Crain’s Chicago Business Spotlights ‘Rare Look’ at Litigation Funding Industry

Crain’s Chicago Business spotlights the growing third party litigation funding industry, reporting that Chicago-based litigation funder Gerchen Keller Capital has paid $26.2 million at auction to buy a $50 million share in a court judgment” in the hopes that it can collect “a nearly 91 percent rate of return.”

“The Chicago firm, whose $1.4 billion assets under management make it the largest litigation funder in the world, is betting it can collect against a $213 million lower court judgment that’s headed for appeal, giving it a nearly 91 percent rate of return,” reports Crain’s.

Crain’s notes that the “critics like the U.S. Chamber of Commerce” raise concerns about the industry “increasing the volume and length of litigation while undercutting plaintiffs’ control of their cases.” In addition, while other countries “openly disclose” litigation receiving financing, in the United States “parties often prefer to keep outside investment secret.”