Published by Gbaf News
Posted on June 28, 2018
Validity debuts with initial commitment of up to $250 million and offices in New York, Chicago and Houston; team includes former trial lawyers from Boies Schiller and Kirkland & Ellis
Validity CEO, Ralph Sutton, former chief investment officer of Bentham IMF, seeks heightened focus on fairness and client needs
NEW YORK – One of the pioneers of litigation finance has launched a well-capitalized company with a commitment to elevate fairness and client objectives in financing commercial and business legal disputes.
Ralph Sutton, formerly chief investment officer of Bentham IMF, announced the formation of Validity Finance to provide businesses, law firms and individuals with non-recourse funding for a wide variety of commercial litigation.
Validity’s backers have committed up to $250 million of capital to the new business. The company is anchored by a majority commitment from New York and London-based private equity firm TowerBrook Capital Partners, through its Structured Opportunities Fund.
Mr. Sutton sees Validity as the next stage in the development of litigation funding, commenting “In the dozen years since I started in the business, our industry has evolved from a novel, disruptive idea to an accepted business model, drawing a large pool of sophisticated funders. Major law firms now embrace legal finance to stay competitive, boost profits, and better serve clients.”
“We’re entering a new wave of funding, where capital and legal expertise combine to help solve legal problems on behalf of clients, including law firms with whom we partner,” he added. “What will matter in this new wave – and what will make our industry sustainable – is fairness in funding. At Validity, our mission is to make a meaningful difference in the legal system by focusing on client needs, both in the investment process and in the results.”
The new company is based in New York, with offices and staff in Houston and Chicago. Offices in other major markets are expected to follow soon.
Validity’s Team
Mr. Sutton brings a wealth of experience to the new firm. Following an 18-year career as a trial attorney, in 2006 he co-founded Credit Suisse’s Litigation Risk Strategies Group, one of the first dispute funding entities in the U.S. He later joined Bentham, where Mr. Sutton helped launch and run the Australian-based funder’s U.S. investment business from 2011-17. During his tenure, Bentham’s U.S. operation expanded to Los Angeles, San Francisco and Houston from its New York base. Mr. Sutton also assisted in the establishment of offices in Toronto and London.
In addition to Mr. Sutton, Validity’s team includes Justin Barker, a longtime litigation partner with Kirkland & Ellis, who will oversee the Chicago office. Validity’s Houston office will be directed by Laina Miller, formerly with Houston civil litigation boutique Shipley Snell Montgomery. Also based in New York is Frederick Lee, previously a senior trial lawyer at Boies Schiller Flexner. All three will help Validity vet and oversee investments.
Another member of Validity’s core team is Kate Boyd, formerly a legal technologist and business development professional for law firms White & Case and Shearman & Sterling. Ms. Boyd is charged with leading Validity’s client engagement efforts, with a special focus on using technology to assist clients.
The Validity Approach
Validity expects to bring creativity and discipline in making new investments, while deploying a client-first approach. The documents and investment agreements developed by Mr. Sutton and his colleagues are written in easy-to-understand language, and the company will emphasize speed and responsiveness in all stages of case assessment and funding.
“We’ll use our extensive backgrounds as trial lawyers to help our clients solve legal challenges,” Mr. Sutton said. “We’ll share their financial risk and provide strategic assistance, but not legal advice. We believe our dedication to the client side of the funding equation will help ensure that cases are won on their merits, rather than on financial power.”
TowerBrook
TowerBrook has experience as a financial sponsor to financial services businesses, having invested in and helped launch such firms as Ladder Capital, Unison Site Management and Hayfin. Validity will build its business consistent with TowerBrook’s commitment to responsible ownership principles.
In forming a new funding platform with a strong social conscience, Mr. Sutton said that TowerBrook Capital Partners was a clear stand-out as an equity partner, “TowerBrook has demonstrated a commitment to responsible ownership investing on a global basis,” he said. “The firm’s portfolio companies are highly diverse but share common values along these lines. TowerBrook’s entire investment process – from due diligence to ownership to exit – is rooted in responsible ownership principles. We are honored that TowerBrook views our approach to dispute funding as consistent with its own values. We look forward to shared success in putting our capital to work in the legal marketplace.”
