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(Alliance News) - Burford Capital Ltd is facing a lawsuit from one of its founding executives, the Financial Times reported on Friday.
Selvyn Seidel claims the litigation finance firm did not adhere to an agreement which would have required it to pay him a 20% performance fee on some cases he was involved in. Seidel could claim up to USD120 million as he plans to recoup a share of the winnings on some Burford cases, sources told the newspaper.
Seidel was chair from 2009 to 2011 of Burford Group, the private investment manager for the listed entity Burford Capital, according to FT.
Burford Capital told the newspaper that it "strongly believes that the court will strike out any claim as entirely without merit well before any trial".
https://www.ft.com/content/e8f8e5a8-e06e-11e9-9743-db5a370481bc
In August, US research firm Muddy Waters Capital LLC published a scathing report on the firm that described Burford as being "arguably insolvent".
Muddy Waters accused Burford of manipulating its returns on investment capital and internal rate of return, also labelling the litigation finance firm as a "a poor business masquerading as a great one".
In response, Burford said the claim was "baseless", adding that "presumably, the reason 'arguably' is inserted is because Muddy Waters knows they would lose a lawsuit if they accused Burford of insolvency, and they know they cannot support such a claim".
Shares in Burford Capital closed 4.5% lower at 791.50 pence each in London on Thursday.
By Eric Cunha; ericcunha@alliancenews.com
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