Community Spotlights

Community Spotlight: Phil Goter, Partner, Intellectual Property Group, Barnes & Thornburg

By John Freund |

Clients trust Phillip Goter to enforce and manage their valuable intellectual property. Phil counsels organizations – ranging from startups to Fortune 100 companies – around the world, managing litigation through trial and appeal, thoughtfully obtaining patents and trademarks, conducting pre-suit investigations, advising on regulatory issues, conducting due diligence and freedom to operate analyses, and resolving complex disputes.

Phil leverages his business and industry experience when working with his clients, and they value his strategic thinking and trust his counsel regarding IP strategies that protect R&D investment and product markets.

Phil, who practices in the firm’s Minneapolis office, frequently works with high-tech clients in the computer software and hardware space. His keen familiarity with computer hardware, standards-essential cellular infrastructure, 5G, GPS, mobile apps, autonomous vehicles, artificial intelligence, machine learning, computer and network security, VoIP, wireless networking, home automation, medical devices, and cloud computing aid him in providing successful outcomes for his clients.

He has deep experience providing counsel to international businesses on U.S. intellectual property matters, including representing European and Asian consumer electronics, networking and telecommunications, and pharmaceutical companies in global IP disputes. His practice includes patent litigation in U.S. district courts around the country and before the U.S. Court of Appeals for the Federal Circuit, with the majority in key patent litigation venues such as Texas, Delaware, and California.

Phil also has significant experience with complex economic matters and his cases have included competition law issues, such as monopolization, attempted monopolization, and Walker Process and sham litigation claims. He has successfully obtained lost profits verdicts in pharmaceutical cases and has commissioned and used numerous expert surveys in litigation to prove infringement, indirect infringement, rates of infringement, apportionment, lost profits, and value of the invention.

He also has in-house counsel experience. Prior to joining Barnes & Thornburg, Phil was an investment manager and legal counsel for a global, publicly traded litigation finance and legal risk management company. He advanced the company’s IP initiatives globally and handled U.S. litigation matters through the entire life cycle of the litigation funding relationship, including sourcing, evaluating, and monitoring IP and commercial investments through to resolution.

Outside of his legal practice, Phil teaches intellectual property at the University of Minnesota Law School and can often be found at the hockey rink, coaching his three children’s youth hockey teams.

Company Name and Description: With more than 800 attorneys and other legal professionals, Barnes & Thornburg is one of the largest law firms in the country. We serve clients worldwide from offices in Atlanta, Boston, California, Chicago, Delaware, Indiana, Michigan, Minneapolis, Nashville, New Jersey, New York, Ohio, Philadelphia, Raleigh, Salt Lake City, South Florida, Texas and Washington, D.C. We provide guidance in more than 50 dedicated practice areas, including litigation, intellectual property, labor and employment and corporate law. We are where you need us. Find out more at btlaw.com.

Company Website: btlaw.com

Year Founded: 1982

Headquarters: Largest office is in Indianapolis

Area of Focus: Intellectual property

Member Quote: Litigation finance has become an increasingly important financial tool for IP owners, who often find themselves disadvantaged by large, well-capitalized competitors. In this lopsided dynamic, non-recourse capital from trusted legal funders gives me the ability to right the harms inflicted upon my clients.

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Community Spotlights

Community Spotlight: Dr. Detlef A. Huber, Managing Director, AURIGON LRC

By John Freund |

Detlef is a German attorney, former executive of a Swiss reinsurance company and as head of former Carpentum Capital Ltd. one of the pioneers of litigation funding in Latin America. Through his activities as executive in the insurance claims area and litigation funder he gained a wealth of experience in arbitrations/litigations in various businesses. He is certified arbitrator of ARIAS US and ARIAS UK (AIDA Reinsurance and Insurance Arbitration Society) and listed on the arbitrators panel of DIS (German Arbitration Institute).

He studied law in Germany and Spain, obtained a Master in European Law (Autónoma Madrid) and doctorate in insurance law (University of Hamburg).

Detlef speaks German, Spanish, English fluently and some Portuguese.

Company Name and Description:  AURIGON LRC (Litigation Risk Consulting) is at home in two worlds: dispute funding and insurance. They set up the first European litigation fund dedicated to Latin America many years ago and operate as consultants in the re/insurance sector since over a decade.

Both worlds are increasingly overlapping with insurers offering ever more litigation risk transfer products and funders recurring to insurance in order to hedge their risks. Complexity is increasing for what is already a complex product.

Aurigon acts as intermediary in the dispute finance sector and offers consultancy on relevant insurance matters.

Company Website: www.aurigon-lrc.ch

Year Founded: 2011, since 2024 offering litigation risk consulting  

Headquarters: Alte Steinhauserstr. 1, 6330 Cham/Zug Switzerland

Area of Focus:  Litigation funding related to Latin America and re/insurance disputes

Member Quote: “It´s the economy, stupid. Not my words but fits our business well. Dont focus on merits, focus on maths.”

