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Consumer

Don’t Expect Missouri to Cap Rates on Funding Any Time Soon

Consumer Legal Funding has been a hot-button issue in Missouri for some time. There has been some concern from industry participants that Missouri may go the way of West Virginia and effectively ban the industry, but it is doubtful the legislature will take up the issue of capping rates on funding transactions in the next legislative session. According to the St. Louis Record, the Missouri Chamber of Commerce is expressing doubts that the issue of whether to classify consumer legal funding as a loan or investment - and whether the practice should be subject to state usury laws - will make it onto the coming legislative agenda. As an industry opponent, the Chamber is pushing for consumer legal funding to be classified as a loan, and therefore subject to state usury laws which mandate a cap on interest rates. Yet industry proponents like Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC) argue that the non-recourse nature of consumer legal funding transactions indicate they are investments, not loans. As such, funding rates should not be capped. Schuller points to West Virginia as an example where the state legislature capped interest rates on funding agreements at 18%. The industry, which operates on a 15-20% profit margin, completely disappeared from the state. Now many West Virginians in desperate need of money while they await their trial have no choice but to settle for a lowball offer from their insurance company. Schuller claims his industry is willing to work with legislatures to provide effective oversight. He cites Oklahoma as an example, where the industry partnered with regulators to enact a bill that included rate disclosure and notice provisions. Certainly, some additional transparency couldn't hurt, but prohibiting an entire industry from operating in a given state - thus limiting the options of the state's citizens - can't be the answer. Fortunately, Missourians won't likely have to face this prospect - not yet, anyway.
Announcements Commercial

Former Boies Schiller Flexner Lawyers Launch Premier Litigation Boutique Roche Cyrulnik Freedman LLP

NEW YORK, Jan. 15, 2020 /PRNewswire/ -- Kyle Roche, Jason Cyrulnik and Vel Freedman today announced the launch of a premier litigation boutique, Roche Cyrulnik Freedman LLP (RCF) (www.rcfllp.com). RCF's 12 former Boies Schiller Flexner litigators, including two equity partners, represent the first breakaway firm from Boies Schiller Flexner LLP since that firm's inception in 1997. RCF opens its doors with 15 lawyers from top law firms that include Boies Schiller; Paul, Weiss; Robbins Geller; and another major, New York-based law firm. The RCF team brings a breadth of experience leading high-stakes litigation for both plaintiffs and defendants in class actions, securities litigation, and many other complex commercial disputes. The New York and Miami-based firm aims to disrupt the big-law model through its approach to clients, cases and its own lawyers. "In today's fast-paced and dynamic global environment, clients require innovative and tech-savvy legal counsel to help resolve high-stakes business disputes. We are building a unique, forward thinking firm that can keep pace with that change," said Kyle Roche, one of the founding partners. "Our firm combines high-stakes plaintiffs' work with a strong base of bet-the-company defense work to help clients tackle a wide array of complex and challenging matters," said Jason Cyrulnik, a former Boies Schiller equity partner and one of RCF's founding partners. RCF is handling cases in burgeoning areas of the law like cryptocurrency and cannabis litigation.  The firm is handling two of the largest cryptocurrency disputes ever brought pursuing both a multibillion-dollar dispute over stolen bitcoin in Florida and another multibillion-dollar class action against the companies and individuals accused of manipulating the price of Bitcoin. RCF has already implemented innovative funding solutions, including flat-fee, success-based offerings, defense-side contingency matters, equity in start-ups, plaintiff-side contingency cases, litigation funding, and hybrid cases that are part hourly and part contingency.  RCF has strong relationships with litigation funders and leverages those relationships to help clients get the best results and to align incentives for clients and the firm. RCF also has a strong commitment to transparency to its own lawyers. It has a developed a compensation model that downplays the value of equity in place of offering above-market rewards to lawyers at all seniority levels for their business generation, their litigation talent, and their commitment to achieving efficiency and results for the benefit of the firm's clients. Vel Freedman, also from Boies Schiller, and one of the firm's co-chairs , added, "we attracted top talent by bringing in the type of cases lawyers aspire to handle, and will retain that talent and grow our practice by both fairly and transparently rewarding our lawyers and delivering real results to our clients." "We're aiming for the best way to run a new law firm," said Ted Normand, a former equity partner at Boies Schiller who will also serve as RCF's other co-chair. "If you're bright and entrepreneurial, Roche Cyrulnik Freedman is where you want to work." RCF launches with a hand-picked group of lawyers from Boies and other litigation firms, including: RCF Partners
  • Jason Cyrulnik (Boies Schiller)
  • Joseph Delich (Paul Weiss)
  • Katherine Eskovitz (Boies Schiller)
  • Paul Fattaruso (Boies Schiller)
  • Vel Freedman (Boies Schiller)
  • Amos Friedland (Boies Schiller)
  • Nathan Holcomb (Boies Schiller)
  • Ted Normand (Boies Schiller)
  • Kyle Roche (Boies Schiller)
RCF Counsel
  • William Dzurilla (Boies Schiller)
  • Constantine Economides (Robbins Geller)
RCF Associates
  • Richard Cipolla
  • Stephen Lagos (Boies Schiller)
  • Alex Potter (Boies Schiller)
  • Stephanie Scutti (Boies Schiller)
RCF expects to continue its growth in 2020 by offering partner compensation that rewards significantly above market for business generation and provides above-market associate compensation, including participation in the firm's exciting contingency upside. The firm also offers true flexibility for highly qualified lawyers who wish to maintain work-life balance. The firm's offices are located at: 99 Park Ave, New York, New York and 200 South Biscayne Boulevard, Suite 5500, Miami, Florida. SOURCE Roche Cyrulnik Freedman LLP

Related Links

http://www.rcfllp.com
Announcements Consumer

Baker Street Funding Announces Lawsuit Loans At All Time High

NEW YORK (PRWEB) JANUARY 15, 2020: Baker Street Funding is a legal funding firm located in New York City that specializes in providing plaintiffs and attorneys with pre and post-settlement funding. The driving force behind this organization is Daniel DiGiaimo, the CEO and President. Mr. DiGiaimo has an impressive back-ground in financial services and previously worked at Morgan Stanley, Merrill Lynch and Oppenheimer & Co. Holding a minor in Law and a BA in Finance from PACE University, Mr. DiGiaimo manages all funding decisions and is responsible for the success of the company.

Baker Street Funding is not your regular litigation funding company and their unique ability to diversify risk and foster strategic partnerships with major players within the legal funding industry, sets them apart from the competition.

Baker Street Funding is extremely well-capitalized and can deliver quick financing decisions to help attorneys and their clients focus on what matters most. Their staff of experienced litigators is well aware of how litigation and arbitration process work. They understand the pressure that clients can be under during high stakes arbitration and they are helping them with timely financial support and guidance to get the most out of their claim. They have helped thousands of Americans obtain the best settlement funding solutions and have provided those clients with a total of $50 million in funding in the past year alone. Plaintiffs and their attorneys can enjoy flexible terms at the lowest rates. When it comes to litigation funding, no one is better.

At Baker Street Funding, each and every person is treated with dignity and respect and not just like another case. They focus on providing their clients with a lawsuit cash advance on the future proceeds of their pending settlements. The process takes as little as 24 hours from the moment when they receive a copy of the case documents to the moment of wiring out the funds.

Although third-party litigation funding is quite a new phenomenon in the United States, it managed to take off quickly and become an important part of the legal landscape. “Our plaintiff funding business, where we provide personal injury plaintiffs with liquidity, in order for principal and a set rate of return to be paid upon successful settlement of their claim, has grown enormously in the past two years. We only work with a fraction of personal injury plaintiffs nationwide and if the economy takes a turn for the worse, there will be more plaintiffs in need of immediate capital. Investors see that as a great compliment to a portfolio of domestic equities and fixed in-come. As far as the importance to plaintiffs and counsel, quite simply the liquidity that we provide allows the plaintiff to continue to fight for a settlement that they deserve. It is a well-known tactic of insurers to drag out cases as long as possible in order to force the plaintiff into taking a smaller settlement. We help even the playing field.”, said Daniel DiGiaimo, CEO of Baker Street Funding.

