Welcome to Fulbrook Capital Management

Introduction

Dispute Finance

The Dispute Finance industry is early-stage and dynamic. In perhaps overly simplified terms, the industry involves a third party who pays, on a non-recourse basis, the legal and other prosecution costs of pursuing a meritorious commercial claim, with a return to the third party on success. The monetization of a commercial claim has developed so that capital from it might be used for a host of purposes, such as business (working capital or an acquisition), personal (mortgage payments or tuition), and many other purposes that capital can be used for.

No other financial or investment industry, such as banking, is interested or equipped to enter the industry and address the risks and other complications inherent in legal disputes — be it in litigation, arbitration or enforcement litigation.

In a global economy, fraught with financial distress and economic unsteadiness, or even if the economy is operating perfectly, Dispute Financing fills a void.

Claimants’ Use of and Challenges with Financing

Because of the industry’s youth, the claimant market is still in good part unaware of the industry.  Even those aware of it, often do not sufficiently understand its many subtleties, complexities and ongoing rapid changes, nor how to best understand and access financing. The problems are especially acute because institutional capital supply appears acutely less than market demand. That gap is growing as demand growth, accompanying knowledge of the product and services and otherwise, outpaces institutional supply growth.

Challenges and issues therefore abound: and are often daunting. The market and industry need help.

Fulbrook

Fulbrook was created to deliver that help.  We are an independent expert advisor on and in the industry.  We are dedicated to representing claimants and investors (and defendants) in learning about, understanding, and sourcing the advantages available in the industry, including linking capital to claim needs.  In this process, we are available to represent investors in identifying, evaluating, and pursuing good commercial claims.

We have recently started another service, designed to assist settlement of claims.  In this connection, we will represent claimants or defendants in seeking to determine what a just settlement of the commercial claim is.  We also can act for courts or arbitrators or mediators in evaluating claims and defenses in an objective effort to close the books on a dispute.

We thus offer diversified services, explaining the industry and its opportunities, evaluating and enhancing the claims and their prospects towards their true value, accessing capital from investors (which Fulbrook has relationships with and trust in), negotiating financing agreements, supporting and where appropriate improving the prosecution and resolution of the claims, and seeking to settle claims.

Fulbrook is dedicated as well to education in the market ad industry, through presentations, written materials, and teaching in various law school and other venues, as noted elsewhere. We try to improve various aspects of the industry’s capacity to better serve the claimants, and we hope, more fairly treat defendants.

We operate globally, serving in the U.S., Canada, the U.K., East and West Europe, and the Middle East and Far East.  We receive requests to assist from claimants and investors worldwide.

We emphasize international disputes (litigations, arbitrations, enforcement of judgments); insolvency and other serious distress matters; patents and other IP matters; claims which are in their essence serious breach of contract cases (regardless of classification); fraud, including securities fraud; and particularly compelling other matters where we have capacity, including whistleblower claims and insurance matters.

Fulbrook deploys a skilled team of internal and external specialists. Our specialists are assembled from various national and international disciplines — law, investment, economics, and so on — and work on an integrated basis. Fulbrook is led by an experienced and successful professional in the industry, discussed below.

We are, we believe, and constantly strive to be, a unique and beneficial leader in the industry.

Fulbrook Founder and CEO

Fulbrook’s Founder and CEO, Selvyn Seidel, has a history in the industry, and is a respected professional in the area. He spent over 40 years managing and conducting complex commercial litigations, much of that as a distinguished international litigator and manager at the international and leading law firm of Latham & Watkins.  In 2009, he co-founded, and then chaired, Burford, a public Dispute Finance company that (while he was chair) within a couple of years became the largest in the world (and today still is, with two and one-half billion under management. A few years ago, he founded Fulbrook.

He lectures and teaches widely on Dispute Finance and high stakes litigation — at foundations including the RAND Institute of Civil Justice, and at law schools including Harvard, Columbia and its Center for International Arbitration (where he chaired the Advisory Board), NYU (where he was an Adjunct Professor of Law for 10 years), and Oxford University (where he is a Linacre lecturer in law).  He writes extensively on the industry (including a Primer on the industry).

In a comprehensive study published at the end of 2012 that included a chapter on Dispute Financing, he was described as “probably the front-runner in the industry.”

Purpose and Structure of Homepage

Because the market and industry are of recent vintage and complicated — each in their own right and even more so together — our homepage is more detailed than most. We have prepared it to assist in explaining with somewhat more rather than fewer words, and with graphics and other visuals.

