The Real Test for Burford Capital Starts Now: Litigation Finance

Happy Friday! Burford Capital got some bad news last week, and I looked into what it could mean for the funder.

Last Friday, a US appeals court reversed the ruling ordering Argentina to pay $16 billion to shareholders after the country seized oil producer YPF. Burford backed the plaintiffs in the case.

In the aftermath, Burford’s stock spiraled, and the company quickly put out press releases to calm shareholder nerves. This was a big case for them, but the real test now is how Burford’s portfolio will weather the storm. There are also still some paths to recovery, like seeking a rehearing, trying the Supreme Court, or going to international arbitration — but all of that could take a long time.

“Burford took a smart risk—they won big, and then on this issue, which easily could have gone either way, they lost at least temporarily,” said Erick Robinson, a lawyer who leads a litigation funding advocacy group. “This doesn’t break a portfolio fund any more than one bad stock pick breaks a hedge fund.”

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What I’m Reading

• Attorneys at King & Spalding wrote in a Bloomberg Law Insight about how litigants have faced hurdles obtaining discovery into litigation funding agreements but the tide may be changing. Their advice: Litigants should consider incorporating discovery requests for litigation funding information into their standard litigation strategy.
• My colleague Alex Ebert has the story on how Beasley Allen, one of the leading trial firms taking on Johnson & Johnson, was disqualified by a federal court. The decision sprang from a request from J&J after Beasley Allen met with a former lawyer for the medical products company in a mediation, which the company said was tantamount to a lawyer switching sides.
• A boutique law firm lost its role in a proposed class action against a set of private universities after a federal judge said the firm misled the court about a litigation financing arrangement, my colleague Maia Spoto reports. The judge said that Gilbert Litigators and Counselors’ litigation finance wasn’t problematic on its own, but making “untruthful and misleading statements about it is a different matter.”

Business & Practice

Norton Rose Patent ‘Machine’ Drives 25% IP Revenue Growth Outlook

Norton Rose Fulbright expects to grow revenue from intellectual property work 25% this year, thanks to a focus on the most profitable clients and lateral hires, the practice head said.

Kirkland Scoops 10 Latham Lawyers, Two Leading Energy Partners

Kirkland & Ellis poached at least 10 lawyers from rival Latham & Watkins, two people familiar with the situation said Tuesday, as firms battle for talent to win oil and gas clients.

Sullivan & Cromwell Snags Top M&A Spot in Rankings Shakeup

Elon Musk and OpenAI fueled a shakeup in Big Law’s top M&A advisers during the first quarter as deals activity reached a record high and private equity’s biggest players slid.

Epstein’s Lawyer Sought to Vet, Influence Victims’ Attorneys

Jeffrey Epstein’s defense team, in an effort led by Jay Lefkowitz from Kirkland & Ellis, pressured officials at the Justice Department about the legal representation of Epstein’s victims, according to files released in January.

LISTEN: Quinn Chair on Outside Investment

As firms experiment with different ownership models — including non-lawyer investment — leaders should be prepared to discuss what those changes may mean for the pool of profits that associates and younger partners were hoping to enjoy, according to John Quinn, founder and chairman of Quinn Emanuel Urquhart & Sullivan.

“They have to be persuaded that that’s in the long-term interest of the firm,” he told Bloomberg Law reporter Roy Strom in this week’s On the Merits podcast. “But these are some awkward conversations. And it’s a generational conversation.”

Read the transcript or subscribe to On The Merits on Apple Podcasts, Spotify, Megaphone, or Audible.

Also Read: John Quinn Sees Big Law Investor Deals as States Ponder Bans

Commentary & Opinion

After the Health Care M&A Deal, There Are Real Risks to Navigate

Evolving enforcement priorities and state-level oversight are influencing post-deal strategies for health care.

Data Broker Rules from Regulators May Catch Businesses Off Guard

Recent legislative amendments and rulemaking have resulted in more companies qualifying as “data brokers,” expanding that term to reach companies that haven’t traditionally viewed themselves as operating in the data industry.

Nicklaus NIL Ruling Holds Important Lessons for Bankruptcy IP

A bankruptcy court’s recent rulings in legendary golfer Jack Nicklaus’ name, image, and likeness rights has important implications for NIL owners.