Baker Street Funding is America’s no.1 preferred pre-settlement funding firm and considered one of the best pre-settlement funding companies nationwide. A settlement advance is also known as a non-recourse financing agreement, which means that if the client loses the case, he or she is not obliged to pay the company back. Baker Street Funding provides immediately available cash to customers they believe they have strong enough cases to win and pay back. Clients who choose them for litigation funding can enjoy a series of benefits such as no credit check, no job required, fast approval and funding, no risk, and contracts that advance from as little as $1,500 to $5 million or more.

At Baker Street Funding, many types of cases are considered. They list a number of case types on their website that they have funded previously but are always looking for new and interesting cases. Typically, they offer services such as personal injury pre-settlement funding, post-settlement funding, lawsuit advances, settled case funding, case cost funding, litigation funding, disbursement funding, bundled settlement advances, surgery funding, malpractice pre-settlement funding, premises liability settlement funding, and more.

The team of professionals working at Baker Street Funding is committed to providing their customers with accurate real-time updates on their applications and to lend a compassionate ear in their time of need. They believe everyone deserves a better financial future and they are here to deliver more value to their clients’ lives.

Commercial Investor's Corner Slingshot Capital Special Features

Implications of Portfolio Financings on Litigation Finance Returns

The following article is the first in 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
  • Portfolio financings represent as much as 62% of all US commercial litigation finance investments
  • Strong growth trend for Law Firm and Corporate portfolios
  • Law firms recognize the inherent value in incubating portfolios
  • Not prevalent in non-contingent fee jurisdictions
Investor Insights
  • Potential effect of reducing overall investor returns relative to a portfolio of single case risks
  • Investors benefit from better risk-adjusted returns than single case investing
  • Cross-collateralized nature significantly reduces risk & shifts value to law firm
  • Portfolio financings may limit upside potential for investors
  • Review the portfolio composition (single vs. portfolio), past and future, to set return expectations.
One of the most significant trends in litigation finance for fund managers over the last few years has been the strong trend toward “portfolio financings”. Litigation finance can be broadly segmented between single case investments and portfolio financing investments. Single case is a reference to the provision of litigation finance to a single litigation, the outcome of which is completely dependent on the idiosyncratic case risk and binary litigation process risk.  Portfolio financing is a reference to the aggregation and cross-collateralization (typically) of a portfolio of cases, whether Law Firm or Corporate, whereby the results are determined by the performance of the portfolio as opposed to a single case. The trend has been so significant, that according to WestFleet’s 2019 Buyer’s Guide, Law Firm portfolio financings now account for 47% of capital commitments and Corporate portfolios account for 15% of commitments, for an aggregate of 62% of the commitments of the US industry. Why is Portfolio Financing Growing So Quickly? 
  1. The primary growth driver of portfolio financings is that the industry, arguably, started in the area of single case financings and is now evolving its offerings into a more complex and larger area of litigation finance. It is typical for an industry to begin with the financings of single exposures, and then as the industry gets more comfortable and gains deeper experience, it evolves into other larger applications like portfolio financing.
  2. The second driver is that as litigation funders have expanded their capital base, they have had to look further afield in terms of where they can effectively invest their capital at scale. To this end, portfolio financings are an ideal way for litigation funders to put large amounts of capital to work quickly and in a better risk-adjusted way than undertaking the laborious task of assembling a series of single case investments into a portfolio.
  3. One of the knocks against litigation finance is a low degree of capital deployment. Managers are motivated to reduce risk by slowly investing capital into the case in a measured way so as to mitigate loss of capital. Unfortunately, this negatively impacts the amount of capital they deploy and is inversely proportional to the effect their management fees have on returns. Portfolio financings, on the other hand, allow litigation funders to commit large amounts of capital and also expedite the deployment of capital, as they typically replace dollars that have been deployed (actual or notional) previously by the law firm. One could view a portfolio as a series of cases that have been ‘incubated’ by the law firm, and are now ready to be invested in by a litigation funder.
  4. Law firms have, astutely, come to realize there is value in (i) originating cases, arguably one of the most difficult and expensive services litigation funders provide, and (ii) applying modern portfolio theory to a series of cases and cross-collateralizing the pool, both to the benefit of the law firm. Progressive law firms married the new availability of large amounts of capital with the value inherent in their incubated portfolios and parlayed that into significant portfolio financings at a reasonable cost of capital, thereby capturing some of the economics for themselves.
  5. As awareness for litigation finance has grown throughout the legal community, awareness has also grown for plaintiff bar firms with large portfolios of cases. This market has also evolved and extended into corporate portfolios (LCM, an Australian litigation finance manager, is actively pursuing corporate portfolios). Accordingly, the increased awareness of the industry in general has also increased awareness for portfolio financing opportunities.
What Does it All Mean for Investors in the Asset Class? The following quote from Burford’s 2018 capital markets event sums it up nicely: “When we moved from single cases to portfolio investments, people wondered whether returns would decline, but they went up” This statement suggests that on a risk-adjusted basis, portfolio financings deliver superior outcomes. However, when you look at Burford’s return profile over a long period of time, you will see that relatively few single case investments contributed to their overall multiple of capital, with the Pedersen & Teinver claims being considerable contributors. In fact, the size of the gross dollar returns of these single case investments dwarfs the rest of the portfolio and skews the overall results. Burford makes the point in their disclosures that removing these outliers disrupts the core of their strategy, which is more akin to venture capital. As with all portfolios, one needs to assess the outliers. Yet having witnessed a large number of portfolio results, I would suggest the return profile of a portfolio is more aligned to the approach, strategy, size and nature of cases in which the manager has chosen to invest, as opposed to the notion that portfolio financings produce inherently superior results than investing in a cross-section of single cases. Some funders produce very consistent results in terms of returns and duration, whereas other strategies are more volatile; it just depends on what risk profile you are willing to accept (i.e. are you looking for venture capital or leveraged buy-out type returns). I think it is fair to say that the public domain lacks enough data to determine whether portfolio financings are better risk-adjusted returns than a diversified portfolio of single cases. However, when you consider that most portfolio financings are cross-collateralized, this single feature does have a significant impact on risk. The question then becomes how much return does the Law Firm or Corporation extract for delivering a fully originated portfolio with cross-collateralization features. I would expect that over a large portfolio of transactions, portfolio financings will outperform in terms of returns in relation to volatility, and that single cases will outperform in terms of returns, but at the expense of higher volatility. The other aspect that is difficult to control in comparing results of two sets of portfolios is whether the nature of the cases (case type, life cycle, jurisdiction, size, etc.) are common across the single case control group and the portfolio financings group. We may never know the answer, but logic dictates that portfolio financings should be lower returning, lower volatility investments, as compared to a portfolio of single cases – the key difference being the cross-collateralization feature. Investor Insights When reviewing fund manager results one should look closely at the composition of the portfolio to understand what portion is being derived from portfolios compared to single cases.  It will also be important to note the trending in these case types.  If the manager is scaling its operations, as many currently are, their motivations are to deploy large amounts of capital quickly in large portfolios with lower risk.  While this is a prudent approach for the manager, one then has to determine whether the historic return profile based on a portfolio of single case exposures is indicative of a future portfolio which will be mainly comprised of portfolio financings.  The portfolio financings will have a different risk-reward dynamic and so investors will need to model their return expectations accordingly.  Either way, I expect the return profile for litigation finance to remain robust both in the areas of single cases and portfolios and continue to believe that diversification is a key success factor to prudent investing in the commercial litigation finance asset class. Edward Truant is the founder of Slingshot Capital Inc. and an investor in the consumer and commercial litigation finance industry.
Consumer

Colorado Court Unseals Litigation Funding Agreement, Orders Mediation Between Parties

