The Chicago firm, whose $1.4 billion assets under management make it the largest litigation funder in the world, is betting it can collect against a $213 million lower court judgment that’s headed for appeal, giving it a nearly 91 percent rate of return. But if the New York court rules against the party backed by Gerchen Keller’s capital, the firm receives nothing.
Litigation financing has received increased exposure this year after billionaire Peter Thiel revealed he financed litigation against media company Gawker, despite the saga’s only superficial resemblance to the profit-driven investment decisions made by commercial firms.
Advocates of the industry say it gives underfunded plaintiffs the firepower they need to take big companies to court. Critics like the U.S. Chamber of Commerce attack it for increasing the volume and length of litigation while undercutting plaintiffs’ control of their cases.
