Lender Backs Divorce Litigants, Typically Women, on Contingency Basis
A law school grad with a career in finance has created a lending company that helps fund divorce litigants pursuing hidden assets.
The Beverly Hills, Calif., company, Balance Point Divorce Funding, finances divorces on a contingency basis, the New York Times reports. Stacey Napp, the “lawyer by training” who created the company, refused to divulge the percentage, but she says it is “substantially smaller” than the typical one-third charged in civil cases.
Napp came up with the idea for the company during an eight-year battle to reopen a divorce deal with her entrepreneur husband. Napp had agreed to a settlement of $500,000 and an award of the family home, only to learn soon afterward that her husband was preparing to sell his mobile-home business for $5.7 million.
Balance Point has so far spent $2 million to finance 10 women seeking divorce, and is expecting the first case to be resolved this fall. The litigants financed by the company are often women raising small children who don’t have jobs. Their husbands run their own businesses and marital assets are between $2 million and $15 million.
The Times sees Napp’s company as part of a trend—companies that invest in lawsuits. At first, the companies invested in personal injury cases, but they have since expanded to invest in securities fraud and whistle-blower suits.
