The Second Circuit Court of Appeals sustained a $213 million judgment against Ira Rennert relating to the bankruptcy of his company Magnesium Corp. of America. While the appeal was pending last year, the trustee auctioned off part of the judgment.
Gerchen Keller and Burford Capital
Gerchen Keller won the auction, paying $26.2 million for the right to the first $50 million of recovery. Burford has since acquired Gerchen Keller for $175 million last December. Burford will now be able to recover as the Second Circuit affirmed the 2015 jury verdict against Rennert. The jury found Ira fraudulently conveyed $100 million from Magnesium Corp. prior to bankruptcy proceedings initiated in 2001.
Rennert is now liable for that amount plus interest in order to repay Magnesium Corp.’s creditors.
Read full article at Forbes.com
Reviewed by Marc Lesnick.
Hong Kong and Singapore are in the process of amending laws which will allow litigation funding. The proposed amendments will allow third-parties to fund arbitrations seated in these cities. Despite the fact that Singapore and Hong Kong are among the top locations for arbitration globally. Their current laws prohibit litigation financing.
Litigation Funding in Hong Kong
The Hong Kong Law Reform Commission first proposed an amendment to allow third-party funding in October 2015. Over a year later, a bill to that effect was published in the Government Gazette. The bill was formally introduced in Hong Kong’s Legislative Council in January 2017 at its “first reading.” The next step is the second reading, where a vote will take place. The date has not been announced yet. But the law is expected to take effect this year.
The bill amends the Arbitration Ordinance, the current law applicable to domestic and international arbitrations in Hong Kong. The amendment provides that the laws of maintenance, champerty, and barratry will not apply to third-party funding in arbitrations. The proposed law also provides for certain standards and requirements needed to provide or access funding in these cases.
Litigation Funding in Singapore
Singapore published its amendment in the Government Gazette in February 2017. Singapore Parliament approved the law, the Civil Law (Amendment) Act 2017, in January 2017. The law will abolish maintenance and champerty laws in Singapore and permit third-party funding in certain categories of dispute resolution proceedings. The new law takes effect on March 1, 2017.
Singapore’s amendment comes with associated regulations and rules of professional conduct. The regulations provide a list of criteria third-party funders must meet in order to provide financing. One such requirement is that the third-party must be in the “principal business” of litigation funding. The regulations also set out certain categories of cases where third-party funding will be allowed. As for professional conduct, one new rule requires attorneys to disclose any funding agreements to the relevant court or tribunal. The identity of the third-party funder must also be disclosed.
Read full article at AboveTheLaw.com
Summarized and reviewed by Jim Smith.
The House Judiciary Committee recently approved the newly introduced Class Action Litigation Act of 2017. It is known that the Act was proposed by House member Bob Goodlatte (R-Va) in an attempt to provide greater protections to plaintiffs in class action cases, particularly with respect to abuses of the class action system by class counsel.
What does the Class Action Litigation Act require?
Notably, the Act would require class counsel to disclose any third-party litigation funding. The idea is that disclosure would reveal who is really driving the litigation. Though the Act has yet to be voted on by the House or the Senate but has received support from the Chamber of Commerce and other organizations.
Read full article at Jdsupra.com
Reviewed by Marc Lesnick
The Australian litigation funding giant IMF Bentham launched a $200 million investment vehicle to finance United States cases and investments. Thus Bentham invested $50 million and an unnamed hedge fund invested $150 million.
The IMF Bentham funding vehicle
The funding vehicle was raised by IMF Bentham on behalf of its U.S. subsidiary, Bentham IMF. This is IMF Bentham’s first investment vehicle. Bentham IMF’s CEO stated that the vehicle is indicative of investor confidence in litigation financing and Bentham’s position as a top company in the litigation financing industry.
View full post at LawGazette.co.uk
Reviewed by Meghan Hallinan.