Whilst litigation funders are most often the ones financing plaintiffs’ claims, occasionally they may find themselves on the receiving end of litigation and having to fight their own cases. In an update to an ongoing dispute in California, two litigation funders have successfully won a dismissal of all claims against them regarding allegations that they helped a now-defunct law firm engage in fraud.
Does Consumer Legal Funding Put Consumers in Debt?
Whilst litigation funders are most often the ones financing plaintiffs’ claims, occasionally they may find themselves on the receiving end of litigation and having to fight their own cases. In an update to an ongoing dispute in California, two litigation funders have successfully won a dismissal of all claims against them regarding allegations that they helped a now-defunct law firm engage in fraud.
An article by Bloomberg Law outlines US Bankruptcy Judge Barry Russell’s decision to dismiss the claims brought against Counsel Financial Services and California Attorney Lending II, and their alleged part-owner Joseph D. DiNardo. The claims had been brought by Elissa D. Miller, a trustee for the bankrupt law firm Girardi Keese, alleging that the funders and DiNardo had been partners or insiders of Girardi Keese and should be held liable.
Judge Russell ruled that res judicata resolved the claims and that he would not allow any additional amendments, going on to tell the claimant that, “there’s no way in the world you’re ever going to prove they’re partners. It just isn’t there.” The defendant’s counsel, Larry Hutcher, praised the judge’s decision and highlighted that the court’s ruling made it clear that Counsel Financial had acted properly.
