Litigation funder Bentham IMF moves into portfolio funding
Litigation funder Bentham IMF has announced that it has assembled a portfolio of dispute-based investments with a group of law firms around the US and in London in a move away from purely single matter funding for the New York-headquartered company.
Bentham has traditionally committed capital to single matters based on specific case merits and prospects for financial recovery. Now it has also begun to provide funding to law firms based on their existing track record and ‘basket’ or portfolio of cases, as well as to support their overall mission in particular areas of client representation.
In the past year, Bentham has provided over $30 million in funding deals with seven separate law firms, backing more than 60 cases involving disputes in intellectual property, insurance coverage, entertainment, health care, contracts and other areas, including human rights and whistleblower cases. The law firms – located in New York, Washington, New Jersey, Los Angeles and London – include two winners of the National Law Journal’s Litigation Boutiques Hot List.
“We haven’t wavered from the discipline we apply to evaluating individual disputes,” explained Bentham’s chief investment officer Ralph Sutton. “However, with our strong performance over the past several years, we’ve established close relationships with a number of smaller, top-tier firms with whom we are partnering. We view our portfolio approach as a way of providing strategic capital to elite litigation specialists. We help them recruit talent, launch a promising new litigation specialty, or provide a safety net for their own risks, allowing them to pursue new cases. In short, we help incubate firms and practice groups.”
The law firms that have benefitted from Bentham’s funding have used the capital for over 60 cases, including about 40% for insurance coverage matters, and about 25% each for commercial disputes and intellectual property cases. Another 10% are qui tam whistleblower cases involving health care fraud and other claims.
Washington, DC-based Weisbrod, Matteis and Copley is one of the firms working with Bentham. Among its more noteworthy matters was the recovery of an oil painting by German artist Max Liebermann, originally stolen by the Nazis in the 1930s. The painting was discovered by German authorities in 2012 in the apartment of an infamous Nazi art dealer’s son.
Entitled “Two Riders on a Beach,” the Liebermann painting was recovered following a suit brought by the Republic of Germany on behalf of the painting’s rightful owners – it recently sold at auction in London for a record £1.9 million pounds.
Bentham is also working closely with Weisbrod Matteis in funding a large series of insurance coverage cases involving property damage claims.
“Bentham has strengthened our risk-sharing advocacy for clients, and the company is aligned with the long-term success of our firm,” said Stephen Weisbrod, founding partner of Weisbrod Matteis. The firm was named to The National Law Journal’s Litigation Boutiques Hot List in 2014 and recently profiled by Corporate Counsel magazine for “its dogged, determined approach to complex litigation – and its ability to get stellar results.”
“Bentham’s funding terms have consistently been fair and its investment team – which includes former practicing trial lawyers – is sophisticated and extremely knowledgeable,” Mr. Weisbrod added. “In addition to helping support our growing caseload, Bentham has been a terrific source of case referrals for our firm.”
In another example, Bentham recently backed business litigator Jeffrey F. Ryan, principal of a firm based in Redwood City, CA. Mr. Ryan called on Bentham to cover a large tranche of expenses tied to a portfolio of qui tam cases he was litigating. In one key case – alleging massive overcharges to the federal government by a major technology provider – Mr. Ryan’s whistleblower client helped the government secure a $75 million settlement.
“Unfortunately, we had to wage a very costly litigation against our former co-counsel in the midst of our whistleblower case and Bentham provided a critical lifeline to cover nearly $1 million in expenses that could have torpedoed our practice,” Mr. Ryan said. “Their support, coming at such a crucial time, ensured that we could stay totally focused on the whistleblower matter before us, as well as a related case with an even larger damage projection.”
“Banks and conventional financing sources don’t understand the level of up-front capital needed to handle a large, complex litigation effort, one that could take years to complete,” Mr. Ryan said. “With its impressive history of funding civil justice cases in the US and Australia, Bentham’s funding gave us the flexibility to pursue our most important cases based on their merits.”