Mustang Litigation Funding of Wayzata, Minnesota; Mustang Specialty Funding I and II; James “Jimmy” Beltz, and Kevin Cavanaugh Remove Legal Bay Lawsuit to New Jersey Federal Court
Public
Legal Bay, The Lawsuit Settlement Funding Company, announced today that on June 15, 2022, its recent New Jersey State Court lawsuit filing against Mustang Legal Funding and its principals has been removed to the United States District Court for the District of New Jersey, Newark Vicinage, by the Mustang Entities, James Beltz, and Kevin Cavanaugh. The case now bears the following docket name: Legal Bay LLC v. Mustang Funding LLC, et al., No. 22-cv-3941 (ES) (JBC). The matter has been assigned to District Judge Esther Salas and Magistrate Judge James B. Clark, III.
Previously, Legal Bay had notified its business contacts of the suit’s filing, but had not made any public statements. With the removal of Legal-Bay’s action to Federal Court, Legal Bay believes that the time is now appropriate to disseminate a notice to the ligation funding industry about its lawsuit and its importance to the industry’s direction and commercial standards.
Chris Janish, CEO of Legal Bay, commented, “Our complaint against the Mustang entities and their principals is a public record at this point, and we will let the legal process play out in Federal Court. Legal Bay’s purpose in pursuing this matter is not only to protect its own interests from the Mustang defendants’ misconduct, but to send a message that their documented, abhorrent behavior is not limited to the Mustang defendants, but commonplace in the litigation and pre-settlement funding industry. These issues will hopefully, at long last, be formally addressed by Legal Bay’s lawsuit.”
Legal Bay has asked the court to dissolve its joint venture with the Mustang entities and is asserting other equitable and legal claims against the Mustang defendants. Legal Bay has reason to believe that, in addition to the equitable relief it is entitled to, its monetary damages are substantial. The exact amount of those damages is not yet fully calculable, but will be determined in due course during the litigation.
Janish added: “While we had hoped to avoid the need for a lawsuit, our hands were tied by Mustang’s continuing misconduct. Legal Bay looks forward to continuing their work with the industry’s leaders and regulators in order to find better ways to protect members engaged in formal business relationships from deceptive and anti-competitive business practices in the industry, as well as initiatives for better disclosures to consumers where previous legislation has fallen short.”
Legal Bay is represented by Fox Rothschild LLP within its Morristown, New Jersey office, and Timothy P. Kebbe, Esq. of Hawthorne, New York. Mustang and the other defendants are represented by Kasowitz, Benson, Torres, & Friedman LLP, of Manhattan.
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.
Omni Bridgeway Limited (ASX: OBL) (Omni Bridgeway, OBL, Group) announces the key investment performance metrics for the three months ended 30 September 2024 (1Q25, Quarter).
Summary
Investment proceeds of A$105.8 million in 1Q25; A$14.2 million provisionally attributable to OBL1, excluding management and performance fees.
Performance fees of A$9.7 million received during the Quarter2.
Management, transaction and equivalent fees of A$5.9 million during the Quarter.
15 full and partial completions in the Quarter, delivered an overall multiple on invested capital (MOIC) of 2.7x.
7 full completions during the quarter had a combined fair value conversion ratio of 97%3.
A$129 million in new fair value added from A$138 million of new commitments.
Strong pipeline, with agreed term sheets outstanding for an estimated A$198 million in new commitments, if converted.
Transaction fees have successfully been included in nearly all new commitments made in FY25 and/or negotiated in new term sheets.
OBL cash and receivables of A$114 million at 30 September 2024.
A$0.8 billion of fair value in potential completions over the next 12 months.
Good progress in relation to the strategic focus areas of cost optimisation and secondary market transactions.
Key metrics and developments for the Quarter
Income and completions
During the Quarter, five full completions and seven partial completions were recognised, and two full completions and one partial completion were recorded as income yet to be recognised (IYTBR), resulting in proceeds of A$105.8 million for the quarter, with A$14.2 million provisionally attributable to OBL (excluding management and performance fees1).
The overall MOIC on these 15 full and partial completions during the quarter (incl. IYTBR) was 2.7x.
The seven full completions during the Quarter (incl. as IYTBR) had a combined fair value conversion ratio of 97%.3 The fair value conversion ratio for all 31 fully completed investments (excl. as IYTBR) since transitioning to fair value per 31 December 2023 is 111%.
New Commitments
As per the date of this report, new commitments of A$138 million were made to 10 new investments as well as to a number of investments with increased investment opportunities. This level, proportionate to the full year target, reflects the typical northern hemisphere seasonality, and is in line with prior years.
Total new commitments include A$28 million of potential external co-fundings for new investments originated and managed by OBL. OBL will be entitled to separately agreed management fees, transaction and performance fees on such external co-funding.
The fair value associated with these new commitments is A$129 million.
Strong pipeline of 34 agreed exclusive term sheets, representing approximately A$198 million in investment opportunities.
Transaction fees have been successfully included in the majority of new commitments made and term sheets signed in FY25. Transaction fees have typically been structured as a combination of an upfront fee and an annual recurring fee at or exceeding on average 2.5% of the investment commitment (in total over the life of the investment).
Portfolio review
As at 30 September 2024, A$0.8 billion of fair value is assessed to potentially complete in the 12 months until 30 September 2025 (12 Month Fair Value). The 12 Month Fair Value is the proportionate part of our total book fair value, which has expected cash inflows over the applicable 12 month period based on the underlying probability weighted net cash flows fair value models. All, part or none of these investment inflows may eventuate during the 12-month period.
Corporate
As announced during the full year results presentation on 29 August 2024, the current strategic focus is on cost optimisation, and fair value validation through completions and secondary market transactions.
