Worked example

Monetizing a claim to time cash flows

Company challenge

A retail company with a global footprint was a claimant in an ongoing lawsuit involving price fixing by suppliers. The company had already expended many millions of dollars on legal fees and expenses and was confident that the claim would ultimately return hundreds of millions in recoveries to the business. However, the timing of the recoveries remained unclear, some risk of loss remained and traditional lenders would not recognize the claim as an asset. Meanwhile, the company sought a significant cash injection as soon as possible: Facing a fast-changing and competitive retail climate, the company needed to invest in immediate store updates to boost sales and profits.

Burford legal finance solution

Burford was able to monetize a portion of the pending claim and advanced the company $75 million in cash immediately upon signing deal documents. The $75 million advance was provided on a non-recourse basis, meaning that only upon a successful resolution of the claim would Burford earn its return, while the company preserved significant upside. In case of loss, the company would owe Burford nothing, protecting it against downside risk—and protecting against collection risk associated with defendant insolvency.

Legal finance impact

The company used the immediate cash injection associated with the monetization to invest $75 million in its stores, boosting its business performance by increasing its sales and profitability.

This is a hypothetical example of one type of matter Burford routinely encounters and finances. It is meant to help demonstrate different use scenarios for our capital and the associated quantitative benefits.