Law Firm Bankruptcies Test Mass-Tort Financiers

Cash-strapped law firms have been clashing with their financiers in US courts, including Houston-based Galindo Law Firm, which built a mass-tort portfolio of more than 20,000 claimants with financing from litigation funders and has now filed for Chapter 11 bankruptcy, seeking to invalidate a lien securing approximately $50 million in loans provided by JBSL Legal Finance through its affiliate CMG Funding, highlighting growing disputes between financially distressed law firms and their litigation finance backers. 

More from The Wall Street Journal (subscription required).