Two recent rulings in the US have killed the litigation-funding model for FCA whistleblower lawsuits, according to Alison Frankel of Reuters. More from Reuters.
A US Magistrate Judge has denied Facebook Inc’s request for litigation funding information in a trade secrets lawsuit being pursued by Neural Magic Inc, an artificial intelligence startup. According to the startup’s filing, Facebook and a former employee sought information on the litigation funder’s identity and the nature of the funding agreement. The judge found the requested information irrelevant or “not proportional to the needs of the case.”
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.
Match Group has announced that it will pay Tinder’s co-founders and original team $441 million to settle a years-long lawsuit over allegations that Match Group purposely undervalued the startup in an effort to avoid paying out billions of dollars in equity. Bench Walk Advisors backed the plaintiffs in the claim.