The difficulty in valuing a given litigation is well known, but it is important to recognize the three different sources of uncertainty. First is the basic question of the amount in controversy and all the ways that the judge, jury … Continue reading
Introduction Many lawsuit funding deals involve the plaintiff assigning a portion of his or her future recovery to a funder in exchange for an upfront investment. Investors who bet on the outcome of litigation make money by collecting from the … Continue reading
Posts will resume as usual on Monday, August 12th.
The lack of a vibrant reputation market means that Plaintiffs should do significant due diligence on any potential funder. Plaintiffs need to attempt to assess: a) the funder’s financial capacity to make good on its funding promises, as funders do … Continue reading
Reputation markets can play a large and crucial role in the healthy functioning of a litigation finance market. One way reputation markets can emerge, given the current secrecy that characterizes this market, is through brokers, who by their repeat play … Continue reading
Richard Painter has given very useful guidance on the the interaction of securities laws and a possible litigation funding marketplace based on litigation proceed rights. Because of the breadth of topics covered, we decided it would be useful to tie it all … Continue reading
Q: If the only investors are specialized litigation finance firms, are there any issues regarding investment advisor status or suitability (for either the funder or the law firm)? If not, when if ever are such issues implicated? Does it matter … Continue reading
Q: The draft model contract currently heavily restricts the transfer of the litigation proceed rights; transferees have to join the Agreement, for example. What regulations are implicated if transfer restrictions are eased, to facilitate secondary markets in litigation proceed rights? … Continue reading
Q: If a law firm introduces a funder and a plaintiff who engage in litigation proceed rights financing, is the law firm a broker/dealer? If the answer is, “it depends”, what does it depend on? What bright lines can be … Continue reading
Q: Litigation Proceed Rights can be sold in a private placement, exempt from registration requirements under federal securities laws. What other securities or commodities laws might still apply? A: First, there are anti-fraud provisions in both federal and state securities … Continue reading