In List Interactive, Ltd. v. Knights of Columbus, Judge R. Brooke Jackson denied a motion to restrict public access to litigation funding agreements, finding that the content of the agreements are in the public interest. Judge Jackson confirmed that dollar amounts and specific terms may constitute trade secrets, but ruled that restricting access to the entire agreement is 'grossly overbroad.' As reported in Reason.com, consumer litigation funders Theano Ventures, LLC and Themistius Ventures, LLC, are claiming that they are entitled to a portion of funds deposited withe court. Yet the law firm in the case is claiming first lien position. The funders have argued that the law firm subordinated its position in a letter that was issued to the plaintiff. That letter, along with the litigation funding agreement, have been entered into evidence as Exhibits B and C, as part of an effort to compel arbitration in New York. The court has now found that those exhibits must be unsealed for the public to view. The underlying claim alleges that the funders breached Colorado state usury laws, which cap interest rates on loans at 45%. The effective interest rate of the funding is over 90%, according to the law firm, which cites Oasis Legal Fin. Group v. Coffman, 361 P.3d 400 (Colo. 2015). In that case, the Colorado Supreme Court asserted that loans from litigation funders are subject to the state's lending statutes (the court characterized these transactions as loans, despite Oasis' argument that their funding amounts to an investment). The plaintiff, all three of the plaintiff's counsel, and the litigation funders are claiming entitlement to the over $750,000 in funds on deposit at the court registry. The court is suggesting mediation, and currently awaiting response from the parties if that is an acceptable path forward.
Commercial

Litigation Funding in India is Growing

According to the Amendments to the Code of Civil Procedure, 1908, (Order XXV Rule 3), litigation funding in India is permissible, in that non-lawyers are not restricted from accepting remuneration upon a completed claim. With recent litigation funding partnerships in the engineering and construction sectors, it seems litigation funding in India is poised for growth. As reported in Mondaq, litigation in India is often costly and time-consuming. Many in the world's second-most populous nation have called for reforms to the justice system, chief among those is the continued expansion of litigation funding to provide access to justice. Currently, lawyers are restricted from taking cases on contingency, which limits the options for an impecunious plaintiff. As LFJ has reported, large construction firms like Hindustan Construction Company Limited and Patel Engineering have kicked off the litigation funding renaissance in India by assigning their claims to investors. Construction and engineering firms are ripe for funding, because many are at or near insolvency, and burdened by the prospect of excess litigation. And when the claims are against government entities (as is the case in the aforementioned examples), the prospect of a payout should the claims succeed is virtually guaranteed. Based on the above trends, it's likely we will see continued growth of litigation funding in the Indian market. How much growth and to what extent funding penetrates the total addressable litigation market in India is anyone's guess. But for now at least, India is certainly worth keeping an eye on.
Commercial

Should Lawyers Partnering with Funders Have Skin in the Game?

Among the chief concerns over the rise of litigation funding are the potential growth of frivolous lawsuits, and funder control over case decisions. While those worries haven't exactly panned out as many industry skeptics had imagined, they remain nagging concerns as the funding industry continues to expand with new entrants and capital sources. One unifying solution to both of these ethical problems is to mandate that lawyers who partner with litigation funders operate on success-based fee arrangements. As reported in Bloomberg Law, When funders compensate the law firm regardless of case outcome, incentives become mis-aligned, which can lead to dubious ethical practices. It stands to reason then, that forcing a lawyer to have 'skin in the game' when partnering with a funder solves many an ethical quandary. First, the prospect of a frivolous lawsuit grows far less likely, given that the attorney must operate on a contingency basis (of course, the funder is already operating on such a basis, which makes the likelihood of a funded frivolous suit extremely low in the first place). Secondly, if lawyers operate on success-based fee arrangements when partnering with funders, they are less likely to permit a funder to control case decisions, as that would conceivably impact their likelihood of success. The broader ethical debate around litigation funding has largely been resolved (the Chamber of Commerce's efforts notwithstanding). Yet nuts-and-bolts ethical questions still remain, and those must be addressed if litigation funding is to really become a mainstream asset class.
Announcements Commercial

Harbour Litigation Funding expands European team with hire of Theo Paeffgen

Theo Paeffgen joins Harbour Litigation Funding today as a Director of Litigation Funding focusing on Continental Europe. Prior to joining Harbour, Theo was Regional Managing Director (DACH) at Vannin Capital, having acted as CEO of FORIS, a German focused litigation funder.

Before moving into litigation funding, Theo qualified as German Rechtsanwalt and solicitor and advised clients in his practice for more than 20 years as well as worked in a number of senior corporate roles.

Theo is based in Harbour’s London office but will travel regularly to Europe to meet law firms and clients. Theo’s hire underscores Harbour’s commitment to growth and serving its clients across Europe.

Ellora MacPherson, Chief Investment Officer commented: “Theo joining the team is really exciting news. We have made investments in Continental Europe in the past and have a good network across the region, but Theo can help take us to the next level. It will allow us to build our relationships across the continent and create funding solutions to support our clients in their pursuit of justice.”

Theo added: “I am delighted to be joining Harbour. I look forward to building on Harbour’s already excellent reputation in Continental Europe and working with the team. I am excited to grow this already market leading litigation funder.”

Announcements Commercial

Delta Capital Partners Management LLC, Chicago-Based Litigation Finance Firm, Announces New Offices and Hires

CHICAGO, Jan. 8, 2020 --Delta Capital Partners Management LLC, a private equity and advisory firm specializing in litigation finance, today announced major milestones in its growth.

Christopher DeLise, Delta’s Managing Principal, CEO and CO-CIO, stated, “Delta has met its key business objectives for 2019 by hiring top-tier professionals, building out our geographic footprint, and joining forces with a top-tier global financial partner.  These developments have strengthened Delta’s AUM and the successful completion of recoveries for claimants, Delta and the firm’s investors. We look forward to continuing to provide world-class services to our investors and clients in 2020.”

Delta’s Geographic Reach and Team Expansion

In 2019, Delta increased its presence in several geographies where it had historically done business, by opening offices in Madrid, Prague, Warsaw and Hong Kong.

New Management Team Members 

Daniel Bond, Esq., Managing Director

Daniel Bond has been hired to lead Delta’s intake, evaluation, due diligence, and monitoring efforts to support new investment opportunities. Mr. Bond was previously a Partner at Kirkland Ellis LLP. Mr. Bond has had a 10+ year law firm career with extensive experience in the planning and management of commercial litigation and dispute resolution.

Since 2015, Mr. Bond has been named by Leading Lawyers as an “Emerging Lawyer in Illinois,” an honor given to the top 2% of lawyers who are 40 years old or younger or practicing law 10 years or less, who have proven themselves professional, ethical and experienced at an early point in their legal career.

Michael Makridakis, Esq., Managing Director – Asia, Australia and Offshore Jurisdictions

Michael Makridakis has been hired to lead Delta’s business in Asia, Australia, and in the Offshore Jurisdictions including the Cayman Islands, BVI and the Channel Islands. Mr. Makridakis works out of the firm’s Hong Kong office.

Prior to joining Delta, Mr. Makridakis was Managing Partner and Head of Dispute Resolution & Insolvency of the Hong-Kong office of Carey Olsen. Mr. Makridakis has a broad range of experience with investment funds, both offshore and domestically. Mr. Makridakis has worked extensively with distressed investment funds and has been a commercial litigator for over 15 years with extensive global litigation and arbitration expertise. Prior to launching the Hong-Kong office of Carey Olsen, Mr. Makridakis practiced law in the Cayman Islands, starting his career with Walkers Global in 2008.

Petr Malecek, Esq., Managing Director – Central & Eastern Europe

Petr Malecek has been hired to lead Delta’s business in Central and Eastern Europe. Mr. Malecek works out of the firm’s Warsaw and Prague offices. Mr. Malecek has over 20 years of experience advising corporate and sovereign entities on banking, finance and dispute-related matters in jurisdictions across Central and Eastern Europe and the Middle East.

Prior to joining Delta, Mr. Malecek co-founded a multi-disciplinary advisory practice where his areas of expertise included litigation management, dispute resolution, asset recovery, cross-border leveraged finance and the coordination of the company’s  advisors/practices and external contractors. Previously, Mr. Malecek was a Partner at CMS Cameron Mckenna and ran the banking and finance practices in Warsaw and Kyiv during that time.

Joseph Drozd, Jr., Director – Strategic Initiatives & Investor Relations

Joseph Drozd brings over ten years of experience in investment management and specializes in fundraising and managing a fund’s entire investment process. Before joining Delta, Mr. Drozd was the director of strategy and marketing with a major Chicago-based investment management company.    Joe formerly was a portfolio manager and director of research for a multi-family office in Chicago and previously worked in the alternatives group at Mercer Investments.