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Manolete Partners Releases Half-Year Results for the Six Months Ended 30 September 2024

By Harry Moran |

Manolete (AIM:MANO), the leading UK-listed insolvency litigation financing company, today announces its unaudited results for the six months ended 30 September 2024. 

Steven Cooklin, Chief Executive Officer, commented: 

“These are a strong set of results, particularly in terms of organic cash generation. In this six-month period, gross cash collected rose 63% to a new record at £14.3m. That strong organic cash generation comfortably covered all cash operating costs, as well as all cash costs of financing the ongoing portfolio of 413 live cases, enabling Manolete to reduce net debt by £1.25m to £11.9m as at 30 September 2024. 

As a consequence of Manolete completing a record number of 137 case completions, realised revenues rose by 60% to a further record high of £15m. That is a strong indicator of further, and similarly high levels, of near-term future cash generation. A record pipeline of 437 new case investment opportunities were received in this latest six month trading period, underpinning the further strong growth prospects for the business. 

The record £14.3.m gross cash was collected from 253 separate completed cases, highlighting the highly granular and diversified profile of Manolete’s income stream. 

Manolete has generated a Compound Average Growth Rate of 39% in gross cash receipts over the last five H1 trading periods: from H1 FY20 up to and including the current H1 FY25. The resilience of the Manolete business model, even after the extraordinary pressures presented by the extended Covid period, is now clear to see. 

This generated net cash income of £7.6m in H1 FY25 (after payment of all legal costs and all payments made to the numerous insolvent estates on those completed cases), an increase of 66% over the comparative six-month period for the prior year. Net cash income not only exceeded by £4.5m all the cash overheads required to run the Company, it also exceeded all the costs of running Manolete’s ongoing 413 cases, including the 126 new case investments made in H1 FY25. 

The Company recorded its highest ever realised revenues for H1 FY25 of £15.0m, exceeding H1 FY24 by 60%. On average, Manolete receives all the cash owed to it by the defendants of completed cases within approximately 12 months of the cases being legally completed. This impressive 60% rise in realised revenues therefore provides good near-term visibility for a continuation of Manolete’s strong, and well-established, track record of organic, operational cash generation. 

New case investment opportunities arise daily from our wide-ranging, proprietary, UK referral network of insolvency practitioner firms and specialist insolvency and restructuring solicitor practices. We are delighted to report that the referrals for H1 FY25 reached a new H1 company record of 437. A 27% higher volume than in H1 FY24, which was itself a new record for the Company this time last year. That points to a very healthy pipeline as we move forward into the second half of the trading year.” 

Financial highlights: 

  • Total revenues increased by 28% to £14.4m from H1 FY24 (£11.2m) as a result of the outstanding delivery of realised revenues generated in the six months to 30th September 2024.
    • Realised revenues achieved a record level of £15.0m in H1 FY25, a notable increase of 60% on H1 FY24 (£9.4m). This provides good visibility of near-term further strong cash generation, as on average Manolete collects all cash on settled cases within approximately 12 months of the legal settlement of those cases
    • Unrealised revenue in H1 FY25 was £(633k) compared to £1.8m for the comparative H1 FY24. This was due to: (1) the record number of 137 case completions in H1 FY25, which resulted in a beneficial movement from Unrealised revenues to Realised revenues; and (2) the current lower average fair value of new case investments made relative to the higher fair value of the completed cases. The latter point also explains the main reason for the marginally lower gross profit reported of £4.4m in this period, H1 FY25, compared to £5.0m in H1 FY24. 
  • EBIT for H1 FY25 was £0.7m compared to H1 FY24 of £1.6m. As well as the reduced Gross profit contribution explained above, staff costs increased by £165k to £2.3m and based on the standard formula used by the Company to calculate Expected Credit Losses, (“ECL”), generated a charge of £140k (H1 3 FY24: £nil) due to trade debtors rising to £26.8m as at 30 September 2024, compared to £21.7m as at 30 September 2023. The trade debtor increase was driven by the outstanding record level of £15.0m Realised revenues achieved in H1 FY25.
  • Loss Before Tax was (£0.2m) compared to a Profit Before Tax of £0.9m in H1 FY24, due to the above factors together with a lower corporation tax charge being largely offset by higher interest costs. 
  • Basic earnings per share (0.5) pence (H1 FY24: 1.4 pence).
  • Gross cash generated from completed cases increased 63% to £14.3m in the 6 months to 30 September 2024 (H1 FY24: £8.7m). 5-year H1 CAGR: 39%.
  • Cash income from completed cases after payments of all legal costs and payments to Insolvent Estates rose by 66% to £7.6m (H1 FY24: £4.6m). 5-year H1 CAGR: 46%.
  • Net cashflow after all operating costs but before new case investments rose by 193% to £4.5m (H1 FY24: £1.5m). 5-year H1 CAGR: 126%.
  • Net assets as at 30 September 2024 were £40.5m (H1 FY24: £39.8m). Net debt was reduced to £11.9m and comprises borrowings of £12.5m, offset by cash balances of £0.6m. (Net debt as 31 March 2024 was £12.3m.)
  • £5m of the £17.5m HSBC Revolving Credit Facility remains available for use, as at 30 September 2024. That figure does not take into account the Company’s available cash balances referred to above.

