Frankfurt-based litigation financing company LF Legal Finance SE has launched a new product: Legal Finance now also participates in legal claims that are not focused on payment but, for example, on the transfer of real estate or company shares.
Until now, Legal Finance, like most litigation financiers, has specialised in payment claims where a variable profit share was agreed. Depending on the nature and risk of the litigation being funded, it is common in the market for the share of the funding to be between 20% and 50%, and in individual cases more or less, depending on the nature and risk profile of the litigation.
If the case is won, the litigation financing company usually receives the money when the plaintiff is paid. The litigation financier is secured by an assignment and an irrevocable instruction to the lawyer.
With immediate effect, LF Legal Finance SE, e.g. through its subsidiary Legal Finance International GmbH (Düsseldorf), is also financing other claims via the product "Distressed Finance", i.e. claims that are not aimed at payment.
One example is a claim for the retransfer of a share in a company: If the claim is successful, the plaintiff receives a share in the company, but no payment. Legal Finance now also finances such claims in return for a share in the company to be transferred. In some cases, M&A specialists may also be involved.
The same applies to real estate, for example: Real estate is often at the centre of a legal dispute, for example in the case of a disputed inheritance. Legal finance finances such lawsuits against shares in the disputed property. This is always preceded by a detailed examination of the claims.
With the new product, Legal Finance is breaking new legal and business ground and is already processing the first financing request under the new model.