Three prominent lawyers and a hedge-fund manager have launched a Chicago-based litigation financing company with $100 million in capital.
Forming Gerchen Keller Capital LLC, an investment firm focused on large-scale commercial litigation, are Adam Gerchen, Ashley Keller, Travis Lenkner and Terry Carlson.
Gerchen, the company’s chief executive officer, was portfolio manager at hedge fund Alyeska Investment Group L.P. and an investment banker at Goldman, Sachs & Co. He earned his law degree at Harvard Law School.
Keller is chief investment officer who was an analyst at Alyeska and a partner at Bartlit Beck Herman Palenchar & Scott. He clerked for U.S. Supreme Court Anthony Kennedy and graduated from University of Chicago Law School.
Serving as chief underwriting officer is Lenkner, former senior counsel at The Boeing Co. and former attorney at Gibson, Dunn & Crutcher. Lenkner, who graduated from University of Kansas School of Law, also clerked for Kennedy.
Carlson, chairman of the investment committee, was general counsel at Synthes Inc. and was a partner at Gibson Dunn, where he established the firm’s Hong Kong office. He graduated from University of Michigan Law School.
The company, which planned to open today, invests in commercial legal claims and finances litigation defense. It expects the average litigation investment would be $5 million. The firm obtained its capital from individual and institutional investors numbering in the "teens," Keller said.
Gerchen Keller doesn’t plan to be choosy about which side of a case it takes — it will finance litigation for businesses that are either plaintiffs or defendants — but will not pursue class actions or mass torts on the plaintiffs’ side. In most cases, Gerchen Keller will contract directly with the parties.
The company has already made its first investment in a litigation matter, Lenkner said. He declined to provide details, but said it is a U.S.-based matter and was in keeping with the company’s average financing deal of $5 million.
Gerchen Keller joins a number of litigation investment companies focused on high-dollar matters. U.K.-based Juridica Investments Ltd. was formed in 2007, and Burford Capital Ltd. founded by former Latham & Watkins partner Selvyn Seidel, followed in 2009. A former associate at Klee, Tuchin, Bogdanoff & Stern formed Los Angeles-based Arca Capital Partners in 2009.
Burford is traded on the AIM market of the London Stock Exchange. Keller said his company was not ruling out a public offering but was not focused on that now.
Business groups, including the U.S. Chamber of Commerce, have voiced opposition to third-party litigation funding, asserting that it promotes lawsuits against businesses.
Keller said that he would like to change the chamber’s attitude. "We’re hoping to flip the chamber in its position," he said. "We have deliberately chosen to focus on big-scale litigation. The types of clients we’ll be working with are the chamber’s members."
Contact Leigh Jones at firstname.lastname@example.org.