An update on firms that invest in lawsuits of companies

The New York Times, May 1, 2012 at B3, ran a piece on litigation financing. It mentions BlackRobe Capital, Fulbrook Management, and Bentham Capital, all of which investment funds started in 2011. BlackRobe’s founder is John Coffey, formerly a litigation partner at Bernstein Litowitz. Further, the litigation finance team at Credit Suisse, one of the pioneers in the field, split off to form Parabellum Capital. As a side note from an online site, “parabellum” means “a type of semiautomatic pistol or machine-gun; also called Luger”.

The funds under management by two of the largest players, Burford Capital and Juridica Capital Management, have reached nearly a half billion dollars ($300 million and about $200 million, respectively.). The article rehearses the arguments against investments by third parties in litigation and the arguments in favor: it lets companies invest in an asset, a legal claim.