.png)
CASE STUDY 1
Law Firm Opt-Out Contingency Fee Monetization
Situation
Numerous large sophisticated companies opt-ed out of the 2018 Visa/Mastercard Interchange Settlement ($6.2bn) to pursue direct self-funded litigation against the Defendants. Antitrust opt-out attorneys are traditionally paid on a contingency fee basis and thus absorb significant risk of expending time, effort and energy on a situation that may not pay out for years, if ever. Haybeach capitalized on its relationships with various opt-out groups attorneys to explore their desire to de-risk and monetize a portion of their fees now, while maintaining significant back-end risk to keep them motivated to serve their clients.
Haybeach Advantage & Value-Add
Haybeach structured a transaction with an interest rate and sharing component to account for both time and recovery uncertainty that keeps the attorney incentivized.
Haybeach has developed deep relationships with various litigating groups and determined the Defendants appetite to settle and the level of previous offers. Haybeach structured a transaction with upside that created the investment at a discount to previous offers providing considerable downside protection.
Haybeach utilized its unique market position to JV the investment with an established litigation funder, who assisted in verifying and merits
of the case.
Outcome
In May 2022, the largest client of the law firm in the litigation was approached by Defendants to settle at 1.5x last offer and attorney believes settlement likely at 2.0x. If all clients settle at this level, our investment would return at least 1.6x. Expectation is some clients may pursue even more aggressive settlements post summary judgement.