Posted Apr 08, 2013 01:38 pm CDT
There’s a new entrant in the litigation funding market that will focus on commercial and big-bucks matters.
The new company, Gerchen Keller Capital, includes former lawyers from Gibson Dunn & Crutcher and Bartlit Beck Herman Palenchar & Scott, report the Wall Street Journal (sub. req.) and the National Law Journal. It plans to finance corporate defendants as well as plaintiffs, recovering its investment and a bonus when its side wins.
Kent Gardiner, chairman of Crowell & Moring in Washington, D.C., has represented more than a dozen large companies in litigation financing cases, the Wall Street Journal says. “I think you would find a notable percentage of the Fortune 100 have engaged in some kind of funded litigation,” he tells the newspaper. “Overwhelmingly, the impetus has been very, very tight legal budgets.”
Gerchen Keller Capital is headed by Adam Gerchen, a former portfolio manager at a hedge fund with a Harvard law degree, the stories say. The company gets its capital from individual and institutional investors.
Critics claim third-party litigation funding promotes frivolous litigation. Former Bartlit Beck partner Ashley Keller, the company’s chief investment officer, tells the NLJ he hopes to change the mind of critics such as the U.S. Chamber of Commerce. “We have deliberately chosen to focus on big-scale litigation,” Keller says. “The types of clients we’ll be working with are the chamber’s members.”