Preserving OPEX while pursuing bet-the-company litigation

Challenge: Company needed to pursue claim but preserve cash for operations

An industrial engineering company was involved in a high-value, multi-year dispute over a supplier’s alleged professional malpractice. The dispute was damaging, leading to lost customers and business, significant reputational damage and reduced cash flow and liquidity. Following an unsuccessful mediation attempt, the company initiated an AAA arbitration. The company stood to recover damages valued in the low nine figures but needed to preserve its budget for use in day-to-day operations rather than paying legal fees and expenses out of pocket.

Solution: $6 million in non-recourse funding of legal fees and expenses

The company needed capital as well as expertise, and Burford provided both, including almost $6 million to cover case-related fees and expenses. At the company’s request, Burford also introduced several potential replacement law firms when its original counsel withdrew after filing the arbitration.

The $6 million was non-recourse, not a loan: Burford’s investment did not add to the company’s debt load and would be paid back only if and when the company achieved a successful outcome in the dispute. The company would keep any excess funds recovered after paying Burford’s return. If the case was unsuccessful, the company would owe nothing to Burford or its lawyers— eliminating the cost and risk of the litigation.

Burford’s $6 million of non-recourse capital guaranteed that the company could assert its right for relief under the contract with its suppliers, without having to redirect precious operating cash to its outside lawyers.

Impact: No-risk capital to pursue claim while prioritizing the business

Able to pursue a critical recovery at no cost, the company could keep its focus on continuing to rebuild its business while it waited for its matter to resolve.