Laura Metzger is a partner in the Restructuring Group and a member of Orrick's Board of Directors. Laura served as Orrick’s New York Office Leader from 2015 to 2022.
She regularly represents financial institutions, direct lenders, funds, and investors involved in bankruptcies, out-of-court restructurings, foreclosures, distressed sales and acquisitions, loan and claims trading, bankruptcy litigation and refinancing involving syndicated loan facilities, debtor-in-possession financing and exit financing. She also represents start-up and later stage venture companies (with a focus on technology, blockchain and crypto) and venture capital investors in connection with liquidity crunches, rescue financing, wind-downs and negotiated resolutions with key stakeholders and investments or claims against insolvent counterparties.
Recognized as “outstanding” by The Legal 500 US, Laura was also named a Recognized Practitioner by Chambers USA, which praised her “very commercial and solution oriented” approach. She is “a very capable lawyer who gives great advice,” according to clients. Her clients include Royal Bank of Canada, UBS O’Connor, Red Rock Biofuels, Jade Mountain Partners, ECN Capital Corporation, Equinor, Portigon AG, Macquarie, PwC,Transurban, the Bank of Nova Scotia, and Erste Abwicklungsanstalt among others.
Laura has been involved in many prominent bankruptcy and out-of-court restructuring cases, including FTX, Talen Energy, Celsius Networks, Three Arrows Capital, restructurings related to the collapse of Tera and Luna, Mt. Gox, Legacy Reserves, White Eagle, Cobalt, Chesapeake Energy, Shopko, The Weinstein Company, Lily Robotics, Seadrill, Chaparral, CHC Helicopters, Erickson, GT Advanced Technologies, Hostess, Pocahontas Parkway, Indiana Toll Road, Eagle Bulk, Fresh & Easy, American Airlines, Chemtura Corporation, Lazare Kaplan, Hawker Beechcraft, Metro Fuel, Claim Jumper Restaurants, Abitibibowater, Nortel, Fabrikant, Scotia Pacific, VICORP, Sea Containers, Lyondell, Foxwoods, Delta, US Air, Northwest, Star Diamond, and Ritchie Risk-Linked Strategies Trading (Ireland) Limited. She handles cross-border restructuring matters in major international jurisdictions such as Canada, Europe, Cayman Islands and B.V.I.
Laura also has expertise in the esoteric asset class, life settlements. She represents clients in the life settlement and premium finance markets, acting for buyers, sellers and owners of life settlements and premium finance loans, and has extensive experience with the various legal issues impacting such assets.
Litigation finance can provide the cash a plaintiff needs to prevail in court. Plaintiffs holding valid—and potentially quite valuable—claims sometimes do not have the resources to initiate a lawsuit or to see one through to a favorable resolution. Rules of professional ethics generally prohibit lawyers from providing clients with financial assistance. A contingency fee arrangement with a lawyer can help reduce a plaintiff’s out-of-pocket legal costs, but such arrangements are not always feasible. Even when they are, the lawyer may not have enough cash available to fully fund the costs of litigation.
Litigation financing (also known as professional funding, settlement funding, third-party funding, or legal funding) is the process by which plaintiffs can finance their litigation or other legal costs through a third party. This third party provides a nonrecourse cash advance to the plaintiff in exchange for a percentage share of the judgment or settlement. Litigation finance is used to fund all types of cases, including commercial litigation, intellectual property disputes, personal injury cases, class actions, whistleblower suits, and even high-profile divorce cases. And funders invest in early stage cases, cases pending appeal, and even finished cases.
Many investors, including big banks, participate in this sector. There are also firms dedicated solely to investment in litigations. These firms now invest about $1 billion a year, and the industry seems to be growing. Topping $1 Billion Mark, Big Litigation Funder Gets Bigger, Julie Triedman, The Am Law Daily, January 6, 2016. The industry’s largest investor, Chicago-based Gerchen Keller, was formed in 2013 with $100 million in capital and now has more than $1.4 billion in assets under management. In many ways, the firm operates like a typical hedge fund. It maintains several separate funds that invest private capital in portfolios of assets selected by the firms’ managers. The major difference between it and more traditional hedge funds is that Gerchen Keller invests only in this new asset class—namely, interests in lawsuits. In addition to investments by big banks and funds, accredited investors with as little as $2,500 to invest can get a piece of the action. Specifically, LexShares, a crowdsourcing website, matches third-party funders meeting certain qualifications with litigants in need of funding.
The foregoing demonstrates that lawsuit investment is a new and burgeoning asset class. In spite of this, there is no uniform regulation. Congress and state legislatures are looking to change this situation.
This is the first post in our “Decoding the Code” Series. The Series will cover various sections of the Bankruptcy Code in a clear and easy to understand manner. Our first stop: preferences.
Why do I care about preferences?
Scenario 1: Your company sells products and services to a large retail electronics chain. You have been doing business with the electronics chain for years and they have been paying your invoices as they come due. Recently, however, their payments have become sporadic and you are worried they have fallen on financial hard times. You soon learn that they have filed for bankruptcy. You know you have received payments from the now-bankrupt electronics chain within the last three months and you have heard something about preference claims but what does it all mean?
Scenario 2: You are a claims trader interested in buying claims filed against bankrupt companies. You know that some claims you are thinking about buying could be subject to preference litigation but are there ways to defend against it?
On January 28, 2010, the United States Court for the Southern District of New York issued a decision in the case of Empresas Cablevisión, S.Z.B. de C.V. v. JPMorgan Chase Bank, N.A. The District Court enjoined JPMorgan Chase Bank N.A. and J.P. Morgan Securities Inc. (collectively, “JPMorgan”) from selling a participation interest to Banco Inbursa of loans made to Empresas Cablevisión, S.Z.B. de C.V. (“Cablevisión”). This decision has implications for parties that purchase and sell loans and for borrowers. Read More.
