In what may be the first public sale of a litigation claim to a third-party funder, Gerchen Keller Capital LLC has paid $26.2 million to the estate of a bankrupt Utah magnesium company in exchange for a stake in a judgment the bankruptcy trustee won at trial last year.

The bankruptcy trustee for Magnesium Corp. of America, or MagCorp., won the $213 million fraudulent conveyance judgment in February 2015 against its former owner, Ira Rennert, and his investment fund Renco Group Inc.; Rennert was found liable for siphoning too much money out of the company—using proceeds to build a 29-room mansion in the Hamptons, among other things—at a time when MagCorp faced massive environmental liabilities and a collapse in the price of the metal.

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