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Announcements Commercial Deals

LionFish Announces Acquisition by Funds Managed by Foresight Group

Funds managed by Foresight Group (“Foresight”), a leading, listed, sustainability-led alternative asset investment manager with £12 billion* of assets under management, have completed the acquisition of LionFish Litigation Finance Limited (“LionFish”) from AIM-listed professional services firm RBG Holdings Plc (“RBG”). LionFish was launched in May 2020 as a subsidiary of RBG. Built on strong principles and a solid operating infrastructure, LionFish quickly established its presence in the market and experienced rapid growth. To accommodate its growth, LionFish entered a co-investment arrangement with Foresight in February 2022. Intended to be the first of many, this coinvestment afforded LionFish the ability to expand its capital investment base and reduce its reliance on RBG’s balance sheet. In December 2022, RBG announced intentions to refocus on professional services and received several bids to acquire the LionFish business. Foresight’s bid was unique and stood out given its patient capital base, long-term commitment and alignment with LionFish’s ambitions and investment thesis. Foresight’s acquisition will provide LionFish with the stability and support to leverage its team, its principal investment model, and its operational efficiency. Operationally, LionFish will remain an independent company run by management team Tets Ishikawa and Tanya Lansky, with general oversight from a soon to be announced and newly appointed board. Its existing transactions will continue to be honoured and capital for new investments made available immediately. Tets Ishikawa, Managing Director of LionFish, said: “We would like to thank RBG Holdings Plc for their support in launching LionFish. Although we had originally envisaged the partnership to last for many years, the lessons we learnt together and RBG’s decision to refocus on professional services has given us the opportunity to find a more suitable, long-term and exciting partner. Tanya and I would like to thank both RBG and Foresight for making this transaction possible.” Oliver Bates, Senior Private Debt Manager at Foresight, added: “We have followed the litigation finance market for several years and we have always been impressed by LionFish’s model and commercial approach. Having followed it closely over the last couple of years, it was always clear to us that Foresight could provide a stronger platform on which LionFish could fulfil its true potential. We are therefore delighted with this acquisition and are excited and confident that under our ownership, Tets, Tanya and the LionFish team will achieve their business ambitions.” Tanya Lansky, Managing Director of LionFish, comments: “Foresight’s deep and patient capital base, long-term commitment, and its understanding and support of our model made it stand out. Tets and I would like to thank Foresight for their faith and commitment in us and in our business. Notwithstanding the situation since last year, we have maintained a strong pipeline which we look forward to leveraging and continuing to grow in this exciting next chapter.”

ABOUT FORESIGHT GROUP

Foresight Group was founded in 1984 and is a leading listed infrastructure and private equity investment manager. With a long-established focus on ESG and sustainability-led strategies, it aims to provide attractive returns to its institutional and private investors from hard-to-access private markets. Foresight manages over 400 infrastructure assets with a focus on solar and onshore wind assets, bioenergy and waste, as well as renewable energy enabling projects, energy efficiency management solutions, social and core infrastructure projects and sustainable forestry assets. Its private equity team manages eleven regionally focused investment funds across the UK and an SME impact fund supporting Irish SMEs. This team reviews over 2,500 business plans each year and currently supports more than 250 investments in SMEs. Foresight Capital Management manages four strategies across seven investment vehicles. Foresight operates in eight countries across Europe, Australia and United States with AUM of £12 billion*. Foresight Group Holdings Limited listed on the Main Market of the London Stock Exchange in February 2021. https://www.foresightgroup.eu/shareholders

ABOUT LIONFISH LITIGATION FINANCE LIMITED

LionFish is a market-leading litigation funder, providing efficient, effective financing solutions to high value dispute assets. www.lflf.co.uk
Announcements Commercial Fundraising

Aristata Capital Completes Final Closing of Impact Litigation Fund Dedicated to Driving Positive Social and Environmental Change

