Third-Party Litigation Funding in Bankruptcy Cases: Recent Trends and Key Issues

Necessary Tool, TPLF as "Insider," Standing Issues, Applicable Non-Bankruptcy Law Restrictions, Fiduciary Duty Issues

This program has been cancelled

A live 90-minute CLE webinar with interactive Q&A


Tuesday, September 24, 2019 (in 4 days)

1:00pm-2:30pm EDT, 10:00am-11:30am PDT


This CLE webinar will provide bankruptcy and non-bankruptcy counsel with an overview of the rise of commercial third-party litigation funding (TPLF) in bankruptcy cases and provide practical guidance on the key issues it presents.

Description

In bankruptcy, TPLF is a much-discussed and growing area of commercial finance. The funder, which is neither a party to a legal claim nor legal counsel, provides capital to a party to pursue a legal claim secured by a litigation asset. The transaction is often structured to be non-recourse and repayment is contingent upon a successful outcome of the underlying legal claim.

A plaintiff, or its counsel, can obtain financing to unlock the value of commercial litigation that would not otherwise be pursued because of costs. In exchange, the TPLF investor receives an attractive return on its investment in a low-yielding opportunity climate. A distressed company with an affirmative claim may use litigation financing to monetize an existing lawsuit, thus increasing its liquidity, or to help finance an insolvency or wind-down process.

But these types of arrangements raise a host of unique legal and ethical issues that need to be considered. Among them, how to share confidential information with a funder without waiving the attorney-client and/or work product privilege. Also, how much control a funder can have in the funded matter, and the permissibility of funding agreements under various states’ laws.

Listen as our authoritative panel of bankruptcy practitioners provides an overview of the rise of TPLF in bankruptcy cases and offers practical guidance on the key issues it presents, including applicable non-bankruptcy law restrictions, disclosure issues, fiduciary duty issues, discovery issues related to TPLF, and more in this growing and potentially lucrative area.

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Outline

  1. Overview
  2. TPLF and funders in the bankruptcy context
    1. Pre-bankruptcy TPLF as an investor
    2. Post-bankruptcy TPLF as funding sources for trustees/DIPs or buyer of litigation claims
  3. Historical context
  4. Key issues
    1. Necessary tool
    2. TPLF as insider
    3. Applicable non-bankruptcy law restrictions
    4. Fiduciary duty issues
    5. Misc. issues
  5. Best practices and practical considerations

Benefits

The panel will review these and other relevant topics:

  • How does the mechanism of TPLF work?
  • What is the structure of these mechanisms?
  • What disclosure obligations apply to TPLF in bankruptcy?
  • What are the ethical implications of TPLF?
  • What are the most recent cases and decisions?

Faculty

Cohen, Joel
Joel E. Cohen

Managing Director
Stout Risius Ross

Mr. Cohen has over 17 years of experience in the dispute, forensic and insolvency practice areas, most specifically...  |  Read More

Epstein, Ken
Ken Epstein

Investment Manager, Legal Counsel
Bentham IMF

Mr. Epstein is responsible for leading the company’s investments in bankruptcy and insolvency-related matters. He...  |  Read More

Reece, Cathy
Cathy L. Reece

Director
Fennemore Craig

Ms. Reece Chairs the firm’s Financial Restructuring, Bankruptcy and Creditors' Rights Practice Group. She has...  |  Read More