How Litigation Finance Can Benefit You When Filing for Bankruptcy

Roni Elias
2 min readJan 28, 2021
How Litigation Finance Can Benefit You When Filing for Bankruptcy

Over the past decade, bankruptcy filings have dropped. To put it into perspective, there were nearly 61,000 bankruptcy filings in 2009 compared to a little over 22,000 in 2019. This trend is about to make 180, as many confront the crushing effects of the COVID-19 pandemic. In preparation for the impending filings, law firms are in full demand for bankruptcy attorneys. Third-party funding may offer a creative and viable solution for restructuring attorneys and advisors to consider throughout the bankruptcy process.

Think Beyond the Box

While some may have previously preferred more traditional financing sources, the present climate limits the number of conventional means of funding. Without sufficient funds, a claim holder’s capacity to adequately litigate claims is limited. A claim holder will almost inevitably settle for less than their claim’s worth to avoid an unpredictable court battle against a more financially able defendant. Litigation finance offers a solution. Through third-party financing, claimants are given with the resources and flexibility needed to litigate claims in their entirety. Where traditional funding options might fall short, litigation finance can fill in the gaps.

Pull From the Toolbox

Litigation funding provides claimants with a hefty toolbox.
Non-recourse. The claimant can litigate without using their own funds or placing additional assets in jeopardy. In contrast, other financing alternatives require payments throughout the processor, and sometimes after the litigation has concluded, whether or not the case offered a recovery.
Dream team counsel. The additional capital grants the claimant the tools needed to go after the ideal counsel of its choice, instead of settling for a counsel it can just afford.
De-risk risky business. Third-party funding minimizes risks in a time when claim holders cannot afford to lose. Litigation finance takes on the role of sharing and therefore diffusing the risk that claimants take on.

Future

With the aid of litigation finance, a new set of financing options is opened up to debtors. Claimants are equipped with the resources necessary to help them in their time of need.

For more information visit Town Center Partners.

Topics: Litigation finance, third-party funding, legal funding, jurisdictions

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Roni Elias

Roni leads the team at TownCenter Partners for Litigation Finance & Multifamily Assets. Over $9.5 Billion in previous recovery & managed over $520M in assets.