Frankfurt-based litigation financier Legal Finance SE announces the opening of proceedings in the first 'distressed finance' case. For the first time, Legal Finance is financing a process aimed at the re-transfer of company shares and, if successful, will have a stake in the company.
Typically, litigation financiers fund payment claims and participate in the success of the litigation: If the case is won, the litigation funder receives a share. However, this model is impractical when the creditor does not receive money but, for example, real estate or shares in a company. Under the new 'Distressed Finance' model, Legal Finance also finances such cases in return for a share of the assets.
The current case is international and complex: it involves the retransfer of shares in a company from a private individual. The company in question is valuable and had been 'stolen' from the plaintiff, including by fraud, resulting in a six-figure loss (in euros).
Out-of-court letters and settlement efforts have so far been unsuccessful.
Legal proceedings have now been initiated. The case is considered to have a good chance of success. In particular, Legal Finance sees the possibility of a speedy conclusion to the proceedings through a court settlement.
Legal Finance is financing the case through its subsidiary Legal Finance International GmbH and will participate in the event of success.