Category: Transactions

Defense-Side Litigation Funding – In Practice

Lee Drucker | April 17, 2017

Litigation funding is not just for plaintiffs. We, at Lake Whillans, provide defense-side financing using a unique transaction structure. While our approach does not work for all defense-side litigation or arbitration, in the right circumstances, our structure provides for a straight forward transaction that allows a defendant to optimally protect its business.

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Litigation Finance: Creating a Code of Conduct

Lee Drucker | March 22, 2016

In mature industries, there is usually a set of rules outlining best practices for individuals and organizations. In newly developing industries, however, best practices are less clear, and once established spread more slowly. In order to promote the development of best practices in litigation finance, we recently identified key aspects of a funding arrangement that we believe will lead to the best results for a claimholder. Companies considering a litigation financing offer should consider the following principles and their importance:

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Pick the Right Lawyer for a Royalty Contract

Lee Drucker | September 29, 2015

Role play with me for a moment. Imagine you’re going in for surgery and you can choose between two surgeons: a doctor who performs that surgery twice a year, or one that does it twice a month?

It’s a no brainer. The same should apply to lawyers – particularly when it comes to the mission-critical task of negotiating royalty contracts. These key agreements will make or break a company. Plus, if things go bad between your company and other parties, these documents will be what separates losing millions (and sometimes more) and remaining intact.

Here are some ways to vet your attorneys to see which ones know enough about royalty agreements.

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Protecting Yourself as a Small Business Contractor with the Department of Defense

Lee Drucker | September 10, 2015

Fred Lisy is president of Orbital Research Inc., which conducts research on and product development of medical devices and military weapons technology. Founded in 1991, this small company of 16 employees has been contracting with the Department of Defense for more than 20 years, mainly with the U.S. Army, U.S. Navy and U.S. Air Force.

“You can’t be risk averse and work with DoD,” he says, which is one reason he maintains about 30 to 50 percent of company revenue in commercial as opposed to government ventures. That being said, he’s also quick to note the best way to protect one’s self as a small business is to keep learning and asking questions. The more you know, the safer you’ll be.

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Financial Analysis of Litigation Funding

Lee Drucker | January 7, 2015

The emergence of litigation finance has enabled CFOs to better manage and finance a once dormant asset – potential litigations. Many of the companies that we finance are emerging businesses with promising new products that have the ability to transform an industry. Businesses such as these are often characterized by a high ROI (return on investment) and a constrained budget (often having recently raised capital from the venture community). Imagine that the wrongful conduct of a third party has damaged such a business, and the company now faces the prospect of an expensive and lengthy litigation if it is to secure compensation. Before litigation finance, the decision might well have been between bringing litigation or not – now the decision is between self-financing or third party financing.

In order to determine which option is preferable, the CFO would likely attempt to value the potential litigation. In an older post (which you can find here), we discussed the framework for valuing a litigation. For the sake of simplicity let us assume that the expected damages are $30 million, and the chances of losing the case are estimated to be 30% – therefore the estimated value is $21,000,000.

Next, the CFO would likely attempt to calculate the cost of monetizing the asset. In order to estimate the true cost of allocating capital to the litigation, a CFO might undertake the following analysis:

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What to Expect When Raising Litigation Finance

Lee Drucker | November 11, 2014

The first step in the litigation finance process typically involves a decision by a company, perhaps together with its counsel, that it makes sense to explore whether litigation finance is an attractive option.  There are many reasons why a company may choose to do so.  Consider, for example, a company that has been wronged but…

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The best way for companies and their counsel to determine if litigation finance is an attractive option is to discuss it with us.