Validity debuts with initial commitment of up to $250 million and offices in New York, Chicago and Houston; team includes former trial lawyers from Boies Schiller and Kirkland & Ellis
Validity CEO, Ralph Sutton, former chief investment officer of Bentham IMF, seeks heightened focus on fairness and client needs
NEW YORK – One of the pioneers of litigation finance has launched a well-capitalized company with a commitment to elevate fairness and client objectives in financing commercial and business legal disputes.
Ralph Sutton, formerly chief investment officer of Bentham IMF, announced the formation of Validity Finance to provide businesses, law firms and individuals with non-recourse funding for a wide variety of commercial litigation.
Validity’s backers have committed up to $250 million of capital to the new business. The company is anchored by a majority commitment from New York and London-based private equity firm TowerBrook Capital Partners, through its Structured Opportunities Fund.
Mr. Sutton sees Validity as the next stage in the development of litigation funding, commenting “In the dozen years since I started in the business, our industry has evolved from a novel, disruptive idea to an accepted business model, drawing a large pool of sophisticated funders. Major law firms now embrace legal finance to stay competitive, boost profits, and better serve clients.”
“We’re entering a new wave of funding, where capital and legal expertise combine to help solve legal problems on behalf of clients, including law firms with whom we partner,” he added. “What will matter in this new wave – and what will make our industry sustainable – is fairness in funding. At Validity, our mission is to make a meaningful difference in the legal system by focusing on client needs, both in the investment process and in the results.”
The new company is based in New York, with offices and staff in Houston and Chicago. Offices in other major markets are expected to follow soon.
Validity’s Team
Mr. Sutton brings a wealth of experience to the new firm. Following an 18-year career as a trial attorney, in 2006 he co-founded Credit Suisse’s Litigation Risk Strategies Group, one of the first dispute funding entities in the U.S. He later joined Bentham, where Mr. Sutton helped launch and run the Australian-based funder’s U.S. investment business from 2011-17. During his tenure, Bentham’s U.S. operation expanded to Los Angeles, San Francisco and Houston from its New York base. Mr. Sutton also assisted in the establishment of offices in Toronto and London.
In addition to Mr. Sutton, Validity’s team includes Justin Barker, a longtime litigation partner with Kirkland & Ellis, who will oversee the Chicago office. Validity’s Houston office will be directed by Laina Miller, formerly with Houston civil litigation boutique Shipley Snell Montgomery. Also based in New York is Frederick Lee, previously a senior trial lawyer at Boies Schiller Flexner. All three will help Validity vet and oversee investments.
Another member of Validity’s core team is Kate Boyd, formerly a legal technologist and business development professional for law firms White & Case and Shearman & Sterling. Ms. Boyd is charged with leading Validity’s client engagement efforts, with a special focus on using technology to assist clients.
The Validity Approach
Validity expects to bring creativity and discipline in making new investments, while deploying a client-first approach. The documents and investment agreements developed by Mr. Sutton and his colleagues are written in easy-to-understand language, and the company will emphasize speed and responsiveness in all stages of case assessment and funding.
“We’ll use our extensive backgrounds as trial lawyers to help our clients solve legal challenges,” Mr. Sutton said. “We’ll share their financial risk and provide strategic assistance, but not legal advice. We believe our dedication to the client side of the funding equation will help ensure that cases are won on their merits, rather than on financial power.”
TowerBrook
TowerBrook has experience as a financial sponsor to financial services businesses, having invested in and helped launch such firms as Ladder Capital, Unison Site Management and Hayfin. Validity will build its business consistent with TowerBrook’s commitment to responsible ownership principles.
In forming a new funding platform with a strong social conscience, Mr. Sutton said that TowerBrook Capital Partners was a clear stand-out as an equity partner, “TowerBrook has demonstrated a commitment to responsible ownership investing on a global basis,” he said. “The firm’s portfolio companies are highly diverse but share common values along these lines. TowerBrook’s entire investment process – from due diligence to ownership to exit – is rooted in responsible ownership principles. We are honored that TowerBrook views our approach to dispute funding as consistent with its own values. We look forward to shared success in putting our capital to work in the legal marketplace.”
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