Litigation Finance and Alternative Funding

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Litigation Finance and Alternative Funding

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Our Litigation Finance and Alternative Funding Group achieves end-to-end solutions in this emerging marketplace, and helps our clients advance and protect their rights as plaintiffs and defendants in judicial and arbitral disputes pending across the U.S. As with many law firms, our firm has agreed to engagements involving the alternative fee agreements that have become relatively common over the past decade.

Stevens & Lee lawyers have been at the forefront of the alternative funding movement, assisting clients with actual litigation financing arrangements, then acting for those clients consistent with the arrangements. This has included obtaining market-tested terms from competing funders.

Examples of our work include assisting clients:

  • Seeking to assert claims without committing capital
  • Obtaining funding for part or all of the fees and costs connected with a specific claim
  • In circumstances that make it difficult or impossible to pursue or advance claims or to defend against them as rigorously as necessary, whether due to short-term or structural financial circumstances
  • With a need to hedge, off-set, better rationalize, or managing claims costs and treatment for reasons germane to their businesses or in other unique circumstances

We have negotiated and helped clients close multi-million dollar agreements with litigation funders pertaining to insolvency and other commercial litigation claims. As a result, our group has extensive contacts in the litigation finance industry.

The Litigation Finance and Alternative Funding Group consists of attorneys from the firm’s Bankruptcy and Financial Restructuring and Litigation Groups, and involves others across the Stevens & Lee/Griffin platform, as appropriate. In insolvency situations, we represent creditors, bankruptcy trustees, debtors in possession and creditors’ committees. We currently represent several hedge funds in business litigation.

Representative Recent Engagement

Due to their subject matter, litigation funding arrangements ordinarily are not disclosed publicly, or as relevant in a specific dispute. We respect and maintain those confidences.

In a matter publicized due to its particular facts, however, we recently closed a $26.2 million sale to Gerchen Keller Capital, LLC, the largest capital provider in the litigation finance industry, of the right to receive a portion of net recoveries on account of a bankruptcy trustee’s $213 million judgment against The Renco Group, Inc. and Ira L. Rennert after a jury trial, where the judgment is currently on appeal to the Court of Appeals for the Second Circuit.

Gerchen Keller and the firm’s client believe that this is a first of its kind transaction, and that no bankruptcy trustee or debtor in possession has ever sold an interest in the right to receive litigation recoveries (although litigation funders sometimes provide post-confirmation financing to plan trustees on terms that are not publicly disclosed). In addition, we structured the transaction as a section 363 bankruptcy sale, rather than a section 364 financing, so that our client could run an auction process to maximize value for creditors.

Our team overcame objections filed by the judgment debtors and certain of the Debtors’ noteholders to both the bidding procedures and the sale itself. Thereafter, our team was successful in opposing the noteholders’ motion for a stay pending their appeal of the sale order in the District Court for the Southern District of New York. This transaction was covered by The American Lawyer, Crain’s, Bankruptcy Law360 and other media.

Angelo_Jason

Jason D. Angelo

Associate

jda@stevenslee.com

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Wilmington 302.425.3311

Kajon_Nick

Nicholas F. Kajon

Shareholder

nfk@stevenslee.com

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New York 212.537.0403

McSorley_Suzanne

Suzanne M. McSorley

Shareholder

smcs@stevenslee.com

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Princeton 609.987.6663

Pourakis_Dean

Constantine D. Pourakis

Shareholder

cp@stevenslee.com

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New York 212.537.0409

Robinson_Eric

Eric M. Robinson

Shareholder

emr@stevenslee.com

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New York 212.537.0408