Lawsuit funding companies have routinely filed claims as creditors in tort plaintiffs' bankruptcy actions when the debtor has failed to repay litigation funding advances. Whether bankruptcy courts will enforce lawsuit funding agreements depends on the applicable state law.
CT Bankruptcy Court Invalidates Lawsuit Funding Agreement
Lawsuit funding companies have routinely filed claims as creditors in tort plaintiffs' bankruptcy actions when the debtor has failed to repay litigation funding advances. Whether bankruptcy courts will enforce lawsuit funding agreements depends on the applicable state law.
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