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Best Practices and Lessons Learned in Firm-Funder Partnerships

September 29, 2022

Best Practices and Lessons Learned in Firm-Funder Partnerships

This Day 2 panel featured Alex Chucri, CEO and Founder of Pravati Capital, Vincent Montalto, Partner at DLA Piper, and Ronald Schutz, Partner at Robins Kaplan. The panel was moderated by Kathryn Boyd, Partner at Hecht Partners. Discussion topics ranged from operationalizing firm decisions involving funding, to the best ways to structure a funding partnership or alliance. Not everyone knows about the various structures of relationships between law firms and funders, so the panel addressed the various models in play, including those that involve some form of recourse funding. Pravati has a debt structure in play, which founder Alex Chucri thinks makes the most sense for his firm’s structure. He believes in recourse to the firm, to the management team, and personal guarantees. This makes investors more comfortable, knowing that Pravati has skin in the game. Panelists also discussed having to monitor the capital structures, and being cautious about capital allocation. A lot of funders raise $100MM and need to put that capital to work, and so they finance claims the wouldn’t otherwise take on. This is concerning. “When you put capital into a deal, it changes the whole landscape of a deal,” according to Vincent Montalto. His firm has implemented internal structures to monitor capital expenditure and management. The panel also delved into some of the risks of partnering with funders, including whether funders will withdraw their funding – how and why would they do this? Where is funder money coming from – there are all types of investment structures out there, law firms have to be aware of those, so they can better understand the risk to the funder, which presents a downstream risk to them. These are things that the average lawyer in a law firm doesn’t appreciate, but it’s very important to know if the funder  has the capital on hand, is it subject to capital calls, etc. One final point on the tax implications of recourse funding: recourse funding can be clawed back, and so its treated as a loan and so it’s not taxed. Recently there was a legal standing that if the funding structure is non-recourse, that is treated as income, which means it is taxes. Often, there are a lot of emotions about getting a deal done, so they overlook the tax implications, and there is a real danger there.
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Commercial

Katch Liquidates Consumer Claims Fund Amid Mounting Delays and Pressure

By John Freund |

Katch Fund Solutions, one of the most prominent players in consumer litigation funding, has placed its consumer claims fund into liquidation.

According to Legal Futures, the move comes in response to mounting liquidity pressures caused by prolonged delays in resolving motor-finance claims and increased uncertainty surrounding major group litigation efforts. The Luxembourg-based fund confirmed it is winding down the portfolio and returning capital to investors on a pro-rata basis.

Katch had been a key backer of large-scale consumer legal claims in the UK, supporting firms such as SSB Law and McDermott Smith Law. Both firms ultimately collapsed, with SSB Law owing £63 million including £16 million in interest, and McDermott Smith Law owing £7 million. Katch’s portfolio also included a substantial stake in the ongoing “Plevin” litigation, a group of cases alleging unfair undisclosed commissions tied to the sale of payment protection insurance. That litigation, initially estimated at £18 billion in value, suffered a blow earlier this year when the High Court declined to grant a group litigation order, further delaying resolution timelines.

The firm’s consumer claims fund held over £400 million in assets as of mid-2025, but was hit hard by increasing investor redemption requests. Katch’s team cited concerns that payouts from major motor-finance cases could be delayed until 2026 or later due to regulatory and judicial developments. With limited short-term liquidity options, the fund concluded that an orderly wind-down was the only viable path forward.

Case Developments Commercial

Omni Bridgeway Backs New Zealand Class Action Against Transpower, Omexom

By John Freund |

Omni Bridgeway is backing a newly launched class action in New Zealand targeting Transpower New Zealand Limited and its contractor Omexom, following a major regional blackout that occurred in June 2024.

According to Omni's website, the outage, which affected approximately 180,000 residents and 20,000 businesses across Northland, was triggered by the collapse of a transmission tower near Glorit during maintenance activity conducted by Omexom.

Filed in the High Court in Wellington by law firms LeeSalmonLong and Piper Alderman, the case alleges negligence on the part of both defendants. The plaintiffs claim that Transpower failed to adequately oversee the maintenance, and that Omexom mishandled the work that led to the tower’s collapse.

The class action is proceeding on an opt-out basis, meaning all impacted Northland businesses are automatically included unless they choose otherwise. Under Omni Bridgeway’s funding model, there are no upfront costs to class members, and fees are contingent on a successful outcome.

The economic impact of the outage has been pegged between NZ$60 million and NZ$80 million, according to various estimates, with businesses reporting power losses lasting up to three days and in some cases longer. In the aftermath of the blackout, Transpower and Omexom jointly contributed NZ$1 million to a resilience fund for affected communities, a figure the plaintiffs argue is woefully inadequate compared to the losses incurred.

Commercial

Loopa Finance Joins ILFA, Strengthening Global Legal Finance Reach

By John Freund |

The International Legal Finance Association (ILFA) has added Loopa Finance to its membership, marking another step in the trade association’s strategic expansion across Latin America and continental Europe. The announcement highlights ILFA’s continued efforts to support the growth of responsible legal finance and its positioning as the leading global voice for commercial litigation funders.

According to a press release issued by ILFA, the addition of Loopa Finance — formerly known as Qanlex — is seen as a major milestone in expanding the organization’s presence in key regional markets. Founded in 2020, Loopa operates across Latin America and Europe and specializes in litigation and arbitration funding, with a focus on innovative, risk-sharing funding models that utilize analytics and technology. The company’s inclusion brings further regional expertise to ILFA’s growing international network.

ILFA’s Director of Growth and Membership Engagement, Rupert Cunningham, emphasized the importance of Latin America’s rapidly evolving legal finance landscape, noting that Loopa’s entry will help enhance advocacy efforts with national governments and the European Union. Juliana Giorgi, General Counsel for Latin America at Loopa, echoed the sentiment, stating that joining ILFA reflects the company’s commitment to professionalism, transparency, and the development of a responsible funding ecosystem.

This move comes at a time when legal finance continues to professionalize globally, with trade associations like ILFA playing a crucial role in shaping regulatory conversations and establishing best practices. The addition of a cross-border funder like Loopa underscores the increasing global alignment within the commercial legal finance sector and raises questions about how funders will navigate differing regulatory environments while pursuing expansion.