September 15, 2023

Claim Monetization

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Kevin Skrzysowski

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September 15, 2023

In this video blog, Kevin Skrzysowski , Director at Certum Group, provides an overview of Claim Monetization , answering the questions:

  • Claim monetization, sometimes referred to as Affirmative Asset Monetization, is a way to convert an illiquid asset into non-recourse capital.  
  • It involves identifying and monetizing a latent litigation asset that one business has against another.  
  • When a claim is monetized, a third-party funder such as Certum Group advances capital on a non-recourse basis to a company in exchange for a portion of the claims’ potential future recovery.  
  • Claim monetization is basically providing a company with an immediate cash infusion that otherwise would be unavailable until the claim was successfully resolved.  

  • Claims monetization is available for any type of litigation, but it’s usually best applied to commercial matters, contract matters, intellectual property disputes, and antitrust cases.  
  • Some examples of monetization opportunities include: (1) contract litigation or another type of commercial litigation against a vendor, contractor, or competitor; (2) Patent or other IP litigation against a competitor; (3) participating in a consortium with other companies seeking redress from the same wrongdoer; or (3) “opting out” of pending class action litigation to pursue an individual direct claim, which we often see in antitrust cases.  

  • First, a merits and damages assessment is done on a company’s current or future claim or portfolio of claims. 
  • Then a customized monetization strategy is developed to meet the client’s legal, business, and financial objectives. 
  • The third-party funder then provides a capital offer to participate in the claim’s potential future recovery 
  • A legal agreement is executed, and funds are advanced to the company on a non-recourse basis. 

  • By pulling forward potential recoveries, companies can obtain immediate revenue without the uncertainty of the actual outcome.
  • Cash resources that might have been used to cover legal costs can be redeployed into the company’s core operations. 
  • While contingent legal assets generally have no ascribed value on a company’s balance sheet, upfront claim monetization can generate cash to help improve the company’s bottom line. 
  • Simply put, non-recourse, claim monetization reduces the financial and outcome risk of pending or future litigation and provides upside opportunity to monetize litigation assets.

The post Claim Monetization appeared first on Certum Group.

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