Bankruptcy litigation refers to the legal proceedings surrounding the declaration and management of insolvency. At its core, bankruptcy is a situation where an individual or an entity is unable to meet its financial obligations, prompting creditors and trustees to seek legal remedies to recover their dues.

Pursuing or defending a bankruptcy case can be complex, time-consuming, and, most importantly, costly. Given the significant financial challenges already faced by individuals or entities in such circumstances, the high costs associated with litigation can further dissuade them from seeking justice through the legal system.

It is in this context that bankruptcy litigation funding and insurance emerge as vital instruments. Litigation finance, funding arrangements and insurance offer financial support and risk coverage: allowing claims to be pursued without the immediate burden of prohibitive legal expenses.

At Annecto Legal, we can assist trustees by helping to secure funding and insurance for bankruptcy cases.

Bankruptcy litigation funding and insurance options for trustees

If you’re a bankruptcy trustee, or an insolvency practitioner striving to ensure that unpaid creditors recover as much of their debt as possible from bankrupt parties, impending litigation or asset investigations and recovery, can be a large question mark looming over realising debtor’s assets.

Whilst there is the potential for large recoveries, there is always the risk of adverse costs, even with the strongest case, and the costs burden of investigations can be large.

As a trustee, your primary concern is balancing the potential high legal expenses with the opportunity to reclaim valuable assets for the creditors’ advantage.

Bankruptcy funding allows Trustees to investigate and pursue potential assets without having to worry about the associated legal fees.

ATE insurance: ATE insurance is often used in conjunction with third party funding to protect litigants against adverse costs in bankruptcy cases. ATE insurance is used to protect claimants from the risk of having to pay the other side’s costs if their case is unsuccessful. The insurance policy will respond to the opponent’s legal fees and, on occasion, it may insure disbursements, depending on the policy.

Third-Party Funding: In some cases, third-party investors or litigation funders may be willing to provide capital in exchange for a share of any recoveries or damages resulting from a successful case.

Annecto Legal provides assistance to trustees to make sure that they enter into appropriate retainers with their legal advisors.

Why Annecto Legal?

The team at Annecto offer free advice to enable bankruptcy investigations and claims to be explored and, if applicable, progressed to the stage where they are funded and insured. Furthermore, we have access to a large network of specialist solicitors and law firms with experience in all areas of commercial litigation.

Our services represent the best opportunity for trustees to recover assets on behalf of creditors.

If you are a Trustee, speak to Annecto Legal today to ensure you secure the right funding for your case.