Burford Capital Share Discussion Threads

[houseofpain1] 30/3/2023 10:57

I'm not sure that's quite right, Donald? As I understand it, there was no requirement on Sysco to obtain Burford's consent under the original, standard CPA. That requirement, along with Burford's increased entitlement as you say, was only inserted in the renegotiated agreement after Sysco had broken the terms of the original agreement by assigning some of their interest in the case to their customers.

[donald pond] 30/3/2023 09:59

Yup. They sought $140m of legal funding on terms that Bur had to consent to any settlement, "such consent not to be unreasonably withheld", broke the terms and so had to increase BURs entitlement to proceeds, then tried to settle on the cheap without consent for much less that the benchmark. Hmm

[lomax99] 30/3/2023 09:33

So let’s try and tuck this lot up, did no-one think, wait a minute, what do they do for a living? Really, is this a good idea?

[maddox] 30/3/2023 09:24

Expecting BUR to walk away from their contractual agreement is naive. Sysco could have settled with BUR but have rolled the dice and gone to court. Whether they thought this would intimidate BUR into a settlement or can win the case we'll probably never know.

It's going to be interesting to see how this plays out - but I know who my money is on.

[alfredomega] 29/3/2023 22:36

Burford doesn't need this publicity. As a kind of edgy industry, they need discretion and seriousness, with the kind of clients like Sysco it is better not to have any deal with.

[donald pond] 29/3/2023 22:06

Not sure, it looks like Burford used the breach to increase the percentage of returns it gets. That in turn meant Sysco had less skin in the game and so we're happy to settle for less: if you have a claim worth say 500m but you had sold so much you would only get 40% (say) of what was left after $140m funding had been repaid there would be a big temptation to settle cheaply and preserve an ongoing relationship. Settling for $200m with an unwritten agreement that the price of pork will be kept at x for a few years suits you fine. But BUR got wise to it and the contract expressly requires their consent to any settlement. So if Sysco want to settle they need to either find reasonable terms or negotiate something that Bur accepts

[alfredomega] 29/3/2023 18:47

Burford has been naive here. When Sysco first breached the agreement, they should have claimed the capital provided and cut any relationship with them. If they were swindler once, they will be so again.

[donald pond] 29/3/2023 13:45

There is a lot redacted in the judgment, but towards the end they reveal that Burford now "largely" own whatever proceeds are awarded. Hopefully this can be resolved quickly because it could be a big win.

[dgdg1] 29/3/2023 11:27

houseofpain, thanks for that link, very interesting indeed.

[donald pond] 29/3/2023 10:40

Good find House. Given that Sysco is a near $40bn market cap company, I suspect BUR will could do very well from this.

[houseofpain1] 29/3/2023 10:32

A really interesting article on Bloomberg on the Sysco/Burford dispute, emphasising, in a way that much of the media coverage hasn't, that Sysco's behaviour has been pretty outrageous:

hxxps://news.bloomberglaw.com/us-law-week/breaching-a-litigation-funding-agreement-the-sysco-burford-story

[houseofpain1] 29/3/2023 08:04

Thorough investment rationale on Burford on Twitter last night:

[badtime] 28/3/2023 19:30

BUR2 recovered from its recent markdown ...BUR3 not so

[tomtrudgian] 28/3/2023 16:25

No they did not, and neither have they given the results for 2022 anyway. They gave a very helpful and considered update on FY business activity for 2022. They also explained the presentational changes that may or may not occur in FY 2023 or in FY 2024 and beyond.

The business activity review for 2022 also explained that the audited FY accounts would not be available for many weeks, and the reason for this. It is actually little to do with BUR, just that they are the only US listed litigation financier. The SEC and GAAP have still not concluded how auditors (not just Burford’s auditors EY) should be required to ‘fair value’ litigation assets.
Much will also depend upon when (and if) the US shareholders (currently 46%) exceed 50%, whereupon BUR will be a domestic US public company and further rules will apply from that date.

These are all presentational changes to the audited results, and IMO will likely increase the BUR share price. What they will never do is make the slightest difference to court judgements, cash received or the true worth of Burford.

[tomtrudgian] 28/3/2023 16:21

No they did not, and neither have they given the results for 2022 anyway. They gave a very helpful and considered update on FY business activity for 2022. They also explained the presentational changes that may or may not occur in FY 2023 or in FY 2024 and beyond.

The business activity review for 2022 also explained that the audited FY accounts would not be available for many weeks, and the reason for this. It is actually little to do with BUR, just that they are the only US listed litigation financier. The SEC and GAAP have still not concluded how auditors (not just Burford’s auditors EY) should be required to ‘fair value’ litigation assets.
Much will also depend upon when (and if) the US shareholders (currently 46%) exceed 50%, whereupon BUR will be a domestic US public company and further rules will apply from that date.

These are all presentational changes to the audited results, and IMO will likely increase the BUR share price. What they will never do is make the slightest difference to court judgements, cash received or the true worth of Burford.

[syoun2] 27/3/2023 18:27

Not sure if I missed it but did Burford give a reason for not notifying UK market ahead of results

[donald pond] 27/3/2023 10:32

I do think the solution is simple, which is to go to arbitration and agree a value for the non-cash element that Sysco have in their preferred settlement. And if it is a genuine arms length settlement it should be very close to Burfords estimated value of the case

[stentorian] 26/3/2023 18:25

Sysco will learn all about food processing when they get sliced and diced. Sysco will eat into their own share of the award and present it on a plate to BUR.

[alfredomega] 26/3/2023 17:01

Stentorian, Of course no, that was what Sysco intended. That's why I said they want to be very clever.

Obviously, Burford will sue them for contract breaching and for probably negotiating/getting an agreement behind their backs.

[stentorian] 26/3/2023 15:58

akfredomega, but Burford aren't playing the idiot here, Sysco are.

[donald pond] 26/3/2023 14:39

Surely the solution is to allow the settlement but for Burford to be paid according to the estimated value of the "relationship" part of the settlement.If I sued M&S and they agreed to pay be £1m and agreed to stock my product in all their shops for 5 years then the settlement is worth far more than £1m

[laughton] 24/3/2023 12:09

Exactly. Although it now seems to me that Sysco wants to come to a more amicable resolution in an attempt to retain those customers. Not something that Burford cares much about, nor should they.

[stentorian] 24/3/2023 09:12

Sysco should have used their own $140m to wage war on their customers.