Jennifer Conley, Director – Marketing & Communications

Jennifer Conley has been hired to lead Delta’s marketing and communications efforts. Ms. Conley has worked in marketing and business development across the legal and financial services industries for over 13 years. Ms. Conley is responsible for developing marketing and branding strategies, client pitches and proposals, social media initiatives, competitive intelligence research, national conference sponsorships, and client socials.  Prior to joining Delta, Ms. Conley was a Global Practice Development Manager at Winston & Strawn and focused on practice and client development initiatives for the firm.

In addition to the new management team members noted above, Delta also hired several support, finance, accounting, and legal professionals during 2019, including: Daniel Noonan, Alon Polischuk, and Erin Bishop, Esq.

Delta’s Institutional Financial Partner in 2019

In May 2019, Delta entered a joint venture with a prominent Chicago-based asset manager that has made more than 60 investments since 2007.  The firm has had commitments and deployments of over $5 billion since inception and has an AUM of $9 billion.  The firm manages funds with a variety of investment strategies, including private equity, venture capital, specialty financing, distressed bond and credit alternatives, and has invested extensively in litigation finance over the last decade.

About Delta Capital Partners Management LLC

Delta Capital Partners Management LLC is a US-based private equity and advisory firm specializing in litigation finance, judgment enforcement, asset recovery and related strategies serving claimants, law firms and other professional service firms, and businesses across the globe. The firm provides capital and expertise that enables their clients to de-risk, focus on their core businesses, and significantly enhance the probability of a successful and timely resolution of their and/or their clients’ claims.

Contact:

Delta Capital Partners

Jennifer Conley, 312-481-8194

jconley@deltacph.com

Commercial

Funded Class Actions Fill New Zealand’s Litigation Calendar in 2020

A bevy of funded class actions are making their way through New Zealand courts in 2020, sparking debate on issues such as opt-in/opt-out, and other procedural components of how the nascent class action regime should operate. As reported in the NZ Herald, one of the key cases to watch in 2020 is the Southern Response claim, where the Supreme Court issued a landmark ruling approving of opt-out status. Up to that point, class actions had been opt-in only. Opt-out benefits litigation funders and makes their financial projections easier, as it certifies that all potential plaintiffs are covered by the action unless they specifically opt-out. That eliminates the need for book-building which can be costly and time-consuming. But the opt-out status of the Southern Response claim isn't set in stone. The high court has asked the NZ Law Society and the NZ Bar Association for their feedback on the decision to certify the class as opt-out. Meanwhile, another big claim looms, as both LPF Group and IMF Bentham are battling to fund a class action against the now-defunct CBL Corporation. A court is expected to choose between the two funded claims, and many are curious as to how the civil case brought by the Financial Markets Authority will impact the selected claim, if at all. There is also an increase in both insolvency-related and construction-related disputes, as New Zealand's class action climate continues to surge, much akin to what neighboring Australia has been experiencing these past several years. The High Court Rules Committee is requesting feedback on procedural matters as relates to access to justice, and the Law Commission has confirmed it will make recommendations to the government by next year. On the table are a shortening of the High Court trial process, an investigative process for specific claims, and the streamlining of trial processes.
Commercial

Are Juris Capital’s Public Sector Union Lawsuits Motivated by Politics or Profit?

Jonathan Mitchell of Mitchell Law PLLC has filed 21 class actions against public sector unions over the past two years, which have been bankrolled by Chicago-based Juris Capital. Now some are questioning the motivation behind these lawsuits - if their intent is to turn a profit, or to squash public sector unions altogether. As reported in The Intercept, Mitchell filed nearly two-dozen lawsuits in various states prior to the Supreme Court ruling in Janus v. AFCSME. That ruling found that public sector unions may not collect fees from employees who do not wish to participate in the union. Previously, public sector unions charged agency fees, whereby workers were forced to pay for union representation, regardless of whether they wanted that representation or not. Mitchell's lawsuits are aimed at recouping hundreds of millions of dollars in public sector union dues paid by workers who did not wish to be represented in the first place. Thanks to the Northern District of California's mandate that all funding agreements in class actions be disclosed to the court, Mitchell was forced to disclose the fact that Juris Capital is his litigation funder. Juris is led by David Desser, and reportedly backed by a pair of hedge funds and other private investors. Thus far, public sector unions have won most of the early battles, with circuit courts finding that they acted in good faith and therefore need not repay workers for dues collected (some claims have been settled prior to a court ruling). However, the claims now move to the appellate stage, which many feel could be a stepping stone to the Supreme Court. With the lengthy time-to-conclusion, some are contending that the suits are part of an orchestrated campaign to crush public sector unions. Mitchell, however, insists that his lawsuits are part of no such campaign; that he brought them at his own behest. The extent of Juris' participation in a politically motivated anti-union campaign remains unclear, given that the firm is a litigation funder and therefore motivated by profit as opposed to politics. All of this aside, the real question here is: does it really matter? These claims are either meritorious or not, a decision which the Supreme Court will likely ultimately decide. In the meantime, public sector unions are complaining about the cost of the claims, which is a reasonable gripe. Perhaps someone should alert them to the rise in defense-side funding...
Commercial

Battle Over Common Fund Orders in Australia Highlights Changing Attitudes Towards Litigation Funding

With over 600 class actions filed in Australia since the regime was first allowed 27 years ago, litigation funders are finding the class action sector to be a wellspring of potential investment. Yet the rise and subsequent fall of common fund orders underscores the backlash that is growing against the sector. According to The Sydney Morning Herald, funders got a boost in 2016 when Australia introduced common fund orders. A common fund order mandates that all claim members pay out a share of their earnings to the funder of the claim, regardless of whether they signed on with the funder. The logic being that all claimants are benefitting from that funder’s participation. Common fund orders meant that funders no longer had to book-build, or sign up vast numbers of claimants. However, the Supreme Court of Australia has just recently ruled that the Federal Court and NSW Supreme Court cannot issue common fund orders. The ruling comes on the heels of heavy grumblings about the rise of funded class actions in Australia. Many are pointing to the excess profits earned by funders, with some taking as much as 80% per year on their invested capital. Even though the court ultimately decides the size of the funders cut, some argue judges are ill-equipped to make an informed decision, and often pull numbers out of thin air. Funders disagree, of course, citing the high level of risk their investments carry. Andrew Watson of Maurice Blackburn points out how funders were taking as much as 40% prior to the common fund order introduction in 2016, but that number has dipped to below 25%, in some cases as low as 10 or 12%. He argues that without common fund orders in place, funder rates are likely to rise. Meanwhile, there are calls for further investigations into the funding sector, with the Victoria Law Reform Commission considering whether to allow law firms to work on contingency. That would change the game entirely, as it would provide law firms many of the same tools that funders now utilize, and would likely shift most class actions to Victoria. There are certainly a lot of moving parts when it comes to litigation funding in Australia. Only time will tell how all of this plays out.
Announcements Commercial

