Litigation Capital Manag... Share Discussion Threads

[ntv] 27/7/2023 06:49

A very clear response from LIT this morning
I am guessing this was picked on by a group of shorters yesterday so presume this is going to be very volatile whilst they are about

[nchanning] 27/7/2023 06:29

Guess somebody smart was buying 5 million shares yesterday but took me beyond 430 to get the confidence this wasn't a problem for LIT, having been kicked in the nuts once before by Burford

[someuwin] 27/7/2023 06:10

Perfect response. No downside to LIT and maybe even a positive.

"The decision neither came as a surprise nor does it pose a risk to LCM's current investments or its business model. As stated above, we welcome this as a potential positive differentiator."

[jackson83] 27/7/2023 01:34

WE could all see it coming

[williamcooper104] 26/7/2023 21:06

Small market cap so guess one or two larger shareholders panicked I've been out of LIT recently - got bored - will see if can grab some tomorrow In any rational market there ought to be a big gap up

[wolstencroft] 26/7/2023 19:24

I hope I can buy a few more before the share price recovers.

GLTA

[boozey] 26/7/2023 19:19

I always had LIT as a bit of a dead cert based on their business model which was rather foolish since there is no such thing as a sure bet in the stock market and today’s carnage was a good lesson on that point. Really bizarre how LIT was so hard hit by this ruling and no other company in the sector was affected. I am sure the company will make some form of announcement at 7am tomorrow morning to explain the situation to calm nerves. If they don’t that would be rather worrying.

[ntv] 26/7/2023 18:42

Thanks johnwig
It would be nice of the company to give us their thoughts before the mkt opens in the morning

[wisecat2] 26/7/2023 18:37

How much business do they do in the uk and forecasts going forward please

[warno01] 26/7/2023 17:33

Bought a very helpful 5000 extra shares at 75p. More dividend. Shock to the system, but the underlying business is growing rapidly. Limited impact on business in short term as per Maloney's comments. Anticipate seeing this back up to 87-88p tomorrow

[williamcooper104] 26/7/2023 16:54

Thanks Should gap up at the open

[citywolf1] 26/7/2023 16:45

Time to load up at the open it would seem

[citywolf1] 26/7/2023 16:42

Don’t worry guys. Patrick is on it: In LCM's Investor Meet Company presentation on 14 March, the following question was asked:

"It has been reported that Britain’s litigation funding industry faces “seismic consequences” if an appeal over funding agreements is allowed by the United Kingdom’s Supreme Court - what are the risks to LCM’s UK investments both directly funded and via either fund? Have you reported any information on how this case may affect LCM's business to private investors and/or other investors who participate in the funds?"

Patrick Moloney's response was as follows (my audio transcription):

"In answer to that question, there has been a challenge in the high court here in the United Kingdom with respect to whether litigation funding arrangements constitute damages based fee arrangements and are therefore caught by the legislation which governs solicitors providing those types of services. Now, the advice that we have received in and around that challenge is that it relates to that portion of the underlying funding agreement whereby the litigation financier is paid a percentage of the outcome of the pool of capital that is created as distinct from being remunerated on a multiple of invested capital. Therefore, the majority if not all of our litigation funding arrangements which have been entered into in the UK market are all based around a remuneration and return mechanism for LCM based on a multiple of invested capital. So, we're not concerned in relation to this challenge. The challenge is yet to be determined and is in early stage in terms of going through the court system, but as I say, we're not concerned about that because it really doesn't reflect the way that LCM structures its underlying litigation funding agreements. So, in answer to the final part of that question - have we reported that to the market or those who have invested in our funds management business - the answer is no because we don't perceive that as a risk."

[williamcooper104] 26/7/2023 16:41

Is it the case that the only cases this would catch is fixed share of awards where all or substantially all the funding has been advanced else the funder would just say no money unless the plaintiff agree to changing the contract Presume they can't go back and challenge historic agreements??? If so then does look like a massive over reaction

[nchanning] 26/7/2023 16:33

I guess OMNI are mostly in Oz/Asia and BUR mostly USA but surely a decent number of London cases . Looking back through old case wins time being the deciding factor in the award is a regular theme . I remember someone querying on a webinar why an Australian case did not appear to have benefitted from a long duration and Moloney saying Australian class actions were some of their only cases without a time element to the award as it was not permitted in Australia. So hopefully the vast majority of UK cases have a multiple of invested capital over time as one of the calculation methods and this proves largely irrelevant for LIT

[williamcooper104] 26/7/2023 16:25

Presumably MANO unaffected as they buy claims Weird for the rest to not move

[nchanning] 26/7/2023 16:08

Mohsin Patel, director and co-founder at litigation finance broker Factor Risk Management, said the consequences of the decision "may well not be as widespread as expected".He explained: "Given that funder returns in many LFAs are structured as multiples of funds invested as opposed to a fixed share of damages, these should therefore fall outside of the DBA regulations.

[nchanning] 26/7/2023 15:58

The 19th June huge win for LCM also referred specifically to the extended length of the case determining LCMs fees , which appear to be exactly 4 X invested capital plus a small success fee rather than a proportion of the award . Hopefully there's no affect from the ruling on these investments

[johnwig] 26/7/2023 15:53

I have just been talking to the managing partner of a large law firm who are involved in the litigation funding business. There had been two internal conferences today with all the top relevant lawyers and business bods, and the consensus there was that at first sight this is just a bump in the road. Changes in the wording of certain conditions will be necessary for certain agreements but the fundamental running of the business will suffer little damage. LIT specifically was not discussed, of course.

I am not a lawyer even though I have been in charge of more than one quoted company. Please do not act on the basis of what I have said. It has no more validity than any of the nonsense that one reads on these threads. I derive some modicum of comfort, however, from what I was told.

[wisecat2] 26/7/2023 15:52

We have prepared for this decision, and we will now work with our lawyers, class representatives and other claimants to move beyond this bump in the road.’

[nchanning] 26/7/2023 15:51

Well we will find out more at 7am but seems pretty clear to me that where agreements are structured as Lit is entitled to the higher of a) award proportion b) multiple of invested capital based on duration that they are at least always entitled to b) whatever the Supreme Court has ruled about a) . But perhaps there will be £10 or £20million in past cases where a) was higher where the client is entitled to demand that LIT's share should have been based on b) . Not ruinous for the company but a painful blow

[farrugia] 26/7/2023 15:49

why has burford not been impacted in the slightest?