We have tried to tailor the homepage to be useful to a wide spectrum of reader interest and need. Hopefully this introduction, with our stated purpose, will assist in achieving the goals of the homepage.

Discussion

Dispute Finance

The Dispute Finance industry advances capital to support the heavy legal and other prosecution costs of valid commercial litigation claims. If the claim is successful, the provider of financing is compensated under various formulae tied to the claim’s success. If unsuccessful, that is the financing provider’s loss.

Today, the industry not only supports the legal fees of a Dispute, but can also support most other uses of capital, derived from an investment — such as business purposes of the claimant, or personal purposes.  It is developing so that it can also be used for derivatives, and in some matters, buying and selling. Its development is rapid. Fulbrook has recently embarked on an effort to use its services to assist in settling disputes. We expect this use to grow for the benefit of claimants, defendants, investors, courts, and arbitrators.

The industry is young, complex, expanding, and dynamic. It is changing daily; has unsurprising growing pains; and sees an array of issues being debated and queued up that demand attention.

 

Litigation Funding

Challenges

Litigation Review

 

Claimants thus face daunting challenges, especially from increased complexities and costs of disputes.

Claimants’ concerns are compounded because the challenges of each are unique; each claim differs from the next, as does one financing provider from the next, like fingerprints.  In the end, there is the over-arching problem that one size does not fit all. Indeed, each claimant, financing provider, and defendant, has its own personality, its special needs, its special solutions.

For the claimant world, there is a further problem. Demand for financing exceeds supply.  The gap seems to be growing materially, especially since the demand is increasing with some speed as the knowledge of the industry spreads.  The supply of capital has a number of hurdles, including experience and skills needed to invest sensibly in a complicated, young, fast moving, industry

Coupled with these problems is the undeniable fact that the claimants, investors, and defendants, need help in understanding the industry, navigating its rough waters, and finding the best solutions possible.

Fulbrook attracts many claimants, as well as investors, and even some defendants.  One reason is nothing more than that the market and industry needs information and help through uncharted and churning waters. The challenges are significant. Another related reason is that there are few entities that people can turn to for expert, independent, assistance.

An additional and related reason is that Fulbrook is qualified and has a strong reputation. We can understand, evaluate, and otherwise support claimants and investors in their quest to link capital to claims, and then in the prosecution and resolution of the claims.  We have, as noted above, just begun to seek to evaluate the claims and defenses in an effort to settle claims.

Processes

We have access to suitable processes to review and true-up claims.

It is worth taking a summary look at the Process:

Review

 

 

General-Litigation-Funding-Process

Team Structure

Team structure is an inconspicuous but a vital part of Fulbrook’s effectiveness.  We have an internal core team; an external core team —  experts in various fields such as law, investment, economics, finance, accounting, public relations, corporate intelligence, and risk analysts to name several — we turn to when the case may need it; a network of sources of claims, mostly but not entirely from law firms we trust, respect, and look to regularly (although not exclusively); and a network of investors whom we also know, trust, respect and look to regularly (although not exclusively).

While we always are careful not to infringe on the claimant’s control of the claim, we are “hands on.” That is in stark contrast to established financing providers who are, for a variety of reasons, “hands off.”

Below, the structure is depicted:

 

Fulbrook Teams

 

Fulbrook Convictions

Several basic convictions have shaped Fulbrook’s objectives and design.

They include the following:

Claim Asset

A commercial claim is in essence an asset like a share of stock or other asset.

Investing in these assets — by committing and advancing capital for the claims in return for a yield to the investor if the claim is successful — is an important and growing, if young, industry,

There is currently an early stage trend towards funding portfolios of claims rather than, or alongside, individual claims and that trend is healthy and likely to grow.

  • The industry is complex, and there is confusion as to its operations and the benefits that it provides,
  • Yet the industry, operating as it can and should, promotes access to commercial and civil justice,
  • The industry needs help to best understand and take advantage of the industry advantages, while avoiding abuses,
  • Claimants, defendants, investors, and other stakeholders, including the courts and arbitrators, should have help settling disputes.

In these circumstances, a qualified independent expert advisor for claimants and for investors, and even for defendants when appropriate, is indispensable, especially one that has the ability and attitude to be hands on.

Lawyers

Lawyers are central players in dispute financing and settling. Their quality and efforts are all-important. They are charged with being skilled litigators. They also are charged with knowing the dispute and adequately advising their clients about it.  That includes advising an investor, and knowing enough to adequately evaluate it according to the stage it is at, and, if the claim is take forward, to pursue it well towards trial and/or settlement. The lawyers role and their pricing here are fundamental.

