Challenge: Fortune 100 didn't want to wait to access capital tied up in claim
A US-based Fortune 100 company with a global footprint was pursuing a high-stakes litigation claim. The case had strong merits and was worth hundreds of millions of dollars but was in a relatively early stage and was expected to take two or more years to resolve. Until then, the company couldn’t recognize either the litigation value as an intangible asset or the expected future cash value of the litigation. The company did not need funding to pay for legal fees for the case, but it did want to accelerate into the current year a portion of the cash that it expected would result from a successful litigation outcome.
Solution: $75 million advance to turn illiquid asset into working capital
Burford provided $75 million in cash to the company at year end. If and when the company won the case and collected cash damages, the company would pay the $75 million plus a return to Burford and retain the expected significant remaining recovery from the case. In the meantime, the company could use the $75 million in working capital for any corporate purpose, allowing it to invest in growth, use the cash to defend unrelated litigation or any other business need.
Burford’s $75 million of non-recourse capital delivered an accelerated and guaranteed financial result ahead of the resolution of the case. This “monetization” was a complement to the client’s existing full contingency arrangement with its outside law firm resulting in the company simultaneously financing the cost of pursuing the high-value claim and generating significant liquidity for the company—all with no downside risk. If the case lost, the company would keep the $75 million in financing from Burford and have expended no legal fees to litigate the case.
Impact: Immediate cash infusion to reduce opportunity cost and increase liquidity
Zero-cost pursuit of litigation and an immediate $75 million increase in liquidity—reducing the company’s opportunity cost and increasing its liquidity and growth trajectory.