Secondary market discussions on multiple assets are progressing well. A status update will be provided at the semi-annual results presentation or through specific prior ASX announcements.
At 30 September 2024, the Group held A$113.6 million in cash and receivables (A$71.2 million in OBL balance sheet cash, A$1.0 million in OBL balance sheet receivables and A$41.4 million of OBL share of cash and receivables within Funds).
In aggregate, at 30 September 2024 OBL had approximately A$114 million to meet operational needs, interest payments, and fund investments before receiving any proceeds from investment completions, secondary market sales, management and transaction fees, and associated fund performance fees.
Footnotes
Represents indicative cashflows (excluding management and performance fees) from the Funds to OBL in connection with the investment completions. It represents the aggregate estimate of the cash distributed and yet to be distributed under the various distribution waterfalls of the Funds assuming investment proceeds are gross cash proceeds. The Fund's capital status and waterfalls operate on a cash collection and distribution basis and do not align with the accounting treatment. Accordingly, the income and NCI attribution disclosed in the Group Consolidated Financial Statements will not necessarily match this.
Performance fees received are subject to clawback arrangements, to ensure that performance fees ultimately reflect actual fund returns and applicable hurdles. As a result, accrual of performance fees for accounting purposes will generally occur in a later period to the cash receipt.
The fair value conversion ratio indicates the ratio of cash proceeds and deployments in connection with completed investments, discounted back to the date of the last reported portfolio fair value (30 June 2024 currently), compared to the reported fair value of such completed investments as at that prior reporting date.
All metrics presented are on a full investment basis, excluding the impact of co-investments or partial secondary sales. This reflects a change in methodology from market disclosures prior to FY25, and better reflects the performance of the investments originated, underwritten and managed by the Group.
Full life to date metrics include any partial completions in prior periods for the investments involved.
Relates to full completions recognised and yet to be recognised during the Quarter.
IYTBR reflects the status as per 30 September 2024. If a matter was originally reported as IYTBR for a period and has been recognised as revenue in a later quarter, it is no longer reported in this table as IYTBR in the initial period.
Includes Funds 2&3, Fund 4, Fund 6, and Fund 8 and represents OBL's portion of each respective Fund.
Includes Fund 5, which is not consolidated within the Group Consolidated Financial Statements, and represents OBL's 20% interest.
Includes Funds 2&3, Fund 4, Fund 6, and Fund 8 and represents the external investors' portion of each respective Fund.
Further information
Further information on terms used in this announcement is available in our Glossary and Notes:
The Glossary and Notes contain important information, including definitions of key concepts, and should be read in conjunction with this announcement.
The investments of Funds 2&3, Fund 4 and Fund 6 are consolidated within the Group Consolidated Financial Statements, along with the interest of the respective external fund investors.
The investments of Fund 8 are consolidated within the Group Consolidated Financial Statements. Fund 1 was deconsolidated on 31 May 2023; its metrics, effective from this date, are not disclosed in this document. The Fund 4 IP portfolio was deconsolidated on 8 December 2023 following the sale of a 25% interest in these investments.
Fund 1 and Fund 5 are not consolidated within the Group Consolidated Financial Statements; the residual interest in Fund 1 and in the Fund 4 IP portfolio are recognised as an investment in associate, Fund 5 is brought in at the Group’s attributable 20% share of income, assets, and liabilities. Throughout this document, Fund 5 is presented at 100% values (except where otherwise stated) for consistency of presentation across OBL's funds.
Commitments include conditional, and investment committee approved investments. This report includes a number of concepts, such as fair value and income yet to be recognised, which are classified as a non-IFRS financial measure under ASIC Regulatory Guide 230 “Disclosing non-IFRS financial information”. Management believes that these measures are useful for investors to understand the operations and financial condition of the group. Unless expressly stated, this non-IFRS financial information has not been subject to audit or review by BDO in accordance with IFRS.
The figures presented in this document are based on preliminary data and have not been audited. While every effort has been made to ensure the accuracy of the information, these figures are subject to change and should not be considered final.
This announcement is authorised for release to the market by the Disclosure Committee.
NorthWall Capital ("NorthWall"), a leading credit investment firm delivering private capital solutions to counterparties in Western Europe, today announces the appointment of Shannon Cody as Head of Business Development, EMEA. Shannon will focus on strengthening relationships with existing global institutional investors, while expanding the firm's client base through new partnerships. Her efforts will play a key role in driving capital growth across NorthWaII's core strategies, which include Opportunistic Credit, Senior Lending, Asset-Backed Lending and Legal Assets.
Shannon brings with her over 15 years of experience in business development roles at leading financial institutions. Most recently as Head of EMEA Business Development at Mudrick Capital Management, she led the firm's business development, sales and client services across EMEA and APAC. Shannon was pivotal in growing Mudrick's London office, spearheading campaigns focused on distressed and stressed credit strategies. Prior to this, Shannon held senior roles at Barclays and Morgan Stanley, where she led capital introduction efforts across Europe.
Fabian Chrobog, Founder and Chief Investment Officer at NorthWaII Capital, said: "We are thrilled to welcome Shannon Cody to NorthWall at this exciting time for our firm. Her extensive experience in establishing long-term partnerships with investors will be crucial as we continue to expand our footprint across EMEA. Shannon will help us deepen relationships with our institutional investor base as we continue to scale our flagship credit strategies."
Shannon Cody, Head of Business Development, EMEA at NorthWaII Capital, said: "I am excited to join NorthWall and look forward to working with the team to expand our presence across the region and drive continued fundraising success."
Earlier this year NorthWaII announced the final close of its flagship North Wall European Opportunities Fund Il and associated vehicles attracting more than €640m in investor commitments, surpassing its initial €500m target and more than doubling the size of its predecessor vintage.
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