Litigation Finance

Litigation financing is risky and may result in a total loss of investment. Further: 

• There is a risk the lawsuit is dismissed, does not settle, or loses at trial or on appeal resulting in a total loss for investors. 

• There is a risk the lawsuit results in a nominal recovery insufficient to pay back investors and resulting in partial or total loss. 

• Litigation is risky and there is no set time frame in which a lawsuit must be settled or go to trial.  To that end, there is a risk the lawsuit takes years to conclude resulting in an uncertain and highly variable time horizon. 

• There is a risk the lawsuit is dismissed at the motion to dismiss stage resulting in a total loss for investors. 

• There is a risk the lawsuit is dismissed on summary judgment resulting in a total loss for investors. 

• There is a risk the plaintiff prevails at trial but loses on appeal resulting in a total loss for investors. 

• In the event that the claim survives a motion to dismiss, but there is no successful recovery in the litigation thereafter, the associated investments will no longer have value and will become non-transferable.

• Investing in a single litigation offering may be more risky than investing in multiple matters. Since these arrangements are secured only against the outcome of one litigation, the funders bear the risk in the event the claims are unsuccessful. 

• There is a risk there are more senior creditors who will make a claim to the litigation proceeds. 

• There is a risk the law firm litigating the matter withdraws as counsel. 

• There is a risk the law firm litigating the matter is sued for reasons separate and apart from the litigation which may adversely affect the litigation. 

*This is not meant to be an exhaustive list of risks.  Investors should conduct their own diligence on each investment opportunity.  In the case of litigation financing, investors should read all pleadings and make their own determination as to whether the case will be successful. Litigation financing is risky and can result in partial or total loss of principal.  Investing in a single case presents more of a risk than traditional litigation financing because risk is not diversified across multiple litigations and, instead, concentrated into an individual litigation. Do your own research. Invest at your own risk.