Affiniti Finance Announces £10MM Funding Line to Royds Withy King

We are delighted to announce we have established a funding facility with major law firm, Royds Withy King. This £10 million pound innovative funding facility will allow the law firm to offer clients a competitive edge in the litigation arena where the costs of pursuing claims to trial can be prohibitively expensive. The funding will enable clients to unlock claims which they might otherwise find difficult to bring or where they wish to structure their own finances to the benefit of their business interests rather than the litigation. Funding under the facility will spread the risk for claimants and, very importantly, is provided on a ‘non-recourse’ basis which means that if, unexpectedly, the claim fails, then there is no comeback for the claimant. The facility has been tailored to support a variety of practice areas and sectors both in the UK and internationally, including Arbitration and Contentious Probate. Jamie Lester, Dispute Resolution Partner in Royds Withy King’s City Office, who has overseen the project, said: “Legal disputes are unfortunately a fact of life and the higher the stakes, the more damaging and costly they can be to parties who will not only have to shoulder legal expenses as part of their existing budgets but also suffer the opportunity costs of diverted resources.” “After extensive research of the funding market, we are extremely excited about the facility with Affiniti Finance whom we recognise as bringing a fresh and transparent approach to the market and whose proposition we believe will be of real and tangible benefit to our clients. The facility is designed to provide them with a tool to hedge risk, eliminate budget constraints and monetise pending claims to free up capital for other business needs. It also resets the bargaining position against deep pocket defendants. The facility can also be accessed within a matter of days rather than the customary lead time of two-three months.” Our CEO, Ian Cunningham, said: “Affiniti Finance is delighted to provide the funding facility to Royds Withy King, a leader in the UK and international litigation markets. Our facility will enable Royds Withy King clients further access to justice and forge a formidable relationship for both parties.” Stewart Wilkinson, London Head of Dispute Resolution at Royds Withy King, said: “We have always prided ourselves in offering our clients innovative pricing options and structures for pursuing litigation in the UK and overseas. The facility with Affiniti Finance is the logical next step in this process and forms part of a series of innovative initiatives that we are bringing to the market to assist clients in a rapidly changing environment.” About Affiniti Finance Affiniti Finance was founded in 2014 and specialises in providing financial support to individuals or companies who are pursuing meritorious legal claims. The company covers several areas of legal funding including Financial Mis-selling, Civil Litigation, Personal Injury and across the commercial spectrum. Affiniti Finance helps claimants manage the risk of litigation and empowers them to pursue claims that might not otherwise be possible. For further information, visit www.affinitifinance.co.uk or follow us on Twitter @affinitifinance.
Commercial

Game Changes for Litigation Funders as Australian Supreme Court Revokes Courts’ Power to Initiate Common Fund Orders

In a bid to reduce the number of class actions in Australia, the Aussie Supreme Court has struck down common fund orders, which allow courts to order that all members of a class pay a portion of their settlement or payout to the litigation funder, regardless of whether they signed an agreement with that funder. The ruling changes the game for class action funding in Australia. As reported in Law.com, common fund orders were first granted in 2016, and viewed as a means of getting around the costly and time-consuming book-building process. With common fund orders, funders need not worry about signing up all class members, they simply partnered with a law firm and funded the action, and could expect a percentage of the entire settlement or payout. However, with the Supreme Court's latest decision, those days are officially over. The court based its decision on a pair of class actions - the BMW claim alleging the company installed faulty Takata airbags (funded by Regency Funding), and Westpac claim alleging the bank breached its fiduciary responsibility in pushing certain insurance policies to customers (funded by JustKapital). Subsequent to the court's ruling, funders will have to go back to book-building to collect on payments to a class. While most funders down under aren't too keen on the decision, IMF Bentham is pleased by the court's ruling. The funder is one of the only ones large enough to actually book-build, and had been doing so successfully prior to the 2016 ruling which allowed common fund orders. The elimination of common fund orders actually reduces competition in the class action market for IMF. Other large firms that regularly operate in Australia such as LCM and Augusta will likely see a benefit to the recent decision. Australia has experienced a ballooning of its class action industry, thanks to the influx of litigation funding which has sparked numerous shareholder and investor claims - so much so that the cost of D&O insurance has soared. The courts are clearly making an effort to stem the tide of class actions nationwide. Yet not all jurisdictions are on board. The state of Victoria recently introduced a bill to allow law firms to work on contingency (currently prohibited in Australia), and the bill would make the contingency apply to all class members, regardless of whether they signed a contingency agreement with the law firm. That bill is viewed by many as 'a backdoor to common fund orders.' Its passage could result in Victoria experiencing an uptick in class actions.
Commercial

LawCoin to Tokenize Litigation Finance

LawCoin, a company that bills itself as the first platform for investing in litigation finance on the blockchain, has announced plans to tokenize its litigation finance portfolio investment vehicle, LawCoin Investments. As reported in Leader Insights, LawCoin is working with ConsenSys Codefi, a tokenization company that turns assets into digital tokens available on the Ethereum blockchain. The investment opportunity will be available to institutional and accredited investors, and the company is looking to further tokenize individual litigation finance deals. Founders Marc Goldich and Noah Axler cite tokenization's transparency as a benefit to traditional securitization. Goldich also points out that since most documents in a case are publicly filed, investors will receive an additional layer of detail that can't be mirrored with traditional securitized investments. LawCoin will also post updates and provide further documents as the cases progress. It will be interesting to see if LawCoin's tokenization brings new investors into the litigation finance space, and if that translates into increased liquidity for the sector.
Announcements Commercial

Allianz Identifies Five Risk Trends for Directors and Officers in 2020

NEW YORK--(BUSINESS WIRE)--The range of risks facing company executives or directors and officers (D&Os) – as well as resulting insurance claims scenarios – has increased significantly in recent years. With corporate management under the spotlight like never before, a new report by insurer Allianz Global Corporate & Specialty (AGCS) highlights five mega trends that will have significant risk implications for senior management in 2020 and beyond. The report, “Directors And Officers Insurance Insights 2020”, also examines some of the factors which are driving recent changes in the D&O insurance market after a period of sustained large loss activity. 1. More litigation coming from “bad news” “AGCS continues to see more claims against D&Os emanating from ‘bad news’ events not necessarily related to financial results,” says Shanil Williams, Global Head of Financial Lines at AGCS. “Scenarios include product problems, man-made disasters, environmental disasters, corruption and cyber-attacks.” These types of “event-driven” cases often result in significant securities or derivative claims from shareholders after the bad news causes a fall in share price or a regulatory investigation. Of the top 100 US securities fraud settlements, 59% are event-driven1. There has also been a spike in claims resulting from the #metoo movement, where it is alleged D&Os allowed a toxic culture to take hold and endure within companies. Other prevalent types of events are cyber incidents. AGCS has seen a number of securities class actions, derivative actions and regulatory investigations and fines, including from the EU’s General Data Protection Regulation (GDPR), in the last year, and expects an acceleration in 2020. 2. Climate change litigation on the rise Failure to disclose climate change risks will increasingly result in future litigation. Climate change cases have already been brought in at least 28 countries around the world to date with three-quarters of those cases filed in the US. There are an increasing number of cases alleging that companies have failed to adjust business practices in line with changing climate conditions. Environmental, social and governance (ESG) failings can cause brand values to plummet. “Directors will be held responsible for how ESG issues and climate change are addressed at a corporate level,” says Laura Coppola, AGCS Regional Head of Financial Lines in North America. “Increasingly, they will have to consider the impact of these when looking at strategy, governance, risk management and financial reporting.” 3. Growth of securities class actions globally Securities class actions are growing globally as legal environments evolve. AGCS has seen increasing receptivity of governments around the world to collective redress and class actions, particularly across Europe but also in Thailand and Saudi Arabia. The level of filing activity in the US has been at record highs in recent years with over 400 filings in both 2017 and 2018, almost double the average number of the preceding two decades. This increased activity is impacting both US and foreign companies that have securities listed directly in the US. Shareholder activism is also increasing dramatically. With global law firm, Clyde & Co, AGCS has compiled a risk map in the report that assesses the risk of a company being subject to a securities group action in a particular jurisdiction, taking into account the availability and prevalence of third party litigation funding, which is regarded as a strong factor in increased group action activity around the globe. While countries such as the US, Canada and Australia see the highest activity and most developed securities class action mechanisms, overall, such mechanisms are developing and strengthening around the world with the Netherlands, Germany, England and Wales showing notable development and increased activity in recent years. 4. Bankruptcies and political challenges impact AGCS expects to see increased insolvencies, which may potentially translate into D&O claims. Business insolvencies rose in 2018 by more than 10% year-on-year, owing to a sharp surge of over 60% in China2. In 2019, business failures are set to rise for the third consecutive year by more than 6% year-on-year, with two out of three countries poised to post higher numbers of insolvencies than in 2018. “Political challenges, including significant elections, Brexit and trade wars, could create the need for risk planning for boards, including revisiting currency strategy, merger and acquisition (M&A) planning and supply chain and sourcing decisions based on tariffs. Poor decision-making may also result in claims from stakeholders,” says Coppola. 5. Litigation funders spread across the world All of these mega trends are further fueled by litigation funding now becoming a global investment class, attracting investors hurt by years of low interest rates searching for higher returns. Litigation funding reduces many of the entrance cost barriers for individuals wanting to seek compensation, although there is much debate around the remuneration model of this business. Recently, many of the largest litigation funders have set up in Europe. Although the US accounts for roughly 40% of the market, followed by Australia and the UK, other areas are opening up, such as recent authorizations for litigation funding for arbitration cases in Singapore and Hong Kong. India and parts of the Middle East are predicted to be future hotspots. The challenging D&O insurance market Although it is estimated around US $15bn worth of premiums are collected annually for D&O insurance, the profitability of the sector has been challenged in recent years due to increasing competition, growth in the number of lawsuits and rising claims frequency and severity. AGCS has seen double digit growth in the number of claims it has received over the past five years. Insurers are facing more legal costs due to increasing activity, as well as more settlements and claims. Another issue is that “event-driven” litigation results in aggregation issues where multiple policies may be triggered. One event could trigger both D&O and either aviation, environmental, construction, product recall or cyber insurance policy claims. Find out more about D&O insurance About Allianz Global Corporate & Specialty Allianz Global Corporate & Specialty (AGCS) is a leading global corporate insurance carrier and a key business unit of Allianz Group. We provide risk consultancy, Property-Casualty insurance solutions and alternative risk transfer for a wide spectrum of commercial, corporate and specialty risks across 12 dedicated lines of business. Our customers are as diverse as business can be, ranging from Fortune Global 500 companies to small businesses, and private individuals. Among them are not only the world’s largest consumer brands, tech companies and the global aviation and shipping industry, but also wineries, satellite operators or Hollywood film productions. They all look to AGCS for smart answers to their largest and most complex risks in a dynamic, multinational business environment and trust us to deliver an outstanding claims experience. Worldwide, AGCS operates with its own teams in 33 countries and through the Allianz Group network and partners in over 200 countries and territories, employing over 4,400 people. As one of the largest Property-Casualty units of Allianz Group, we are backed by strong and stable financial ratings. In 2018, AGCS generated a total of €8.2 billion gross premium globally.
Commercial

