Challenge: Cash-strapped company risked settling prematurely
A UK-based private equity firm was seeking recoveries in multiple litigation and arbitration matters relating to a dispute with its former joint venture partner. The defendant was litigious and had considerable resources—presenting the private equity firm with a protracted legal battle and likely enforcement challenges to any eventual settlement or award. As legal bills mounted, the company recognized that it would be unable to adequately pursue its claim over the long haul—but it did not want to be forced to accept a premature settlement offer.
Solution: $10 million facility to pay legal fees globally
Burford provided $10 million across a portfolio of ongoing and future commercial litigations and arbitrations in Europe and the US. The company used the capital to pay ongoing legal fees and avoid incurring additional expenses during its protracted claim. The private equity firm preserved significant upside in an eventual settlement, without added cost or risk to the company.
Given the non-recourse nature of Burford’s financing, the private equity firm would repay Burford its investment plus a return if and only if Burford enforced any successful judgment or award against the defendant, or from the proceeds of the sale of the investee company—and the company would keep any excess funds recovered after paying Burford’s return. If the matters were unsuccessful, the company would owe Burford nothing and would have paid nothing out of pocket to pursue its cases.
Impact: Client avoided early settlement and worked with counsel of choice
The company avoided being forced into early settlements—and, able to work with its counsel of choice, had already won two awards against the defendant within a year of securing finance.