Investing in Litigation Claims – the MF Global Example
The litigation investment industry continues to grow and expand despite the many who would like to say or think that litigation is not an industry. This Dealbook article covers investors seeking to buy MF Global claims for 90 cents on the dollar, give or take. The bidders are from Wall Street. A key excerpt follows:
"What was once thought to be a lost cause has erupted into a bidding war among Wall Street firms: Barclays, the Royal Bank of Scotland and the Seaport Group, a little-known firm that specializes in distressed assets, are all scrambling to buy MF Global customer claims.
On Monday, Barclays Capital, the investment banking unit of the London-based bank, agreed to purchase most claims for 90 percent of face value, the people said. R.B.S has said that it will pay 91 percent for the claims of institutions (but not individuals), according to a term sheet. Seaport is hoping to top both offers and add an additional sweetener: $200,000 to help fund the group of customers responsible for negotiating the offers."