IMF Bentham Formally Jumps into Contentious CBL Class Action

Last week, we reported on the contentious back-and-forth between litigation funders LPF Group and IMF Bentham. LPF accused IMF of muddying the waters with a potential shareholder action against failed insurer CBL, whom LPF is already bankrolling an action against. Now, IMF Bentham has formally stepped into the fray, after law firm Glaister Ennor filed a shareholder action which the Aussie-based funder is backing on a no-win, no-fee basis. As reported in RNZ, Glaister and IMF claim to have a significant number of both retail and institutional investors, who together purchased tens of millions of shares in CBL prior to its February, 2018 collapse. The insurer was worth $750MM on the New Zealand stock exchange when it fell apart. The Financial Markets Authority and Serious Fraud Office are investigating CBL, and LPF is already funding a shareholder action against the defunct insurer, alleging a breach of continuous disclosure obligations and insider trading by company directors. Upon IMF's announcement that it was considering its own action, LPF filed a complaint to ASIC stating that potential plaintiffs are likely to be confused by the dual action, which LPF director Phil Newland says is highly irregular. New Zealand's class action regime is far less robust than that of neighboring Australia, given the lack of such actions - especially shareholder actions. However such actions are on the rise in New Zealand thanks to litigation funding, so it will be interesting to see how the court handles the competing actions.
Commercial

Arowana Unfazed by LPF Group’s Class Action

Arowana, the New Zealand company that established Intueri Education Group in 2010, took it public in 2014, then liquidated it in 2017, is facing a potential class action lawsuit by Adina Thorn Lawyers and funded by LPF Group. However Arowana has clearly stated that the company is confident any class action against it stands no chance of success. As reported in The NZ Herald, Adina Thorn and LPF are seeking to represent over 800 investors who lost millions in the Intueri liquidation. Their suit - which has yet to be filed - would allege that Arowana, Intueri, and the former directors of both companies pocketed over $100MM upon Intueri's liquidation, with former managing director of Arowana Kevin Chin pocketing over $13MM himself. The size of the claim is expected to be over $100MM. Arowana's current market cap is $25MM, yet company directors aren't worried about the lawsuit, even failing to mention it at all during the company's annual shareholder's meeting last week. Arowana feels confident given the fact that The Financial Markets Authority, Serious Fraud Office and the Tertiary Education Commission all investigated Intueri, and although they found wrongdoing, none of their findings amounted to anything criminal, in the regulators' estimation. Given that the liquidation will not make any payments to shareholders, Adina Thorn and LPF are signaling that a class action will be the only way for shareholders to obtain remuneration.
Commercial

Litigation Funders Chomping at the Bit to Invest in Obamacare Insurance Claims

Litigation funders have long been vying to get a piece of Obamacare insurance claims, which allege the federal government failed to make good on a host of payments to health insurers. Now that the Supreme Court has decided to hear several of those claims, funders have begun reaching out to insurers with more attractive terms and pricing. According to Crain's, the underlying claims involve insurance companies who allege the federal government failed to pay roughly $12bn in aggregate payments promised under the Affordable Care Act. Insurers are bringing so-called 'risk corridor' claims, alleging the government's plan to stabilize premiums by shifting those payments from profitable insurers to less profitable ones failed, leading many insurers into insolvency. Funders have been interested in insurance claims for years now, typically offering 10 cents on the dollar to purchase the entire claim payout. Last year, however, the U.S. Court of Appeals ruled that the government is not liable, and that sent funders running for the hills. Yet the Supreme Court's decision to hear several of the risk corridor claims has revitalized interest, and funders are now offering 25 cents on the dollar just for a piece of the backend. Most health insurers have declined funders' offers, preferring instead to take their chances with the Supreme Court's decision. Yet some funders have had luck with insolvent insurers. A prime example here is Juris Capital. The funder with the now-defunct Land of Lincoln Health, which is suing the government for $76MM. Juris had offered millions of dollars in capital in exchange for a portion of the claim proceeds, but backed away from the deal after the Court of Appeals ruling. Now that the Supreme Court is set to hear oral arguments next month, with a verdict expected for June 2020, Juris has struck a deal to fund Land of Lincoln to the tune of $28.9MM for 100% of the claim proceeds, assuming they fall under $57.7MM. Should the payout exceed that amount, Juris will receive even more on the backend. Funders are also approaching large, solvent insurance companies who may want to offload the risk of a binary Supreme Court decision. It's unclear how many such claims have been funded, but as the decision date approaches, insurers should expect their phones to continue ringing off the hook.
Commercial

Litigation Funders Spar as LPF Group Complains to ASIC About IMF Bentham

Litigation funder LPF Group is funding a shareholder class action against the now-defunct insurance company CBL Corp., as well as its former directors. LPF has complained to ASIC, an Australian regulator, about rival funder IMF Bentham's proposed action, which may end up targeting only CBL and not the former directors. As reported in the NZ Herald, IMF is set to go forward with its shareholder action against CBL with or without the liquidator's consent. According to Gavin Beardsell, investment manager at IMF Bentham, the funder believes there is enough insurance to cover any legal settlement or award, this despite not yet knowing who CBLs insurer is. For that reason, Beardsell says it is unnecessary to sue the directors of CBL. Yet LPF has filed a complaint to ASIC stating that potential plaintiffs are likely to be confused by the dual action, which LPF director Phil Newland says is highly irregular. IMF has accused LPF of weaponizing its complaint, by taking it to the Aussie regulator. Class actions - especially shareholder claims - are extremely rare in New Zealand, with only one having made it to court thus far.
Commercial

Burford Targets Gender Inequity in Law with Equity Project

Burford Capital's Equity Project turned one year old last month. The initiative - launched by senior managing director Aviva Will - is aimed at incentivizing female lawyers to take greater risks. The mechanism for accomplishing this is a $50MM fund that can only be used for claims where a female attorney is first-chair, plaintiffs’ lead counsel or on a plaintiffs’ steering committee, or if the claimant is represented by a female-owned law firm. As reported in Bloomberg, The Equity Project has funded numerous cases over the last 12 months, many which surpassed Will's expectations in terms of case valuation. She initially thought the funding would go to smaller claims - those worth $2MM or less. However, the size of The Equity Project's cases has been comparable to those of the broader pool of cases that Burford funds. Will acknowledges that The Equity Project isn't going to flatten the gender inequity gap overnight, however she views her initiative as sowing the seeds of future generations of female leaders in Big Law. The project's long-term goal is to steer more women into equity partnerships and onto compensation committees at law firms. By helping women originate more claims and (hopefully) generate more revenue, The Equity Project will contribute to a cultural shift in law firms over time.
Announcements Commercial

$2.3 Billion of Capital Deployed Over 12-Month Period Across U.S. Commercial Litigation Finance Industry, According to First-of-Its-Kind Study

November 19, 2019—NASHVILLE— The first-ever detailed analysis of the U.S. commercial litigation finance industry places its size at $2.3 billion, leading U.S. litigation finance advisor, Westfleet Advisors, reported today in its inaugural Westfleet Advisors Litigation Finance Buyer’s Guide. Driven by data collected directly from litigation funders, the Guide represents the first reliable calculation of the size of the U.S. litigation finance industry and offers the most complete and revealing picture ever painted of the sector. This study includes data on the size, scope and focus of U.S. commercial litigation finance, as well as detailed profiles of many of the 41 litigation funders active in the space.

