Pricing Legal Claims Part I: The Valuation Challenge

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This essay should be cited as Maya Steinitz, How Much is that Lawsuit in the Window? Pricing Legal Claims, Vand. L. Rev. (forthcoming, 2013) available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2310244

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

Creating and Perfecting Security Interests in a Claim: Part I, Purpose and Creation

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We have asked Max Volsky to write about how to create and perfect a security interest in litigation proceeds. This is Part I of his response.

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

The Model Contract and the Securities Laws, Part IV

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We have posed some questions on the implications of using securities tied to litigation proceeds to Prof. Painter, an expert in securities regulation and the author of one of the earliest works on litigation finance.  This post is the last in that series.

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

The Model Contract and the Securities Laws Part III

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We have posed some questions on the implications of using securities tied to litigation proceeds to Prof. Painter, an expert in securities regulation and the author of one of the earliest works on litigation finance.  This post is number three of four in that series.

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

The Model Contract and the Securities Laws, Part II

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We have posed some questions on the implications of using securities tied to litigation proceeds to Prof. Painter, an expert in securities regulation and the author of one of the earliest works on litigation finance.  This post is number two of four in that series.

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

The Model Contract and the Securities Laws, Part 1

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We have posed some questions on the implications of using securities tied to litigation proceeds to Prof. Painter, an expert in securities regulation and the author of one of the earliest works on litigation finance.  Over the next two weeks we will post our questions and his answers.

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

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