Claim Investors Let Go Of Their Customers And Lawyers

by San Antonio Attorney

Hedge funds, banks and other investors of claims are releasing their customers as well as lawyers. It will take a very long time to resolve U.S. court cases such as the Bernard Madoff and Lehman Brothers bankruptcies. But new investors of Wall Street give easy money for legal claims and also work for lawyers in a slow legal industry.

The reasoning behind the venture is that some people simply do not have the means to pursue their legal rights. The investors will pay at a lower price to those who have a bankruptcy or patent claim. For those who have filed a lawsuit, the investors are a going to buy a share of the possible settlement or pay out. The sellers receive money in advance, while  the buyers take a chance at going after the claims for a greater payment.

At times, the payout is huge. In the Pilgrim’s Pride bankruptcy in 2008, investors who spent cents for every dollar of claims received millions after JBS Brazilian multinational beef producer acquired a majority stake in the company and paid its creditors fully. Wishing for the same fortune, firms such as Contrarian Capital bet for the shares of the victims of the prospective Madoff recovery.

Investors of lawsuits are also spending in the business, both in the U.S. as well as in the UK. Counsel Financial along with other loan providers cashed in roughly $35 million on cases filed by workers of Ground Zero after the attacks on September 11. The lawsuit paid out a year ago for over $700 million, and the investors gained about $11 million in profits. Patent trolling business is growing as well.

Many lawyers are moving to the business as specialists in pricing up claims. Recently, Lehman’s best bankruptcy attorney left his firm to become part of the Claims Recovery Group, a trader of bankruptcy claims.

According to critics, the increase of funds for legal cases would increase the number of lawsuits. But some states have turned over regulations against financing legal disputes, realizing that shrewd traders will acquire little compensation to finance trivial claims. Lawsuits demands tons of time and funds, and a lot of individuals with worthwhile cases do not have them.


Bankruptcy proceedings are normally completed in a timely manner.  But it is best to hire a San Antonio bankruptcy attorney to make sure that requirements of bankruptcy proceedings are met and delays are avoided.

Leave a Comment

Previous post:

Next post: