Funding for Insolvency
and Restructuring Professionals

Litigation funding presents a host of opportunities for creditors, trustees in bankruptcy, receivers, monitors, and their lawyers seeking to maximize the value of litigation claims in an insolvent estate for the benefit of creditors and other stakeholders.

The genesis of Bentham IMF's business in Australia was the funding of litigation claims of an insolvency estate and the team has been supporting insolvency practitioners with funding services since 2001.

Where resources to investigate or advance claims are limited, litigation need not be abandoned or settled for under-value. Claims can be pursued on their merits and to achieve the best possible outcomes.

Bentham typically funds claims over $5M, but will consider claims of lower value, particularly if there is a portfolio of claims in an estate.

What types of claims can be funded?

Claims arising out of an insolvency event including:

  • Statutory claims including claims to recover preferences and transfers for undervalue under the Bankruptcy and Insolvency Act, RSC 1985, c. B-3 ("BIA");
  • Voidable transfers under provincial legislation;
  • Creditor claims under section 38 of the BIA;
  • Claims for breach of director's duties; and
  • Claims against third parties, including advisors.

Claims that were already in existence or contemplated prior to the insolvency including contract disputes, breach of duty claims, intellectual property litigation and tax refund claims.

Benefits of litigation funding

For Insolvency and Restructuring Professionals

Insolvency and restructuring professionals using Bentham's funding retain control of the litigation, with the ability to draw on the experience of one of the best teams in the business. Bentham can provide funding for:

  • Insolvency practitioner fees;
  • All or part of the legal fees;
  • All or part of the disbursements including expert's opinions;
  • Any court-ordered costs or security for costs orders;
  • Pre-litigation investigation costs, including the costs of examinations under s163 of the BIA.

Litigation funding allows insolvency practitioners to provide creditors with a distribution from existing funds and use the funder's capital to monetise litigation assets without risk to the estate.

For Lawyers

Lawyers can use Bentham's flexible funding solutions to structure fee arrangements with their clients including:

  • Full hourly fee funding;
  • Partial fee funding where the lawyer acts on a partial contingency basis; or
  • Funding for a portfolio of cases.

Our Return

All funding is provided on a non-recourse basis – Bentham is not entitled to any recovery unless the litigation is successful.

On success, Bentham is typically entitled to reimbursement of the amounts it has paid plus a fee, calculated as a percentage of the resolution sum or a multiple of the amount invested.

The amount of the fee depends on Bentham's risk assessment of the case and its likely duration.

How does the process work?

For more detailed information about our funding process, read more here.