A mid-sized publicly-traded company is facing significant margin pressure and has asked its corporate departments to manage costs accordingly. The company’s GC has identified a number of commercial litigation and arbitration matters which could result in aggregate proceeds over $200 million, but the CFO has pushed back: It’s unclear when the matters will resolve, and the GC’s counsel of choice are not willing to share risk or reduce their hourly fees beyond a token discount for good clients—creating undesirable uncertainty in the company’s litigation spend.
Burford legal finance solution
Burford provides $20 million of portfolio financing to offset the company’s legal fees across the pool of matters, enabling the company to pursue its recovery program without significant out-of-pocket spend. Under the terms of the agreement, Burford’s investment is returned on a first-dollar basis, plus a multiple of the invested amount. Because the investment is non-recourse, the company bears no risk of loss in an unsuccessful outcome. The portfolio financing arrangement allows the company to pursue its recovery program without adding significant cost or risk to the corporate balance sheet.
Legal finance impact
Over the following years, the company recovers $200 million across its pool of matters, remitting a portion to Burford according to the negotiated investment terms. By the end of the investment, Burford has earned $60 million—meaning that the portfolio has generated $140 million in proceeds to the company, with minimal downside risk and without adding materially to its legal budget.