LITIGATION TRENDS 2025 | 43 T O C E M P E S G A N T I I P C A P R O W C S P O R T C O N T A C T I N T A P P P A T C C L S E C Complex Commercial Litigation L Subsidiaries, 2019 WL 1374261, at *1 (N.Y. Sup. Ct. Oct. 5, 2021). Validity. The most high-profile challenge in 2024 to the role of litigation financers came in a dispute between Sysco and its litigation funder Burford Capital. In two separate cases, district courts reached opposite conclusions about whether the arrangement was lawful. The background of the dispute involved a disagreement between Sysco and Burford regarding settlement of claims. See Broiler Chicken, 2024 WL 1214568, at *1. After litigation between the parties, a new entity called Carina Ventures LLC was created to receive an assignment of the claims and substitute for Sysco in the litigations. Id. In March 2024, a district court in Illinois approved of Carina’s motion to substitute, rejecting arguments that the substitute entity lacked standing, and that the motion to substitute was void as champerty and against public policy. Id. Just three months later, however, a district court in Minnesota addressed this arrangement in the Pork Antitrust Litigation and rejected substitution, holding that there was no precedent for allowing substitution of “a party with undoubted Article III and antitrust standing with a newly formed shell company created mid-suit for the sole purpose of litigating assigned claims on behalf of a litigation funder, which has no stake in the litigation other than maximizing its return on an investment it made in the outcome of the litigation.” No. CV 18-1776 (JRT/JFD), 2024 WL 2819438, at *2 (D. Minn. June 3, 2024). In light of the differing treatment among the courts, litigants should consider whether the presence of a litigation funding arrangement requires disclosure, and also whether the existence and terms of the agreement should be discoverable and potentially used in litigation. Further, if discovery or other events suggests potential impropriety or a unique arrangement, defendants facing cases backed by litigation funders should consider challenging the arrangement entirely. 42 | Weil, Gotshal & Manges LLP
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