Motion Media wall concept smart TV
Motion Media wall concept smart TV
Motion Media wall concept smart TV

Brett Harrison explains how insolvency disputes have become a growing area for litigation funding

News Jul 23, 2018

The Quebec Superior Court recently approved a litigation funding arrangement to fund an insolvent company’s lawsuit against its largest creditor. In 9354-9186 Québec inc. (Bluberi Gaming Technologies Inc.) v. Ernst & Young Inc., 2018 QCCS 1040, a bankrupt software company did not have the financial resources necessary to monetize its only real asset, a $200 million claim against its largest secured creditor. The Quebec Court, considering primarily Ontario case law, approved a funding arrangement whereby the litigation funder, Bentham, would take on the risk and cost of the litigation in exchange for a percentage of the recovered funds if successful. If unsuccessful, Bentham would receive nothing.

Brett Harrison, partner and co-chairman of the insolvency litigation group at McMillan LLP in Toronto, told the Law Times, Bluberi provides an expansion to the context of third-party litigation financing.

“DIP financers, like traditional lenders, aren’t as able to assess the merits and value of litigation, which these third-party financers are able to do,” says Harrison, who was also not involved in the case.  “There are numerous times where insolvent companies, once they’ve liquidated the business, may only have as an asset residual litigation, which would often not be acted upon.”

Harrison says the move toward the use of third-party financing in insolvency litigation is part of a trend moving away from the doctrine of champerty and toward the principle of access to justice.

To read the full Law Times article “Insolvency disputes a growing area for litigation funding,” click here.


Related News

News

McMillan lawyers recognized in Lexpert’s 2022 Special Edition on Canada’s Leading Technology & Health Sciences Lawyers

McMillan is pleased to announce that three of the firm’s lawyers are recognized for exceptional expertise in the 2022 Lexpert Special Edition on Canada’s Leading Technology & Health Sciences Lawyers.

News Jun 16, 2022
Read More
News

Eight McMillan lawyers recognized in Lexpert’s 2022 Special Edition on Canada’s Leading Infrastructure Lawyers

McMillan is pleased to announce that eight of the firm’s lawyers are being recognized for their exceptional expertise in the 2022 Lexpert Special Edition on Canada’s Leading Infrastructure Lawyers.

News Jun 16, 2022
Read More
News

Maria Sagan Named Winner in SFNet’s 40 Under 40 Awards 2022

McMillan is pleased to congratulate Toronto Partner Maria Sagan for being selected to join a distinguished group of the finance industry’s future leaders.

News Jun 15, 2022
Read More