Litigation finance has remained to many—including the corporate legal departments that are its customer base—a market shrouded in mystery but filled with tremendous opportunity for users and funders alike. Through its canvassing of individual providers, Westfleet Advisors was able to “pull back the curtain” on the industry, finding that financiers have $9.5 billion of capital dedicated to financing commercial litigation in the U.S. During the 12-months from July 1, 2018 to June 30, 2019, $2.3 billion was committed to commercial litigation finance transactions in the U.S. market, quite possibly indicative of a current oversupply of capital. “[T]hese industry dynamics create favorable conditions for those potential users of litigation finance who can successfully navigate the market,” the guide concludes.

“Despite all the industry’s advances and virtues, litigation finance remains mostly opaque to its potential users, to the courts, and to other stakeholders in the civil litigation system,” said Charles Agee, founder of Westfleet Advisors and co-author of the buyer’s guide. “The industry will benefit from a broader understanding of its many benefits and from greater transparency generally. This has long been among our core objectives, and we are hopeful that this guide represents an important step in that direction.”

The guide includes one-page snapshots of major litigation financiers, identifying their preferred financing ranges, assets under management (AUM), financing criteria, and key personnel, among other information. Funders included in the guide vary from those with AUM in excess of a billion (including Bentham IMF and Therium), to those with hundreds of millions in AUM (like Validity, Parabellum, and Curiam), to small boutiques with less than $10 million under management.

Additional significant findings from the guide include:

  • The commercial litigation finance industry employs nearly 300 people in the U.S.;
  • Portfolio deals with law firms make up 47% of capital deployed; and
  • 70% of financing supports litigation being handled by law firms outside the AmLaw 200.

The full report is available at this link.

About Westfleet Advisors

Westfleet Advisors is the leading litigation finance advisor in the United States. It was founded in 2013 to bring greater transparency and efficiency to the litigation finance market by equipping users of litigation financing with expertise and resources. Our core mission is to ensure claim holders and lawyers have all the information they need to be successful with litigation financing. Our senior leadership has been active in the litigation finance industry since 1998.

Announcements Consumer

Segue Cloud Services Names Kevin Flood as Chief Operating Officer

Woodstock, NY—November 18, 2019, — Segue Cloud Services, a leading provider of cloud-based litigation finance management tools for the legal community, announced that it has appointed Kevin Flood, a proven business leader and former executive with the Coca-Cola Bottling System, as its new Chief Operating Officer. Flood will design and implement Segue Cloud Services’ ongoing business strategy, delivering both short- and long-term growth plans to build a robust organization serving attorneys and law firms across the United States. Flood has a proven track record of leading complex organizations and consistently delivering positive results. He served in several executive positions at Coca-Cola for more than two decades, including General Manager of Southern California, Vice President of Sales and Operations for the West Region, and Vice President of the New York Market Unit. In his capacity at Segue, Flood will work closely with the organization’s leadership team as the company expands its geographic and services footprint. “Kevin’s extensive experience as a driven, effective leader brings a new level of creativity and expertise to our operations,” said Jerry Fastman, Chief Executive Officer at Segue Cloud Services. “We’re excited to have him on board, and look forward to his contributions as Segue continues to reimagine technologies that serve the pre-settlement funding sector.” “I’m delighted to join the accomplished and dedicated leadership team at Segue,” said Flood. “The company is delivering a comprehensive platform that automates the entire pre-settlement funding process, allowing employees to focus on serving their clients instead of handling cumbersome administrative chores. I look forward to contributing to Segue’s growth as it continues to gain traction in the legal sector.” Headquartered in Woodstock, New York, Segue Cloud Services has developed an innovative software platform that has successfully operated a pre-settlement company since 2015. This software automates a full range of tasks associated with the pre-settlement funding process, from intake to settlement. Built on the popular Salesforce.com platform, Segue’s solution is secure, efficient, and effective. The software organizes and centralizes all contact information, populates forms, generates reports and documents, and notifies all parties by automating status changes, contract generation, and pay-off letters. Through this intuitive solution, legal finance providers can enhance productivity, streamline daily workflows, reduce costs, and speed time-to-market. About Segue Cloud Services Headquartered in Woodstock, New York, Segue Cloud Services provides cloud-based technology that automates all aspects of pre-settlement funding, from intake to settlement. Built on the Salesforce.com platform, Segue’s robust, customizable software tracks the progress of all funding requests, including the intake of forms, and automatically notifies staff, attorneys, paralegals and clients of status changes. Segue is integrated with Conga’s document management system, enabling customers to seamlessly create documents and generate reports. For additional information, visit www.seguecloudservices.com.
Commercial

In Bid for Greater Transparency, NAB Warn Shareholders of Mounting Legal Costs

National Australia Bank (NAB) is facing a myriad of regulatory actions and lawsuits which is leaving company executives in a lurch. After voluntarily self-reporting potential compliance issues to regulators, the bank announced to shareholders in its annual report that it is facing mounting legal and financial pressure in the wake of revelations from the Hayne Royal Commission. As reported in The Market Herald, NAB is alleged to have violated anti-money laundering and counter-terrorism financing laws. Regulator AUSTRAC hit the bank with a $700MM fine last year, and now NAB has self-reported potential compliance issues to various regulators in charge of those anti-money laundering and counter-terrorism financing laws. NAB also faces regulatory pressure from the Australian Securities and Investment Commission (ASIC), which is filing a civil claim against NAB after a report from the Royal Commission found the bank to have allegedly violated the Consumer Credit Protection Act. NAB's self-reporting to regulators and announcement to shareholders can be viewed as the bank turning over a new leaf, in a bid for greater transparency. However, given the intense pressure the bank is already under, it could be too little too late.
Announcements Consumer

U.S. Claims Closes $50 Million Deal

DELRAY BEACH, Fla., Nov. 12, 2019 /PRNewswire/ -- DRB Financial Solutions, LLC (DRBfinancial.com), and its wholly-owned subsidiary U.S. Claims (USClaims.com), America's premier pre-settlement funding company, today announced the two-year renewal of a $50M pre-settlement revolving credit facility.  The renewal comes amidst a string of financial transactions that have helped the company improve its offerings and foster further growth.

Steve Bashmakov, the company's Chief Financial Officer, commented, "This facility is being provided by one of our institutional partners that understands the fundamental credit quality of these assets and the strength of U.S. Claims' underwriting, origination, and servicing capabilities."

He continued, "It is a continuation of a long-term commitment with a tremendous partner.  We have chosen to renew it because it offers fantastic flexibility as well as attractive pricing and advance rates for our litigation funding business."

The $50M financing facility is yet another in a series of recent votes of confidence from the capital markets that will help fuel the company's continued growth.

About U.S. Claims: U.S. Claims (www.USClaims.com) provides litigation funding for plaintiffs, attorneys, and surgeries.  Its flagship offering is providing non-recourse financial support to personal injury victims, some of whom may have suffered catastrophic injuries from defective products, unsafe premises, motor vehicle accidents, and other types of accidents; this financial support provides the injured plaintiff the means to pay bills and endure the often long and arduous litigation process.

About DRB Financial Solutions, LLC, (DRB) provides liquidity solutions to individuals and small/medium-sized businesses holding high quality but illiquid assets. Having raised over $1 billion in capital and developed a robust origination platform, DRB is a market leader in four major lines of business:  U.S. Claims, CRG Financial, (CRGFinancial.com), DRB Capital (DRBCapital.com) and Producer Advance (ProducerAdvance.com).

