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M&A Dispute Volume Is Rising in Climate of Economic Uncertainty and Geopolitical Upheaval, BRG’s 2022 M&A Disputes Report Finds

Mergers and acquisitions disputes accelerated in 2022 even as deal activity slowed, with the darkening economic outlook expected to fuel further disagreements over deals in the coming year, according to the 2022 M&A Disputes Report from Berkeley Research Group (BRG) released today.

Now in its third year, the report examines the global M&A disputes landscape and features qualitative and quantitative research from some of the world’s leading deal and disputes experts. The latest survey found that macroeconomic concerns are surpassing COVID-19 disruptions as primary dispute catalysts, a trend that dealmakers, lawyers and private equity executives expect to extend into 2023.

Continuing last year’s global scope, the 2022 report examines M&A dispute activity and insights from the Europe, Middle East and Africa (EMEA), North America and Asia–Pacific (APAC) regions, investigating recurring themes while posing additional questions and revealing new trends as the pandemic’s effects begin to subside.

The report draws from a quantitative survey of 181 lawyers, private equity professionals and corporate finance advisors, with additional perspectives from more than 20 of the world’s top lawyers and experts working in M&A, disputes and private equity. Outside contributors come from leading firms including Quinn Emanuel Urquhart & Sullivan, Jones Day, Hogan Lovells and Linklaters.

Key takeaways include:

  • The dispute pace likely will pick up in the coming year amid continued market volatility due to concerns over inflation and a possible recession, as well as geopolitical uncertainty and lingering effects of COVID-19.
  • Financial Technology (FinTech), Energy & Climate and Traditional Financial Services are the top-ranked sectors for increased dispute activity in 2022. Respondents expect the Construction & Real Estate sector to take the lead in 2023.
  • Environmental, social and governance (ESG) disputes are brewing as regulations take shape and businesses strive to meet evolving, multifaceted ESG criteria.
  • EMEA is the region expected to drive dispute activity in the coming year, with strict regulatory regimes and political strife seen as significant disruptive factors.

The report examines how rising concerns around the volatility of markets and political upheaval are influencing M&A deals and dispute behavior. BRG’s research found that the dramatic events of the past year—including the energy crisis in Europe and elsewhere, falling stock prices and real-estate market disruptions—have shifted the sectors experiencing the most disputes compared to 2021, when COVID-19’s effects heavily impacted hospitality, life sciences and technology. The report also tracks steps that lawyers and advisors are recommending to reduce the likelihood of disputes, such as a greater emphasis on conducting enhanced due diligence while deemphasizing material adverse change and material adverse effect clauses for sellers.

“With geopolitical tensions, macroeconomic concerns and lingering COVID-19 disruptions impacting increasingly complex M&A deals, this report emphasizes the need for a clear understanding of the fundamental issues driving disputes. A multidisciplinary approach will be required to address these challenges effectively,” said BRG Managing Director Mustafa Hadi. “The data and expert analysis collected within the 2022 report offer deep insights on the volatility and uncertainty that will drive disputes in the months ahead.”

Download a copy of the 2022 BRG M&A Disputes Report.

About BRG
Berkeley Research Group, LLC is a global consulting firm that helps leading organizations advance in three key areas: disputes and investigations, corporate finance, and performance improvement and advisory. Headquartered in California with offices around the world, we are an integrated group of experts, industry leaders, academics, data scientists and professionals working across borders and disciplines. We harness our collective expertise to deliver the inspired insights and practical strategies our clients need to stay ahead of what’s next. Visit thinkbrg.com to learn more.

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Pegasus Legal Capital Completes $74 Million Securitization to Fuel Growth

Pegasus Legal Capital, LLC ("Pegasus") (mylawfunds.com), a prominent pre-settlement legal funding company in the United States, announced today that it has successfully completed a $74 million litigation finance securitization. This achievement marks Pegasus' second securitization transaction in the asset class and another significant milestone in its capital market journey. The proceeds from this transaction will further propel Pegasus' growth across key markets in the United States.

Pegasus Managing Director, Alexander Khanas, expressed, "With the successful completion of this transaction, Pegasus will expand its business in the personal injury market while upholding its industry-leading service standards."

GreensLedge Capital Markets LLC played the role of Placement Agent for Pegasus. GreensLedge Senior Managing Director, Douglas Lipton, added, "We are delighted to continue expanding Pegasus' investor base through their second securitization issuance and assisting them in creatively developing their platform."

Headquartered in Deerfield Beach, Florida, Pegasus was founded in 2008 as a pre-settlement litigation finance company. Since its inception, the company's management team has successfully sourced, underwritten, and serviced over half a billion dollars through more than 30,000 advances. While Pegasus has traditionally focused on the New York market, it has established a strong presence in the Southeast and Texas markets as well.