Aristata Capital is pleased to announce that it has secured nearly £52 million of capital at final closing for its first impact litigation fund, Aristata Impact Litigation Fund I LP (AILF I). Aristata is a pioneer in the field of social and environmental litigation, bringing an impact investing lens to commercial litigation funding to seek attractive, uncorrelated financial returns while delivering positive, systemic social and environmental change. Aristata offers the first truly blended approach to litigation funding allowing investors to combine both the commercial rigour of traditional litigation funding methodologies and the success of public interest litigation strategies to drive social and environmental change. Aristata is building a global portfolio of claims covering areas including human rights, environmental protection, climate change, equality, indigenous rights, access to justice and a range of other critical cause areas. Aristata Capital’s first fund is anchored by Capricorn Investment Group’s Sustainable Investors Fund and The Soros Economic Development Fund. LPs include foundations, impact fund-of-funds, family offices in the US, UK, Europe, and Australia, as well as a number of high net worth individuals. “Aristata is proud to launch the first impact commercial litigation fund, and to have exceeded our fundraising target in a challenging market. The claims we are seeing and supporting demonstrate the need for funders focused on driving positive social and environmental impact - we want to close the justice gap in commercial litigation, where the system favours commercial strength and penalises those without.” said Rob Ryan, CEO of Aristata Capital. “We are proving that investors don’t have to choose between achieving financial returns and driving social and environmental impact”. “Since 2000, Capricorn has backed multiple new partnerships focused on specific areas of impact or sustainability, such as renewable energy infrastructure, clean technology, health and wellness, financial inclusion, and sustainable asset management.” Said Eric Techel, Partner at Capricorn. “Aristata is a great fit with this strategy, and we are excited to support the team as it builds the platform and establishes the funding of commercial litigation, with positive and measurable social impact, as an asset class.” Aristata seeks to create a safer and more equitable world by financing legal cases that empower historically marginalised voices, equalize unjust power dynamics and catalyse systemic change that protects the environment and communities. Aristata investments seek to secure compensation for individuals and communities and other entities affected by damaging commercial activity, to unlock the impact potential of similar cases to provide scalability and to generate successful legal outcomes that pressure corporations and industries to change behaviour. “We are delighted to partner with Aristata on this first of its kind impact litigation,” said Georgia Levenson Keohane, CEO of the Soros Economic Development Fund.  “This investment marries Open Society’s longstanding commitment to strategic litigation with innovative finance, as we test how private sector resources can enhance accountability on human rights and environmental protections.” Aristata operates in markets across the globe, sourcing claims from law firms and civil society wherever corporate activity causes harm. Aristata’s experienced litigation funding team is supported by an Investment Committee made up of experienced legal professionals and an Impact Advisory Board of international thought leaders across a diversified range of cause areas. About Our Investors: Capricorn Investment Group is one of the largest mission-aligned firms in the world and has since its inception in 2000 grown to manage more than $9 billion in multi-asset class portfolios for institutional investors through their range of impact-focused strategies. Their Sustainable Investors Fund (SIF) is a private equity partnership whose investment objective is to create significant value through ownership and early-stage investment in public and private asset managers who incorporate sustainability as a key driver of investment returns. The firm has offices in New York City and Palo Alto and was born from a belief that sustainable investment practices can enhance risk-adjusted returns. Underlying this investment approach is a deep desire to demonstrate the huge investment potential that resides in breakthrough commercial solutions to the world’s most pressing problems. The Soros Economic Development Fund (SEDF) is the impact investing arm of the Open Society Foundations (OSF).  Founded in 1997, SEDF has committed over $500 million to support Open Society’s commitments to democracy, human rights and social justice across the globe.
Commercial Legal Innovation

The Secondary Market’s Role in the Future of Litigation Funding

The future growth and potential scope of the litigation finance market is often discussed in the context of specific sectors or geographic markets in which third-party funding could see increased adoption. However, an important dimension that is on the mind of many industry leaders is the potential for a strong secondary market to take shape, which could act as a catalyst for further growth. In an article for Sentry Funding, Rachel Rothwell examines how a secondary market could transform litigation funding into ‘a well-established asset class’, providing benefits for funders, law firms, and their clients. Rothwell points out that this development would be a key step for investors by offering an alternative exit route without waiting for litigation to reach a conclusion, whilst also improving the levels of liquidity available for funders to access. Rothwell also suggests that a mature secondary market would provide avenues for new types of investors to engage with litigation finance, as it could alleviate the concerns of those investors who recoil at the excessively long durations that initial investors in litigation must endure. This is also a benefit for those investors who are more hesitant about engaging in litigation funding before a case has begun, when despite the normal levels of due diligence being applied, there are significantly more unknowns about the outcome. Rothwell references comments from leading funders at ILFA’s European Conference who broadly expressed support and suggested that the foundations for a real secondary market are already emerging. However, Rothwell also highlighted concerns raised by Christopher Bogart, chief executive of Burford Capital, who emphasised the need for funders to ensure that legal privilege and confidentiality are maintained in any such secondary market where funders are discussing ongoing cases with secondary buyers or investors.
Commercial People Moves

