Law.com Subscribers SAVE 30%

Call 855-808-4530 or email [email protected] to receive your discount on a new subscription.

The Bankruptcy StrategistFeaturesBankruptcyLaw Firm FinancialsLitigation

Litigation Finance Offers Significant Benefits for Restructuring Matters

By Jeffery Lula
December 01, 2023

In today's volatile economic climate, companies need to be more creative to find ways to mitigate risk. Litigation finance is one of those out-of-the-box solutions that can provide benefits. This is particularly true in a restructuring scenario, whether that is a distressed negotiation, an in-court or out-of-court restructuring, liquidation, or a lender workout situation.

Litigation finance can be used to help parties in restructuring situations in several ways. For example:

  • Companies in a default workout situation are looking to sell assets, including legal ones.
  • Trustees or debtors want to pursue litigation with limited resources.
  • Creditors want to maximize their leverage against a distressed business.

Companies, Trustees, creditors, and lenders turn to litigation finance as an additional option to navigate restructuring and otherwise distressed situations.

For those unaware, litigation finance — also known as legal financing or third-party funding — is a practice where a third party provides capital to a party involved in a legal dispute in exchange for a portion of the potential settlement or award. In essence, litigation finance treats litigation as an asset that parties can borrow against, just like any other illiquid asset. The capital can be used to pay for the litigation itself or it can be used to de-risk or monetize a piece of the litigation.

This premium content is locked for Entertainment Law & Finance subscribers only

  • Stay current on the latest information, rulings, regulations, and trends
  • Includes practical, must-have information on copyrights, royalties, AI, and more
  • Tap into expert guidance from top entertainment lawyers and experts

For enterprise-wide or corporate acess, please contact Customer Service at [email protected] or 877-256-2473

Read These Next
Top 5 Strategies for Managing the End-of-Year Collections Frenzy Image

End of year collections are crucial for law firms because they allow them to maximize their revenue for the year, impacting profitability, partner distributions and bonus calculations by ensuring outstanding invoices are paid before the year closes, which is especially important for meeting financial targets and managing cash flow throughout the firm.

The Self-Service Buyer Is On the Rise Image

Law firms and companies in the professional services space must recognize that clients are conducting extensive online research before making contact. Prospective buyers are no longer waiting for meetings with partners or business development professionals to understand the firm's offerings. Instead, they are seeking out information on their own, and they want to do it quickly and efficiently.

Should Large Law Firms Penalize RTO Rebels or Explore Alternatives? Image

Through a balanced approach that combines incentives with accountability, firms can navigate the complexities of returning to the office while maintaining productivity and morale.

Sink or Swim: The Evolving State of Law Firm Administrative Support Image

The paradigm of legal administrative support within law firms has undergone a remarkable transformation over the last decade. But this begs the question: are the changes to administrative support successful, and do law firms feel they are sufficiently prepared to meet future business needs?

Tax Treatment of Judgments and Settlements Image

Counsel should include in its analysis of a case the taxability of the anticipated and sought after damages as the tax effect could be substantial.