Operational highlights:

  • Ongoing delivery of record realised returns: 137 case completions in H1 FY25 representing a 18% increase (116 case realisations in H1 FY24), generating gross settlement proceeds receivable of £13.9m for H1 FY25, which is 51% higher than the H1 FY24 figure of £9.2m. This very strong increase in case settlements provides visibility for further high levels of cash income, as it takes the Company, on average, around 12 months to collect in all cash from previously completed cases.
  • The average realised revenue per completed case (“ARRCC”) for H1 FY25 was £109k, compared to the ARRCC of £81k for H1 FY24. That 35% increase in ARRCC is an important and an encouraging Key Performance Indicator for the Company. Before the onset and impact of the Covid pandemic in 2020, the Company was achieving an ARRCC of approximately £200k. Progress back to that ARRCC level, together with the Company maintaining its recent high case acquisition and case completion volumes, would lead to a material transformation of Company profitability.
  • The 137 cases completed in H1 FY25 had an average case duration of 15.7 months. This was higher than the average case duration of 11.5 months for the 118 cases completed in H1 FY24, because in H1 FY25 Manolete was able to complete a relatively higher number of older cases, as evidenced by the Vintages Table below.
  • Average case duration across Manolete’s full lifetime portfolio of 1,064 completed cases, as at 30 September 2024 was 13.3 months (H1 FY24: 12.7 months).
  • Excluding the Barclays Bounce Back Loan (“BBL”) pilot cases, new case investments remained at historically elevated levels of 126 for H1 FY25 (H1 FY24: 146 new case investments).
  • New case enquiries (again excluding just two Barclays BBL pilot cases from the H1 FY24 figure) achieved another new Company record of 437 in H1 FY25, 27% higher than the H1 FY24 figure of 343. This excellent KPI is a strong indicator of future business performance and activity levels.
  • Stable portfolio of live cases: 413 in progress as at 30 September 2024 (417 as at 30 September 2023) which includes 35 live BBLs.
  • Excluding the Truck Cartel cases, all vintages up to and including the 2019 vintage have now been fully, and legally completed. Only one case remains ongoing in the 2020 vintage. 72% of the Company’s live cases have been signed in the last 18 months.
  • The Truck Cartel cases continue to progress well. As previously reported, settlement discussions, to varying degrees of progress, continue with a number of Defendant manufacturers. Further updates will be provided as concrete outcomes emerge.
  • The Company awaits the appointment of the new Labour Government’s Covid Corruption Commissioner and hopes that appointment will set the clear direction of any further potential material involvement for Manolete in the Government’s BBL recovery programme.
  • The Board proposes no interim dividend for H1 FY25 (H1 FY24: £nil).

The full report of Manolete’s half-year results can be read here.

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LegalPay’s CIO Highlights the Opportunities and Challenges for Defense-Side Funding

By Harry Moran |

As the legal funding industry has matured and become a mainstream feature of many jurisdictions’ legal systems, funders are increasingly looking at ways to diversify their activities.

In an article for Insolvency Tracker, Tanya Prasad, CIO of LegalPay, addresses the niche topic of defense-side funding and examines whether there is potential for this type of legal funding to grow in the same way that plaintiff funding has over recent years. Prasad notes that in an environment where “the demand for risk management tools in litigation grows”, large corporations may look to third-party funders to help supplement legal budgets “while potentially achieving favourable outcomes”.

Prasad acknowledges that compared to traditional plaintiff-side funding, defense-side funding “comes with unique challenges”. Whilst claimants may seek to maximise their financial returns in the form of damages and compensation, a defendant will “generally focus on minimizing loss exposure.” As a result of this difference in goals, Prasad suggests that funders would need to not only “employ creative pricing structures”, but would also need to find new metrics to define success.

The latter point is one that Prasad argues is key to creating a viable defense-side funding ecosystem, noting that “establishing a clear definition of success” may have different parameters for different defendants. Examples of this could include structuring funding agreements to incorporate “avoided loss” measures, which would define success based on “achieving a favorable settlement or dismissal at a lower financial cost than anticipated.”

If these difficulties that Prasad highlights can be overcome, she suggests that “defense-side litigation funding has the potential to redefine legal finance, supporting fair representation for both plaintiffs and defendants and expanding access to justice across the board.” Additionally, Prasad points to a handful of examples where defense-side funding has been successfully employed, such as the Gillette v. ShaveLogic case, where Burford Capital provided funding for the defendant to successfully oppose Gillette’s claims of trades secret misappropriation and unfair competition.