Deminor Expands into Scandinavia with Appointment of Mats Geijer

2023 continues to be a strong growth year for the market’s leading litigation funders, as the established industry names continue to record impressive results and grow their footprints in target locations. Continuing this trend, Deminor has announced its expansion into the Nordic region, opening its first office in Stockholm and appointing Mats Geijer as Counsel Scandinavia, leading Deminor’s funding activities across Sweden, Norway, Denmark, and Finland. Geijer joins Deminor from Therium in Sweden, where he acted as Investment Manager from 2019, having previously served as Managing Director at Mainpro AB.  In the announcement, Deminor’s chief investment officer, Charles Demoulin highlighted the skills and experience that Geijer would bring to the funder’s Nordic operations: “Mats arrives at Deminor with the combined expertise of being both a Swedish legal expert and an experienced litigation funder. Having worked on a broad range of domestic and multi-national disputes with a particular focus on management liability, post-M&A-litigation and insurance disputes, we have confidence in his ability to strengthen our position as a leading litigation funder on the European market.” Geijer also expressed his enthusiasm on joining Deminor and continuing to expand the presence of litigation financing in the Nordic region: “I am happy to join one of the oldest and most recognised players in the field. Litigation funding is now at a mature state in Scandinavia, so it’s a perfect match. I look forward to promoting the benefits of third-party funding and especially the opportunities Deminor has to offer in the Swedish, Norwegian, Danish and Finnish markets.”
Commercial Legal Innovation

Using Litigation Funding to Create a Mutually Beneficial Relationship Between In-House and Outside Counsel

The benefits of litigation funding are often discussed in singular terms, such as how outside capital can benefit a corporate legal department or how it can act as a powerful tool for law firms. However, it is also important to consider how third-party funders can benefit multiple parties at once and create a more mutually beneficial relationship between client and law firm. An insights article by Ryan Schultz, vice president of business development at Woodsford, highlights a 2022 survey from the Association of Corporate Counsel that indicated legal departments have faced up to a 20% reduction in their budgets. Coupled with the lengthy timelines for litigation, Schultz argues for a more holistic approach which could allow litigation funders to bridge the gap between these two parties to support a strong litigation strategy. Schultz offers the example of a client with a limited budget bringing a matter to outside counsel, who feel pressured to either offer a painfully high discount on their services or refuse the matter. In such a situation, Schultz suggests that a funder’s provision of capital can both ensure that the in-house counsel are able to select their firm of choice, whilst allowing that outside counsel to still take on the matter without negatively impacting their own firm’s financials. Looking beyond the pure financial benefits, Schultz points out that by providing the capital required, a funder can preemptively dispel any tensions that may arise between in-house and outside counsel over the cost or discount of the legal services provided. For law firms, this has the added benefit of allowing their litigation teams to pursue clients that ordinarily wouldn’t be able to afford such high legal fees, thereby further buttressing the firm’s revenue streams.
Case Developments Commercial

Law Firm Backed by Funder Pledges to Donate Portion of Fees to Charity

Litigation funding is useful for both claimants and law firms who wish to offset the financial cost and associated risks of pursuing meritorious lawsuits. However, it can also provide added benefits for, as illustrated by a new set of claims in the UK where the funded law firm has stated its intention to donate part of its fees to charity. Reporting by Charity Today reveals the rather unique situation in which law firm Harcus Parker has stated its intention to donate a portion of its fees to charities, should the claims reach a successful resolution. The claims are being brought on behalf of energy customers who were allegedly saddled with inflated bills, as utility companies allegedly added broker fees to the unit cost for non-domestic energy consumers. Harcus Parker is able to pursue this plan to donate a percentage of fees to charity, partly because the firm has received over £10 million in litigation funding, which has allowed it to offer claimants its services on a no-win no-fee basis. Damon Parker, senior partner at the law firm, stated: “For many of these organizations and their dependents, the high price of energy has had particularly detrimental effects. With this in mind, we thought it would be appropriate to give part of our fees to charities.” Harcus Parker has selected 10 charities that the funds would go towards, which include Mummy’s Star, The Loss Foundation, and Support Through Court. Damon Parker explained that if the claims are as successful as they expect, the firm is “confident each charity will receive a six-figure sum.”
Consumer

Missouri Governor Mike Parson signs comprehensive legislation regulating Consumer Legal Funding

