May 7, 2019

Litigation Funding for Insolvency Matters

Insolvency law is a highly specialized field, and serving insolvent clients or their creditors requires a range of skills beyond bankruptcy litigation. Law firms who serve clients in this practice area are encumbered with a unique set of challenges. Many clients are financially constrained, with the capital and resources needed for litigation often unavailable due to legal entanglements.

Litigation funding is a natural fit for firms that handle insolvency matters because it provides working capital that allows firms to perform the legal services needed to bring insolvency matters to a close.

Meeting the Unique Needs of Insolvency Cases

At its core, insolvency law is not just about money and assets; it’s about people. There is a lot on the line for the businesses involved. From owners who built a company from the ground up and employees who rely on that company for their livelihood to creditors seeking their due, the results of insolvency litigation greatly impact people’s lives.

Attorneys who have the resources to offer the specialized services required in insolvency litigation can create a positive cycle in which better case outcomes bolster firm growth and stability. Insolvency litigation funding provides the means for greater investment in resources, which provides better client outcomes and a brighter, more secure future for the law firm.

The Challenges of Insolvency Litigation

Insolvency litigation can be demanding, but the rewards and satisfaction of a job well-done make it worthwhile. Great satisfaction can be found in helping an ailing company recover from insolvency or bankruptcy or in helping a creditor assert its rights. Lawyers become trusted advisors and friends as they guide companies through the process of recovery and help them create new beginnings, or help creditors collect what they’re owed.

When insolvency is the fault of another party or a result of malfeasance, an attorney with the appropriate resources and knowledge can pursue the offending parties and recover assets for the benefit of the company as well as its shareholders and creditors. However, these efforts require an investment that many law firms lack.

Insolvency Litigation Funding Helps Law Firms Serve and Grow

Law firms that make use of litigation funding have wide discretion in allocation of those funds. In insolvency cases, financing can cover the costs of auditors, forensic accountants, or other specialists who assist with evaluation and recovery of assets.

A firm can also choose to use the funds made available through litigation finance for more traditional litigation expenses such as expert witness fees or the hiring of additional legal staff or attorneys. Or, the infusion of capital can be invested in the operation or growth of the firm, enabling improved service for current and future clients.

How Litigation Funding Works

Litigation funding is fast and simple. Law firms apply based on the collateral of a single case or a portfolio of cases. Underwriters then review the case or portfolio and determine the risk and value of the investment.

If funding is approved, the firm receives capital to be used as needed. Only winning or obtaining a favorable outcome in the pledged cases triggers the obligation to repay.

Elevate Clients and Grow with Pravati

Attorneys who want to be recognized as the best in their field must offer services that exceed expectations. Unfortunately, many law firms don’t have the ability to invest in the services insolvency clients need without the financial support of a third party. Insolvency litigation funding from Pravati Capital can be the solution that takes a law firm to the next level of service. Call us at 844-772-8284 or complete our online contact form now to learn more.


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