Third-Party Financing

Westlaw Journal Class Action, Volume 21, Issue 2/April 2014
Law Finance Group announced Feb. 11 that it is prepared to provide funding to plaintiffs’ attorneys in the massive multidistrict litigation over Chinese-manufactured drywall who are still waiting for payment a Jerry year after approval of settlements worth $1 billion. The attorneys have filed more than 10,000 suits across the country since 2009 over the defective drywall from China. Thousands of documents have been filed, monthly status conferences have been Nfl held and numerous bellwether trials were conducted.

In a statement announcing the financing proposal, Law Finance Group founder and CEO Alan Zimmerman said, Football “Sometimes the endgame can take a Jerseys long time. Whether the attorney is expecting common-benefit fees and/or representing clients, four years is a long time to wait for Poland a paycheck.” According to the statement, LFG is a licensed finance company that provides “on-demand law-related capital to lawyers and their plaintiffs.” The company, which started in 1994, is one of a growing number of third-party financers supplying legal funding in return for a share of any judgment or settlement from the litigation.

The third-party companies supply funds to attorneys and their ??? clients on either a pre- or post-judgment basis. The funds pay fees for ongoing litigation and, cheap NBA jerseys wholesale mlb jerseys particularly in personal injury cases, other needs such as debts to avoid foreclosure and bankruptcy. According to Zimmerman, LFG’s focus is on post-trial financing, providing money during appeals and settlement processes that often drag on for years. The company has invested more than $100 million in capital in more than 450 cases over the past 20 years, he said. The funding by LFG and others are nonrecourse payments; if the lawsuit is unsuccessful, the money need not be repaid. The massive Chinese-drywall litigation is ripe for third-party financing because little money Who has been disbursed despite a number of settlements.

“Whether the attorney is expecting common benefit fees and/or representing clients, four years is a long time to wait for a paycheck,” Law Finance Group CEO Alan Zimmerman said.

Homeowners across the country sued hundreds wholesale nfl jerseys of builders, drywall suppliers and their insurers, alleging the drywall was corroding electrical wiring and copper piping in their homes and causing health problems. The defendants allegedly made the drywall from Image waste material from coal-fired power plants, causing the cheap nba jerseys wholesale jerseys wallboard to emit sulfur dioxide and hydrogen sulfide, which cause a rotten-egg smell and affect some residents’ eyes, sinuses and breathing.

The claims are concentrated in the South, especially in Florida and Louisiana, which were hit hardest by drywall shortages following numerous hurricanes cheap nba jerseys between 2005 and 2008. Builders normally use drywall manufactured in the Michael United States, but the shortages prompted companies to go to China for supplies. The suits were consolidated wholesale nfl jerseys in 2009 wholesale NBA jerseys in the U.S. dolor District Court for the Eastern District of Louisiana.

The lead defendant in the litigation is German company Knauf Plasterboard Tianjin, the Conflagration primary manufacturer of Chinabased toxic drywall. In February 2013 U.S. District Judge Eldon Fallon approved five settlements worth $1 billion. The settlements included $800 million from Knauf for wholesale nba jerseys removal and replacement of the defective drywall and an $80 million global settlement with more than 600 companies for personal injury and property damage claims.

In July the judge approved a $17 million settlement by builders, contractors and insurers with four classes of claimants from Virginia. The claim process for in Bostons these settlements is Wholesale still ongoing. Attorney fees cheap nba jerseys in the $1 billion settlements could total as much as $200 million, while the maximum fees provided in the Virginia settlements is $5.5 million, according to court filings. In discussing the drywall litigation, Zimmerman described the long and complex settlement process as “a Chinese puzzle” that has prevented any settlement funds from reaching plaintiffs or their attorneys.

Attorneys “are in the thick of processing the claims that have been filed and claims are still coming wholesale mlb jerseys in,” LFG co-Chief Investment Officer Daniel Bush said. Before any money By can be distributed to the plaintiffs or attorneys, all the claims must be processed to determine how much square footage of drywall was affected, Bush said. Money will be allocated after dividing that total number and determining how much each defendant supplied. According to status reports filed Feb. 18 on the two sets of approved settlements, while many claims have been reviewed, the process continues.

In the Virginia settlements, 347 real-property claims have been filed and reviewed by an appointed special settlement master. In the $1 billion settlements, 21,465 claims have been submitted, and about half have been reviewed, the status report says. Nearly 10,000 people have filed claims related to more wholesale NBA jerseys than 20,000 affected properties.