Missouri Governor Michael Parson signed an omnibus bill, SB 103, containing sweeping new regulations for the growing industry of consumer legal funding—bringing meaningful oversight of provider companies for the first time in the state’s history. Missouri now joins several states, like Oklahoma, Nebraska, Ohio, Utah, Nevada, Vermont, Tennessee, Indiana, and Maine, who have acted to enact consumer protections while preserving consumer choice. Consumer legal funding—also known as pre-settlement funding—is a specialty financial service that allows plaintiffs pursuing a legal claim to sell part of the potential proceeds of the claim for cash now. Unlike a loan, there is no obligation to the funding company if the consumer does not have a successful outcome in their claim. And because it's the sale of an asset, it can't affect a person's credit or put them into collections. This legislation ensured that it will be treated as a consumer asset. “Consumer legal funding is a financial lifeline to those engaged in civil litigation who lack savings. Governor Parson giving his approval to this legislation is a win for robust consumer protections and protecting access to legal funding in Missouri.” Stated Missouri State Representative Phil Christofanelli Missouri State Senator Sandy Crawford stated "I am pleased that we were finally able to take the Consumer Legal Funding legislation across the finish line. Although this process has taken several years, I am confident the finished product was worth the time it took. I was happy to play a role in passing this important legislation." “Consumer legal funding is different from a lot of other financial products. It allows a consumer to get the financial assistance they need while their claim is making its way through the legal system.” said Eric Schuller, President Alliance for Responsible Consumer Legal Funding, the Trade Association that represents the companies that offer Consumer Legal Funding. Missouri State Senator Curtis Trent stated: “I appreciate the Governor’s support. This measure will ensure that Missourians have better access to the financial resources they need to protect their rights in Court.” Schuller said, “this is some of the most well-researched legislation we’ve seen come out in the last few years. It’s sure to serve as a model for other states in the years to come. This is good lawmaking in action—a trend which should continue.”
Commercial Regulatory Issues

California Business Owner Highlights How Litigation Funding Saved His Company

Calls for an increase in the levels of regulation and oversight of litigation finance across the United States have intensified in recent months, with states throughout the country introducing or passing legislation to enact stricter guidelines. However, in California where the proposed legislation has been put on hold for now, one business owner explains how third-party funding provided an invaluable lifeline for his business. An article in the San Fernando Valley Business Journal provides an account from Craig Underwood of Underwood Ranches, whose jalapeno pepper business had almost failed after a lengthy and costly dispute with a hot sauce manufacturer, Huy Fong Foods Inc. Viewers of the 60 Minutes piece on the Litigation Finance industry will remember the coverage of this case, which LFJ covered back in December of 2022.  A protracted lawsuit that began in 2017 saw Underwood awarded $23.3 million by a jury, only to be stymied by an appeal from Huy Fong. It was at this point where Underwood engaged Burford Capital for a $4 million loan that allowed the business to keep operating and fight the appeal, which resulted in the Second Appellate District Court affirming the award. Whilst Burford Capital doubled its money, taking $8 million from the final award, Underwood emphasized the vital role that the funder played in keeping his small business alive, and continues to argue against the proposed regulation in the California legislature. Underwood particularly opposes the disclosure requirements for plaintiffs using litigation funding, as it can disadvantage them against larger and wealthier defendants, stating that ““I wouldn’t want our opposition to know the position that we were in.” Andrew Cohen, director at Burford, explained the funder’s perspective on the case and why its return was so high, emphasizing that “there were real risks in the case,” and once due diligence had been completed, Burford had “negotiated terms with Craig based on that assessment.” Cohen echoed Underwood’s opposition to these enhanced regulatory measures, and pointed out that most arguments against litigation funding “are usually being put forth by folks who are upset that legal finance helps claimants get the result that they should be able to get.”
Case Developments Commercial

Defendants Request More Information as Sysco Moves to Make Burford Affiliate the Plaintiff in Antitrust Lawsuits

Although last week seemed to put the dispute between Burford Capital and Sysco Corp to bed, with both firms agreeing to drop all claims, it seems there may yet be another twist before the story reaches its end. Following Sysco’s resolution with Burford, the company had requested to transfer ownership of several antitrust claims to a Burford affiliate; a move which is now being questioned by more than one of the defendants. An article in Bloomberg Law provides an update on the ongoing saga that has kept Burford’s name in the headlines, as defendants including Tyson Fresh Meats Inc, JBS USA Food Co., and Triumph Foods stated that the proposed move by Sysco to substitute Carina Ventures LLC as the plaintiff needed more inspection. The defendants for the antitrust lawsuits have told the federal court that before the case can move forward, they require more information about this transfer of ownership, with Triumph Foods stating that Burford’s role is “shrouded in mystery.” Judge John F. Docherty in Minnesota has informed all parties that he will review Sysco’s plan to place two of the lawsuits under Carina Ventures’ ownership and hold hearings on the matter. Boies Schiller Flexner, the law firm that had originally represented Sysco until the dispute broke out with Burford, is set to return to lead the cases and represent Carina Ventures in the lawsuits.