expedited consideration from the higher court, the Second US Circuit Court of Appeals in Manhattan.’ Preska agreed to a suspension of enforcement without an appeal bond until 5 December, on the condition that Argentina pledges its 51% equity interest in YPF and receivables connected to the Yacyretá Dam, which was jointly built by Argentina and Paraguay. The equity stake in YPF is reportedly valued between $2.35 billion and $3.05 billion, whilst payments from Paraguay for the damn could provide another $2 billion, if securitized.  Burford Capital, who funded the YPF lawsuit, could be set to receive up to $6.2 billion from the award.
Case Developments Commercial

CAT Certifies Woodsford-Funded Opt-Out Claim Against Playstation

In the months following the UK Supreme Court’s PACCAR decision, industry observers have been patiently waiting to see how the courts’ handling of group actions would be affected. Today’s decision from the Competition Appeal Tribunal (CAT) certifying a funded opt-out claim will likely be viewed as a major victory for UK funders in the post-PACCAR world. An article from CDR covers the news that the CAT has certified the opt-out claim brought against Playstation, which focuses on allegations that the video gaming company unlawfully overcharged consumers for its digital products on the Playstation store. Alex Neil, the class representative for the claim, stated that the CAT’s decision to certify the claim was “the first step in ensuring consumers get back what they’re owed as a result of Sony breaking the law.” The CAT’s decision has added significance, as this class action is being funded by Woodsford and is the first claim of its kind to receive full certification following the Supreme Court’s PACCAR ruling. Sony had objected to the claim being certified, citing both the nature of the third-party funding for the case and the merits of the claim being brought against them. Milberg London’s Natasha Pearman, who is representing the claimants, said that they hoped “the certification of our claim provides some clarity as to acceptable litigation funding agreements in the post-PACCAR environment for opt-out claims.” Pearman used the decision to highlight the fact that “litigation funding is integral to the collective action regime”, and emphasised that these funded claims “provide a route to accessing justice that simply doesn’t exist otherwise.” Charlie Morris, chief investment officer at Woodsford, celebrated the CAT’s decision to certify the claim in the wake of the PACCAR ruling, and decried Sony’s attempts to “advance numerous unmeritorious and opportunistic arguments, all of which unsurprisingly failed.” In a warning shot to other defendants looking to exploit the Supreme Court’s ruling on litigation funding, Morris suggested that they should “resolve meritorious actions in a speedy and cost-efficient way rather than spending millions on spurious and ultimately unsuccessful satellite disputes aimed solely at stymying access to justice.”
Announcements Commercial Fundraising

Armadillo Litigation Funding Announces Additional $250 Million in Lending Capacity

Armadillo Litigation Funding, LLC (together with its affiliates, "Armadillo") is pleased to announce that it has secured an additional $250 million in lending capacity. This $250 million, when combined with Armadillo's existing lending capacity, brings Armadillo's total available lending capacity to over $630 million. In March 2022, Armadillo announced that it had raised $750 million of which $446 million has been deployed in 20 loans, not including an additional $150 million in Armadillo led third party syndications. Nick Johnson, Armadillo's Founder and CEO, said, "This additional $250 million demonstrates the market's continued confidence in Armadillo and its ability to successfully invest capital in the law firm lending space. We are excited to begin deploying this capital, and any other new capital commitments, with leading U.S. plaintiff law firms including new borrowers." Armadillo is targeting another $250 million in additional lending capacity in 2024. Armadillo believes that this anticipated new capital, along with the recently secured $250 million, will enable it to continue to deploy capital well into 2025 and beyond. About Armadillo Litigation Funding Armadillo Litigation Funding provides financing to US law firms participating in mass tort, consumer, and commercial litigation, law firm service providers and commercial claims through a UK funding partner. Armadillo offers general obligation loans secured by the borrowers' interests in current and future awards including, but not limited to, contingent fees. Armadillo's targeted loan size is generally $10 million to $100 million per individual client.