Private Equity

It is no secret that litigation can stymie M&A and financing transactions. For private equity firms, the uncertainty of the process, the large financial liability of defending litigation, and the unknown ultimate judgment can impair M&A and financing transactions and damage brand reputation. Customized insurance strategies protect private equity firms from the uncertainties inherent in outstanding or threatened litigation by transferring 100% of the risk, which eliminates escrows and indemnities and allows for clean exits and the return of all capital to limited partners.

Certum Group’s litigation insurance solutions transfer the full financial risk and liability — at any time during pending or existing litigation for a known, fixed cost.

Litigation Buyout (LBO) Insurance provides private equity firms an option to transfer the risk associated with potential, threatened, or actual class action litigation to the insurer in exchange for a fixed premium. This covers the financial risk of litigation, defense costs and adverse judgment, thereby facilitating M&A and financing transactions.

Class Action Settlement Insurance (CASI) helps private equity firms transfer the risk of class action settlements from within their existing portfolio. CASI is the only post-litigation insurance product on the market that allows private equity firms to mitigate, cap and transfer the financial risk of settlement in existing class action litigation.

Why Private Equity Firms Choose Our Risk Transfer Solutions

• Converts a contingent liability into a certain cost
• Caps the financial risk of litigation
• De-risks liability to facilitate M&A and financing transactions

How Our Customized Risk Transfer Solutions Work

Each policy is customized to meet a company’s specific business, financial and legal objectives.

For those cases where settlement is not an immediate option or business reasons make time of the essence, LBO Insurance provides a clear path.  In exchange for the insurance premium, the insurance carrier will:

• Take over the defense of the litigation
• Take financial responsibility for defense costs
• Cover any adverse judgment

For those cases where settlement is imminent, CASI provides an efficient path to resolution. In exchange for the insurance premium, the insurance carrier will take the financial responsibility for paying any valid claims that will be paid under the terms of the settlement agreement.

What Makes LBO Insurance and CASI Secure

Underwritten on the paper of a leading national carrier which holds financial strength ratings of A++ from AM Best and AA+ from Standard & Poor’s, our risk transfer insurance solutions provide private equity firms with the ability to ring-fence litigation exposure by transferring the financial risk to the insurer — at any time up to when the litigation is settled.

Litigation Asset Monetization

As litigation and risk specialists, we understand and analyze the litigation risk, legal merits, opportunities and obstacles to recovery. We can assemble the team of lawyers and experts and provide the funding necessary to maximize recovery of litigation assets with a private equity company’s portfolio.  As part of our process, we design monetization solutions for companies by:

• Identifying potential litigation that could be monetized
• Analyzing current litigation to determine if there are efficiencies using litigation funding to carry the costs of the litigation
• Creating consortiums of similarly situated companies using economies of scale and critical mass to maximize recoveries; and/or
• Offering immediate monetization of all or part of the claims, thereby generating revenue without the time and expense of ongoing litigation

Some opportunities include: one-off litigation against a vendor, contractor or competitor; participating in a consortium with other companies seeking redress from the same wrongdoer(s); or as an Opt-Out to pending class action litigation.  Like our other risk transfer options, we remove the downside financial risk for the ongoing litigation fees and expenses and provide only upside opportunity to monetize untapped litigation assets.

Certum Group is very different from a traditional litigation finance company.  Instead of simply loaning money for legal expenses, we partner with corporate clients to identify and monetize litigation assets by bringing the lawyers, experts, strategies and execution while at the same time removing the downside risk of the ultimate outcome.