Litigation Funder Cuts Staff as Backer Slashes Future Commitment

Validity Capital plans to lay off half its staff after its financial backer decided to cut investments in the litigation finance firm.

The New York firm has so far laid off six of its roughly 20 employees and plans to maintain between seven and 10 workers going forward, Ralph Sutton, the chief executive officer, said in an interview. Validity plans to continue operating a slimmed-down business investing only in patent cases.

Private equity firm TowerBrook Capital, which anchored a $250 million investment to launch Validity in 2018, decided not to continue financing a business that wasn’t creating enterprise value apart ...