How is portfolio funding valuable during liquidation? One case study may help explain.
An LFJ Conversation with Michael Kelley, Partner, Parker Poe
How is portfolio funding valuable during liquidation? One case study may help explain.
LCM details that the case in question involves the liquidation of a trading entity that was part of a group of construction and development businesses. The complexities of the liquidation combined with accusations of misconduct led to the liquidator spending a disproportionate amount of time assisting with the ASIC investigation, and being largely unfunded.
By entering a portfolio funding arrangement with a legal funder, non-recourse funds are provided. The claims themselves are cross-collateralized, lowering the funder’s risk. This type of funding supports the pursuit of all meritorious claims—not just the most lucrative few.
Ultimately, portfolio funding can increase the size of recoveries in a liquidation case while ensuring that funding is priced fairly and all claims are followed to completion.
