Ch. 7 debtor can’t block novel litigation funding deal, says appeals court

A U.S. appeals court last week shut down a Chapter 7 debtor’s challenge to a litigation funding agreement between his trustee and a creditor, finding that the agreement had no financial impact on William Berry Dean III, the debtor. The dispute stems from Dean’s 2019 Chapter 7 bankruptcy in Texas, where the trustee assigned to Dean’s estate struck a deal with one of Dean’s creditors, Reticulum Management LLC, to fund litigation aimed at collecting money that could be used to pay off Dean’s debts. Reticulum agreed to put forward $200,000 in exchange for 30% of any litigation proceeds the trustee managed to collect.

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Republican state AGs sound alarm over foreign litigation funding

In a letter addressed to US Attorney General Merrick Garland, a group of 14 Republican state attorneys general warned of what they called potential economic and national security threats posed by investments in US lawsuits by “foreign adversaries”, and asked the US Department of Justice to describe what the federal government has done to address concerns related to third-party litigation funding.

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