Burford Capital Responds on Sysco Litigation

Your editorial “The Litigation Finance Snare” (March 21) correctly recognizes that the industry is now big business and that Burford Capital, the largest provider, is involved in litigation with its client Sysco, which used $140 million of Burford’s capital to finance a group of claims. From there, disagreements emerge.

Sysco’s suit isn’t exemplary of litigation finance—Burford has done many billions of dollars of legal finance transactions without any fanfare—but rather of an admitted breach of contract. As with any asset financing, among the basic conditions of financing in litigation finance is that the financed assets can’t be sold or assigned away, because they serve as collateral for the financing. But that is what Sysco did. The parties then negotiated a settlement, which provided Sysco a release from liability and gave Burford adjusted economics and a limited consent right. That limited consent right, to which Sysco agreed, wouldn’t have been needed had Sysco honored its contract. Having agreed to it, Sysco then threatened to breach a second time, resulting in the litigation you mention.