Pegasus is a proud member of the American Legal Finance Association (ALFA), a national organization comprising companies that provide non-recourse funds to personal injury victims. ALFA's primary objective is to establish industry standards for transparency in legal funding transactions, ensuring upfront and clear disclosure to consumers.

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Announcements Commercial Deals

New Burford Capital Research Reveals How Businesses are Preparing for Likely Rise in Global Energy Transition Disputes

By Harry Moran |

Burford Capital, the leading global finance and asset management firm focused on law, today releases new research entitled “Energy transition disputes: GCs and senior lawyers on the business impacts of legal challenges to come,” which demonstrates how businesses are preparing for a likely rise in legal disputes related to the global energy transition. This transition―or the shift to renewable sources of energy―is likely to cause an increase in expensive commercial disputes.

Businesses are investing significant sums in this transition, and corporate commitments highlight the scale of economic engagement as they invest in the new technologies, infrastructure and other resources that will be needed. But multifaceted legal and commercial pressures present businesses with a myriad of potential challenges including contractual disagreements, regulatory compliance issues and the need for intellectual property enforcement or litigation. Burford’s research report aims to offer a unique perspective on how corporations foresee the expected rise in litigation and arbitration related to this energy transition, examining the areas of business impact related to this evolving landscape.

Burford commissioned this independent research by capturing insights from 300 GCs and heads of litigation across key industries impacted by the energy transition and spanning North America, Europe, Asia and Australia.

Key findings from the study include:

Disputes relating to the energy transition are rising

·       76% of GCs report they are already encountering disputes related to the energy transition and nearly half (47%) expect a further rise in the volume of such disputes in the next decade, driven by evolving laws, new technologies and infrastructure requirements.

Disputes relating to the energy transition are expected to be costly

·       Almost two in three GCs (63%) expect legal fees and expenses to exceed $4 million per energy transition case; a notable minority (29%) expect per case costs to exceed $10 million.

·       Over half (52%) view high costs as a significant factor in deciding not to pursue disputes.

·       Half (50%) of GCs agree that the energy transition will create the need for additional capital sources for the business.

Expected disputes span all types of business conflict

·       GCs are most likely to predict (77%) that the energy transition will result in more contractual disputes and commercial arbitration.

·       Joint ventures are expected to be particularly prone to disputes over profit allocation (76%) and intellectual property rights (65%).

·       Over half of GCs (57%) also expect their businesses to face arbitrations to resolve investor-state conflicts relating to the transition.

New tools are needed to manage the rising dispute costs

·       Legal finance is increasingly used to mitigate the financial burden of these disputes; three in four (75%) GCs have used or would consider using legal finance to offset the cost of disputes relating to this transition.

·       In particular, GCs value monetization―or advancing some of the expected entitlement of a pending claim, judgment or award― to generate liquidity from claims tied up in litigation and arbitration. With legal finance, companies can also offset the cost of pursuing affirmative litigation to generate liquidity, shifting legal departments from cost centers to value drivers.

Christopher Bogart, CEO of Burford Capital, said: “Businesses face significant challenges related to the global energy transition due to cross-border projects, differing legal frameworks and rapidly evolving policies. Additionally, long-term energy contracts may not keep pace with energy markets and technologies, resulting in conflicts among stakeholders. Burford’s latest research demonstrates the value of corporate finance for law, as legal finance helps companies manage the high costs of energy transition disputes and allows them to pursue meritorious claims without depleting resources.”

Burford’s research is based on a 2024 survey conducted by GLG and is supplemented by interviews with ten global energy transition experts conducted by Ari Kaplan Advisors.

The research report can be downloaded on Burford’s website.

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Announcements Commercial People Moves

Hannah Sadler Joins GLS Capital Patent Investment Team

By Harry Moran |

Hannah Sadler has joined the firm as a vice president and member of the patent investment team.

“We are very happy to welcome Hannah to GLS Capital as a vice president and member of our team focusing on patent investments,” said Adam Gill, a GLS Capital managing director, co-founder, and leader of the firm’s patent-related investing. “Attracting top-tier talent is essential for continuing to help our clients achieve success, and Hannah’s background in patent litigation will be invaluable for navigating the complexities of patent investments and helping to drive our mission forward.”

Sadler focuses on diligence around qualified underwriting opportunities and monitoring and managing the firm’s patent litigation investments.

Before joining GLS Capital, Sadler was a patent litigator at Global IP Law Group in Chicago. She has over a decade of experience with all aspects of patent portfolio management and enforcement, including prosecution, litigation, sales, licensing, and portfolio valuation.

Sadler earned her J.D. (cum laude) from DePaul University College of Law and her Bachelor of Arts from the University of San Diego.

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