Commercial

63% of In-House Counsel Report Increased Pressure to Reduce Costs Amidst a Lack of Resources

A new survey by Konexo, the alternative legal services department of global law firm Eversheds Sutherland, has found that nearly 2/3 of in-house counsel surveyed report increased pressure to reduce costs, while resources continue to dwindle. Yet despite this, GCs are loathe to outsource work to external counsel, instead looking for alternatives to the traditional law firm model. As reported by Australasian Lawyer, in-house counsel are increasingly handling larger and more complex claims, and are doing so with fewer resources at their disposal. And to top it all off, they are being asked to cut costs. Yet only 19% of respondents said that they plan to leverage external counsel for help. Instead, GCs are opting for creative workarounds, such as Legal Tech instruments which can help with data analytics and document automation. While the focus of the survey was on advancements made in the Legal Tech space, and how those services can help streamline operations and in turn ease the costs burden, there is a clear parallel here with litigation finance. The #1 selling point for funders is a reduction of both costs and risk for legal departments, and with in-house opening the welcome mat for Legal Tech, clearly the focus is on alternative strategies to achieve those aims.
Announcements Consumer

Momentum Funding Welcomes New Regional Account Executive, with a Focus on Central Florida

ORLANDO, Fla., Nov. 12, 2019 /PRNewswire/ -- Momentum Funding, a premier legal, medical, and transportation finance company, is excited to announce and welcome Kaitlynn Diaz as a new Regional Account Executive. She will oversee business in Central Florida. She comes to Momentum with a Juris Doctorate from Ave Maria School of Law and has worked in the legal industry for the past six years.
"We are very excited to have Kaitlynn join the team. She brings experience, a lot of energy, and wants to help attorneys add value to their cases. We look forward to growing our business in the Orlando market with her." said Mike Willyoung, Chief Marketing Officer at Momentum.
Ms. Diaz will directly consult and assist attorneys through the litigation finance process to offer a streamlined experience that is unmatched in the industry. Momentum Funding's core business is pre & post-settlement funding, focusing on assisting plaintiffs with their financial needs. They also provide medical funding, directly paying for medical procedures, surgeries, deductibles, and health insurance policies. For clients with transportation needs, they have launched a revolutionary ride service, 855-You-Ride, which offers a trusted and commercially insured concierge service to help transport plaintiffs to legal and medical appointments. The company has a growing national presence and provides resources and education for attorneys. They are licensed by the Florida Bar to offer continuing legal education (CLE) credits on the ethics of legal funding. The Momentum team consults with firms to add value to their clients' cases. For more information about plaintiff funding, medical funding, or their transportation service, please reach out to Elizabeth Pekin, Esq., at 855-855-FUND(3863) or visit www.momentumfunding.com.
Announcements Consumer

Legal-Bay Announces $105MM Fund to Pay for Negligence Claims in California Wildfires

PARADISE, Calif., Nov. 12, 2019 /PRNewswire/ -- Legal Bay Lawsuit Funding reports that residents of northern Californiawho have been affected by the slew of recent wildfires can apply for aid through the Wildfire Assistance Program. The $105 million fund was approved by the judge during PG&E's Chapter 11 case, and will be made available via the company's cash reserves. While the funding has been approved for victims of the 2017 wildfires and 2018's Camp Fire, payouts may be delayed due to even more disasters that have plagued the area. Numerous new wildfire claims have been filed, and the number of people affected ranks in the thousands. Even though settlements may be drastically delayed, Legal-Bay is still offering pre-settlement funding for families in need of an immediate cash advance. If you need an immediate cash advance against your pending wildfire lawsuit, you can apply at:  http://lawsuitssettlementfunding.com or call: 877.571.0405 It is difficult to prove negligence on the part of the utility companies. There must be strong evidence showing blatant irresponsibility and lack of reason when it comes to wildfire prevention. But Legal-Bay believes that with the recent court verdicts, wildfire legislation, and PG&E's outright admission of guilt, plaintiffs stand a great chance of coming out ahead. Chris Janish, CEO of Legal-Bay, commented on the recent uptick in wildfire lawsuits, "The victims of these horrific tragedies have already suffered enough, but now they are forced to wait it out as their lawsuits lag in the court system. In the meantime, pre settlement funding is available to plaintiffs who need money now to survive until their wildfire lawsuit makes it to trial. People need to rebuild their homes and their lives, and Legal-Bay is happy to help in any small way we can." If you have filed a wildfire lawsuit and need an immediate cash advance against your pending settlement, you can apply for presettlement funding at:  http://lawsuitssettlementfunding.com or call: 877.571.0405 Legal-Bay's funding programs are non-recourse, which means you only repay the settlement advance if you win your case. None of the programs should be considered to be a lawsuit loan, lawsuit loans, settlement loans, settlement loan, pre-settlement loans, or a pre-settlement loan.
Commercial

Why the Construction Industry is Ripe for Litigation Finance

The global construction industry is one that is utilizing litigation finance to greater and greater degrees. With heavy CapEx, a high rate of legal disputes and low margins, construction firms and contractors are finding solace in third party litigation finance. As reported in Construction News, last year's bankruptcy of UK contractor Carillion sent shockwaves through that nation's construction industry. Indeed, this is an industry that is teetering-- a recent CN100 poll found that the 10 largest UK construction firms reported an average pre-tax loss of -.5% last year. And total profits for the 100 largest construction and contracting companies - at just over £1B - equates to a mere 1.5% of turnover. What's more, construction is a risky business; things go wrong all the time, which naturally leads to a bevy of lawsuits. So construction and contracting companies are increasingly turning to litigation finance to achieve certainty in regard to their legal spend, and simultaneously reduce risk. And this trend isn't localized to the UK. We've reported on the rise of litigation finance in India, thanks to several construction companies there who have begun to utilize outside funding. And with China's colossal One Belt One Road initiative well-underway, everyone is expecting a rise in construction-related disputes from the 60 countries involved. Many third party funding experts have been eyeing the industry's potential expansion into Southeast Asia. It may very well end up being the construction industry which beckons global funders to that corner of the world.
Announcements Commercial

Woodsford Litigation Funding enters the Canadian market with three key hires

LONDON 11 November 2019, Woodsford Litigation Funding, the global provider of litigation financing solutions for businesses, individuals and law firms, has announced further expansion of its international executive team and entry into the Canadian market with the appointment John G. Booth, Ekin Cinar and Richard Asselin as Consultants. Ekin, with extensive experience in complex, high-value disputes involving commercial arbitration and litigation, is based in Toronto. Richard, a senior business professional with significant experience in Canada’s oil & gas service industry, is based in Calgary and will service the BC and Alberta markets for Woodsford. John, an experienced commercial litigator, investment banker, IP strategist and fund manager will split his time between the UK and Canada, with a focus on the entire country. These appointments are a graphic illustration of both the size of the opportunity Woodsford has  identified in Canada and the continued rapid global growth of the business as a whole, following last month’s announcement of three appointments to the UK executive team. “Following significant diligence, we firmly believe in the potential of the Canadian market. With these three appointments we have the key markets on both sides of the country covered. The expertise in our new Canadian team will allow us to fund all types of disputes including class actions, energy disputes, IP claims and general commercial litigation” commented Mark Spiteri, Woodford’s Finance & Commercial Director. John Booth commented, “It’s tremendously exciting to be joining one of the world’s leading litigation funders as we enter the Canadian market that I know so well. I am really looking forward to playing my part in making Woodsford Canada a success.” About Woodsford Litigation Funding Founded in 2010 and with a presence in London, Philadelphia, San Francisco, New York, Toronto, Calgary, Singapore, Brisbane and Tel Aviv, Woodsford Litigation Funding provides tailored litigation financing solutions for businesses, individuals, and law firms. This includes both single case and portfolio funding. Woodsford’s Executive team blends extensive business experience with world- class legal expertise. Woodsford is a founder member of the Association of Litigation Funders of England and Wales (ALF). Woodsford’s Chief Operating Officer, Jonathan Barnes, was recently re-elected to the board of ALF for a further three years.