Category Archives: Special Features
Swimming with Sharks: Is the Consumer Legal Funding Industry Getting a Bad Rap?
In a recent op-ed for The Irrelevant Investor titled “The Sharks Are Circling,” Michael Batnick, Director of Research at Ritholtz Wealth Management, argues that Wall Street’s recent capital influx into the world of Consumer Legal Funding signals that the industry is ripe for regulation. After pointing to a recent NY Times article on the finance sector’s investment in the Consumer Legal Funding industry, Batnick proposes a rather provocative question: “Why do they need to be here in the first place?”
The answer is obvious, and one that Batnick himself acknowledges; that being the wider investment community’s thirst for returns which aren’t correlated with traditional markets. However, Batnick goes on to make a case that others have made — that the industry ‘preys on the vulnerable’ in order to reap hefty profits. Is he correct in his characterization? Are Consumer Legal Funders – and by extension the hedge funds and Wall Street investors who are financing them – sharks in the water? Or is the entire industry merely getting a bad rap?
Transparency is Key to the Benefits of Plaintiff Litigation Funding
The following is a contributed piece from Violette Bishai of Momentum Funding
The Plaintiff Litigation Funding industry has recently found itself in the midst of some debate. Christian Searcy, an advocate for the protection of consumer rights, and past president of the International Academy of Trial Lawyers, recognizes the need for education surrounding the industry. Searcy, who has become, one of the most vigilant fighters for families of wrongfully killed victims, stresses that the right solutions do exist and attorneys and funding companies need to advocate and educate prior to making decisions in the clients’ best interest.
Why Do Ticket Resellers and Consumer Legal Funders Exist? Because Springsteen Cares and “XYZ Insurance” Doesn’t
The following piece was contributed by Eric Schuller, President of the Alliance for Responsible Consumer Legal Funding (ARC).
I buy a ticket to see Bruce Springsteen for $150 and then resell it for $350. Why am I able to do this? Because the face value of a Springsteen ticket is artificially low. Bruce could set a higher price, but chooses not to. It’s a noble yet futile effort on his part to go easy on his fans. I say “futile” because ultimately the market will adjust the price to reflect its true value. As long as there are folks lining up to pay considerably more than face value, third party ticket resellers will remain incentivized to take advantage of the economic opportunity presented therein.
Probate Funding: A Useful Option for So Many
The following is a contributed article by Steven D. Schroeder, Esq., General Counsel/Sr. Vice President at Inheritance Funding Company, Inc. since 2004.
There have been a few recent articles written on the topic of Probate Advances.[i] Probate Advances are available because a handful of companies are willing to assume a risk and provide funding in return for a partial assignment of a beneficiary’s interest in an Estate, and to a lesser extent Trust Proceedings. One critic has conflated Assignments to Loans without a fair analysis of the many differences between the two legal maxims.[ii] This 4-part series expands upon those differences and provides a legal and practical perspective as to why Probate Advances are a useful option for so many.
The Huon Case Explained
The following is a contributed piece from a Commercial Litigation Funder in response to recent publicity over the Huon Case.
It is peculiar that reference continues to be made to the Huon Corporation case in the context of “high-profile class actions” and the distribution of class action settlements, as this case was not progressed as a class action or a representative proceeding.
TownCenter Partners Looks to Purchase Litigation Funders
Probate Funding: A Useful Option for So Many (Part 4 of 4)
The following is Part 4 of our 4-Part series on Probate Funding by Steven D. Schroeder, Esq., General Counsel/Sr. Vice President at Inheritance Funding Company, Inc. since 2004. Parts 1, 2 & 3 can be found here, here and here.
What are the Risks in Probate Funding?
Similar to California Probate Code 11604, (formerly Cal. Probate Code 1021.1), the Legislature, in enacting Probate Code 11604.5, has specifically indicated that Assignments relative to Probate Advances will not be set aside unless it is clear that the consideration paid is “grossly unreasonable”, at the time the transaction was executed. In fact, the Probate Court can presume the validity of an Assignment, in the absence of any objection raised or evidence submitted to the contrary. See Lynch v. Cox. (1978) 83 Cal. App. 3rd 296, 147 Cal. Rptr. 861.
A Show of Industry Strength at the IMN Litigation Finance Conference
On Wednesday May 30th, funders, attorneys and investment professionals convened at the Union League Club in Manhattan for IMN’s inaugural litigation finance conference. The standing-room only crowd illustrated the growing prominence of an industry that has rightfully come of age, and signaled to all in attendance that future litigation finance-focused events will soon be the norm.
Probate Funding: A Useful Option for So Many (Part 3 of 4)
The following is Part 3 of our 4-Part series on Probate Funding by Steven D. Schroeder, Esq., General Counsel/Sr. Vice President at Inheritance Funding Company, Inc. since 2004. You can find Parts 1 & 2 here and here.
Probate Assignments are Adequately Regulated in California
In California, it is the exclusive jurisdiction of the Probate Court to determine entitlement for distribution, Cal. Probate Code §§11700-11705. Probate Courts may also apply equitable principles in fashioning remedies and granting relief in proceedings otherwise within its jurisdiction. Estate of Kraus (2010) 184 Cal. App 4th 103, 114, 108 Cal. Rptr. 3d 760, 768. Thus, even without a specific statute addressing assignments, Probate Courts in California, as well as other jurisdictions, have conducted oversight over the propriety of Assignments in Probate. See In Re: Michels’s Estate 63 P. 2d 333, 334 (Cal. Dist. Ct. App. 1936).
Probate Funding: A Useful Option for So Many (Part 2 of 4)
The following is Part 2 of our 4-Part series on Probate Funding by Steven D. Schroeder, Esq., General Counsel/Sr. Vice President at Inheritance Funding Company, Inc. since 2004. Part 1 can be found here.
Comparing Assignments with Loans: Apples Are Not Oranges
As previously stated, there has been some recent criticism of the companies engaged in Probate funding.[1] An Article entitled: “Probate Lending” started and ended with the premise that Probate Assignments are in fact disguised loans and should be regulated as such. Despite the predetermined conclusion by one author, in fact, the law treats Assignments and Loans quite differently and those distinctions are significant.[2]
