Litigation Funding: A Solvency Source for Insolvency Cases

Insolvency cases bring a unique problem to the fore that lawyers sometimes need to get creative to resolve. In short, insolvency cases often involve a very limited amount of assets—if any. Yet they can also have a strong underlying claim against a third-party, one that’s well worth fighting. But how do you fight when you lack assets? In some cases, the answer might be found in litigation funding.

Mistake or Malfeasance?

A business doesn’t collapse entirely on its own. Mistakes of those in control, misrepresentation from suppliers, and theft or embezzlement by directors can all be behind the insolvency. In situations involving theft, malfeasance or unlawful transfer of assets, there are many opportunities for claims against those who were at fault, and those claims can result in recovery that extends far beyond the value of the lost assets.

Instead of settling for pennies out of desperation to satisfy creditors, it could be much more prudent for attorneys and firms to consider securing funding for insolvency cases. Doing so can give them the means to pursue those who are at fault.

Going for Recovery

By the time a company reaches insolvency, its assets have been bled dry by mistakes or malfeasance—and when malfeasance is to blame there may be some opportunity for recovery. Exploring that opportunity with forensic accounting, tracing missing assets, including in offshore accounts, and creating a team of recovery specialists can be expensive—but it’s well worth it to make a strong case.

The strength of your insolvency case, and the potential reward, both have a value. That value can be advanced to you by a litigation funding company like Pravati Capital. It doesn’t matter what stage of the bankruptcy process your case is in; our underwriters can review its merits and potential and make a decision about its likelihood of success.

Uses for Insolvency Litigation Financing

If your case is deemed strong enough and non-recourse funding is issued, the funds can be used to:

• Fund an estate’s liquidation plan
• Pay for accrued fees and imminent expenses in contingency cases
• Establish a trust
• Pay creditors while pursuing the at-fault party
• Begin a credit recovery strategy
• Go through appellate court after an initial judgment has been issued against the defendant

Ultimately, whether you use the funds to make payroll and pay operating costs for your firm, to settle with creditors, or to pay forensic accountants and other experts, funding for insolvency cases gives you the capital you need to get your job done. The funds can help you reduce the strain of a long, drawn-out case and to give you the power to say, “Yes” to more contingency cases with merit.

At Pravati Capital, our underwriters have a process of due diligence that allows them to underwrite even the most complex insolvency cases. When they find those with a high likelihood of success, they can approve the application for non-recourse insolvency litigation financing, work to get any necessary approvals, * and have the funds issued quickly. Reduce your risk in insolvency cases taken on contingency and increase your likelihood of success by securing funding for insolvency cases today!

*In some instances, court approval may be necessary before receiving insolvency litigation financing.

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