The Small vs. the Large: A Tale of Litigation Finance

Kazakhstan Kagazy is one of the few paper recycling and cardboard production companies based in Central Asia.  Tomas Mateos became the majority shareholder of this company in 2009.  During the time period of which he was first hired, the firm was in severe distress due to the former CEO’s mismanagement and owed over $100 million to creditors.  Knowing that a trial would otherwise be too costly, Tomas Mateos turned to litigation finance to sue the former CEO.  Eventually, a payout occurred that was worth around $260 million.  The company needed the money incredibly badly for they were valued at only $40 million because of their initial debt.

Just as litigation finance helped to level the playing field between Kazakhstan Kagazy and their former CEO, it is helping to level the playing field elsewhere for the others.  Individuals and small companies who otherwise would not be able to proceed with their meritorious claims, due to a lack of resources, now have a valuable tool at their disposal to correct this inequality.  Thus, litigation finance removes one of the biggest barriers to a claim and more misdeeds of the wealthy can be held accountable for their actions.

Who will be the next Kazakhstan Kagazy? Will it be the mom and pop restaurant down the road from your childhood home or will it be you?  Due to litigation financing, it will no longer be the small individual versus the corporate giant, but a tale between two equals.

Keywords: Kazakhstan Kagazy, litigation finance, level, tool, in-debt, small

Work Cited:  John Freund, How Litigation Finance is Helping David Beat Goliath, Litigation Finance Journal (January 17, 2018)