Litigation Finance and Alternative Funding
Our Litigation Finance and Alternative Funding Group assists clients in obtaining funding for expensive litigation on a non-recourse basis and putting them on competitive financial footing with a deep-pocketed opponent.
This team helps to secure financing of the litigation of a single claim or a client’s portfolio of claims. Such financing may advance a client’s overall litigation management strategy and, for businesses and other entities, may minimize what many view as the unattractive accounting effects of litigation expenditures on income statements.
Our experience with litigation funding has put us at the forefront of this burgeoning market. Our relationships with well-capitalized litigation funders uniquely enable us to assist our clients with advantageous funding arrangements, then represent them in the litigation consistent with the arrangements.
Recognized by the Financial Times December 2017 at its Innovative Lawyers Awards for North America for our work in this area, Stevens & Lee has helped clients negotiate and close multi-million dollar agreements with litigation funders pertaining to business litigation and insolvency claims. Our work has assisted clients who are seeking the following:
- To assert claims against deep-pocketed opponents
- To assert claims for clients with no capital to afford such litigation
- To assert claims without reducing our clients’ income or diverting their capital
- Funding for an ongoing litigation program
- An alternative to the adverse accounting treatment that can arise from the pursuit of a claim
- Monetizing a portion of an existing claim, in addition to funding the pursuit of the claim itself
In a first-of-its-kind transaction, in 2016 we closed the $26.2 million MagCorp sale to Gerchen Keller Capital, LLC (now part of Burford Capital), at the time the largest capital provider in litigation finance, of the right to receive a portion of net recoveries from a bankruptcy trustee’s $213 million judgment against The Renco Group, Inc. and Ira L. Rennert after a jury trial. The transaction closed while the judgment was on appeal to the U.S. Court of Appeals for the Second Circuit. No known 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).
This transaction was covered by The American Lawyer, Crain’s, Bankruptcy Law360 and other media. Mr. Robinson and Mr. Kajon co-authored an article on this transaction, “Trustee Uses Litigation Finance to Secure Creditor Recoveries,” in the Journal of Corporate Renewal.
Mr. Kajon has spoken several times on litigation finance: “Litigation Finance as a Way to Level the Playing Field: The Boutique Law Firm Roundtable,” General Counsel Forum on Litigation Finance, New York City, NY, May 1, 2019; “Financial and Ethical Aspects of Litigation Funding,” Panelist, District of Connecticut Bench-Bar Conference, Portland, CT, October 26, 2018; “Case Studies: MagCorp Bankruptcy and IP Litigation,” The Inaugural LF Dealmakers Forum, New York City, September 17, 2018; “Legal Perspectives: How Can Litigation Finance Best Be Utilized by Law Firms and General Counsels?” IMN’s Litigation Finance Conference, New York City, May 30, 2018. He was also named among 10 Advisors to the Legal Finance Industry by Lawdragon.
Mr. Robinson recently authored an article on preservation of the attorney work product doctrine’s protections in the litigation finance context entitled, “Protecting Privilege in Litigation Financing Negotiations,” Law360, March 1, 2018. And in 2017, Mr. Robinson and Daniel B. Huyett co-authored an article on litigation finance, “Litigation Finance – A Useful and Important Option for Clients in Commercial Litigation,” Law360, December 11, 2017. Mr. Robinson was also quoted extensively in the cover story for the December 2018 ABA Journal, available here.
The Litigation Finance and Alternative Funding Group includes lawyers from the firm’s Bankruptcy and Financial Restructuring Department and Litigation Department, and draws from the expertise of professionals across our multidisciplinary platform.