On the other hand, in general the lawyer and law firm are not suitably equipped to advise and serve the client about the finance industry, or to identify and attract the right financiers and negotiate the financing agreements.  That is usually not their cup of tea. At the same time, there is, it is submitted, a legal and ethical duty on the part of lawyers to understand financing — its benefits and challenges — and to competently tell their clients about financing and its providers, not to mention negotiating the financing agreements.

Lurking dangers exist, including ethical dangers such as operating in a conflict context. This capacity and service is central to enable informed client choices. Yet the market and industry are in many respects too confusing, and are changing too fast, to permit sufficient numbers of lawyers to know enough to fulfill these duties.

That leaves them and their clients in a hazardous quandary. This problem is compounded by the fact that the lawyer is potentially and optically in conflict with the client. He or she owes fiduciary duties to the client’s interest, yet his or her efforts can appear to be commingled with self-interest when securing financing. For example, the lawyer can be accused of negotiating a financing deal that is less than the best for the client, in an effort to secure work or a fee arrangement that the lawyer would lose without financing.

Fulbrook’s participation — or the participation of some other qualified party — alleviates these concerns.

Fulbrook Assistance

Accessing Capital

Fulbrook supports claimants and investors and their lawyers in ways not previously available. Fulbrook is able to assist with the following:

  • Fulbrook accessing capital, advice and information to enable better understandings of the industry and related choices,
  • Assistance in assessing and evaluating claims,
  • Enhancement of claims to their truer value,
  • Identifying and attracting suitable investors in the claims, working through a network of relationships, including certain go-to investors whom we know are interested in particular types of claims, who are good, and who are fast, and
  • Packaging claims to more fairly present them to investors for financing commitments and funding.

Sourcing of Claims

Fulbrook sourcing of cases from a wide population, and sourcing investors from a similarly wide population, (including, not only institutional investors but general investors with significant capital interested in investing in one or a portfolio of cases —such as hedge funds, private equity entities, family offices, and high net worth individuals.)

Sourcing

  • Assisting in negotiating the financing agreement and ancillary agreements,
  • Assisting in pursuing claims with the aim of resolving claims through settlement or trial on favorable and fair terms,
  • Supporting the lawyer in supplying objective expert advice for the client’s benefit, and standing between the lawyer and typical perils that face a lawyer in the financing world,
  • Assisting in settling the disputes, and
  • Speed, throughout.

If at the end of the day the claim is not in our view financeable through Fulbrook, we can provide other needed advice for a case that may not be financeable, but may nonetheless be a good case. We can also assist in seeking other assistance for the claimant, if the claim merits this. We can seek to settle it.

Some claimants do not need capital at all. Instead, they require advice and support in other aspects of pursuing their claims. We are happy to consider delinking services from capital, or separating some service from others, in situations needing this.

Accessing Capital for Dispute Finance

fulbrook-accessing-capital-graph

In accessing capital for claims and claimants that it has agreed to represent, and in representing investors themselves, Fulbrook works regularly with respected, reliable investors who underwrite individual claims or portfolios. This is depicted above.

It maintains relationships with such investors — including dedicated providers of financing for commercial claims and law finance lenders, as well as individual entities interested in investing in individual cases or portfolios, such as hedge funds, private equity funds, family offices — and other entities and individuals worldwide who are interested in investing in the types of claims in which we specialize.

Depending on the needs of the situation, we represent investors in identifying, evaluating, and prosecuting worthy commercial claims.

On various occasions, we consider adding other investors to our relationship network where they have access to adequate capital, an ability to evaluate claims in terms of risk and return, and a capacity to meet our requirements as to rates, speed, and integrity.  When potentially qualified investors contact us to discuss this opportunity, we review the possibility carefully before reaching a decision as to whether and how such investors can participate.

Fulbrook Standing

What is Fulbrook’s standing?  Although a somewhat young company, it is consistently ranked among the “preeminent” and “prominent” and “leading” in the industry. Additionally, Fulbrook has been awarded since inception over 50 awards for excellence in the industry.  Its founder and Chairman has been considered and referred to as the pioneer of the industry.

Fulbrook Services and Fee Structure

Fulbrook pricing structure may, on some occasions, contain a retainer and fee for a limited period, typically two months, but more usually it is at risk, and receives a fee only on financing, and then, if there is a recovery, at the time of the recovery.  For more information, click here.  The fee structure for consulting or to help with settlement, follow a similar path.