Litigation Funding Continues to Thrive In Adverse Financial Marketplace
NEW YORK, April 6 /PRNewswire/ -- Juridica Investments Limited (JIL) today announced the closing of its secondary round of financing on AIM.
The second placing raised net proceeds of approximately £33.2m ($46.79 million) for the innovative litigation funding firm. Juridica provides economic support to both corporations and law firms for complex business-to-business lawsuits in the United States as well as the UK.
"Increasingly, corporations and investors recognize third-party litigation as a powerful and unique asset class, and they clearly see a significant potential for profit," said Richard Fields, CEO of Juridica Capital Management. "As a result, our portfolio continues to grow, and we hope to invest fully our newly raised funds before the end of 2009."
The success of the initial investments allowed Juridica to pay shareholders an interim dividend of 4.6% on the initial share price of 1.00 British pounds. The firm was one of only a few companies on AIM that paid a dividend for last year.
The success of Juridica's secondary placing builds on its Initial Public Offering in December 2007 when it raised approximately £74m after expenses on AIM. The firm sought the additional funding because it achieved its initial investment aims early, with 10 separate investments involving 17 lawsuits. Most of those cases are in the U.S.
Litigation funding has arisen because companies and law firms are often unable or reluctant to bear the financial costs of financing claims. It involves third parties, such as banks, hedge funds or insurance companies, putting up money to sustain a legal claim in exchange for a guaranteed share of any award or settlement.
The impact of third-party investors like Juridica is significant both in terms of how litigation risk can now be managed by the litigants or their lawyers -- as well as its marketplace appeal during a recession.
"As an asset, litigation is attractive both during good times and bad, inasmuch as correlation to other economic factors is relatively low," said Fields, formerly a partner at major Washington, D.C.-based law firms practicing in the areas of complex litigation and dispute resolution. "The overall volume of large B-2-B cases either remains stable or typically increases in difficult economic times."
Third-party litigation financing can also provide substantial independent views on economics and merits as part of due diligence. Expert teams are retained in relevant jurisdictions to assist Juridica with case assessment and evaluation. As a result, the investment of external capital can send a powerful, deterring message to the opposing side.
Since its IPO, Juridica has invested over $100 million in 17 cases. Its current portfolio includes antitrust cases, patent rights, property damage, insurance subrogation, claims against sovereign powers, shareholder disputes, and other statutory claims.
Richard Fields is available to discuss this latest fundraising and related issues. Please contact Amy Cantu at 202-973-1325 or acantu@levick.com
About Juridica Investments Ltd.
Juridica Investments Limited is a limited liability, closed-ended investment company registered in Guernsey. The Company commenced trading on the Alternative Investment Market (AIM), a market operated by the London Stock Exchange, on December 21, 2007, raising £80m in its first year. The ticker is JIL.
Juridica invests in a wide variety of arbitration and litigation claims worldwide. Their objective is to build a diversified portfolio in claims and to provide shareholders with attractive dividends and capital growth by investing directly and indirectly in litigation and arbitration cases, claims, and disputes. Current investment focus is large commercial litigation including, but not limited to, antitrust, insurance, contract disputes, and non-class action shareholder disputes.
The Company appointed Juridica Capital Management Limited, a new company limited by shares and incorporated in Guernsey, as its exclusive investment manager to locate, select and manage direct and indirect investments by the Company in cases, claims and disputes.
Juridica is governed by an Independent Board of Directors chaired by Lord Dan Brennan QC. Lord Brennan is a former Chairman of the Bar of England and Wales.
