Investing in lawsuits?

[Arif]

I've never heard of this before but I must admit it is clever: http://www.nytimes.com/2009/06/03/business/03litigate.html

 

[brewer12345]

A few years ago my MIL was the beneficiary of an estate along with her siblings. The estate was party to a civil lawsuit that was highly likely to result in a judgement against the defendant, but the siblings decided that they did not paticularly wish to be involved in the time consuming and messy details. They sold the claim to a local lawyer who frequently bought claims like this and then pursued them himself. Seemed like a pretty good way to capitalize on his skills.

 

[free4now]

Seems like it would suffer from the same problem as the collateralized mortgage debt. It's near impossible for an outside investor to do valuations due to the unknown rate of default.

 

[tryan]

Yeah, winning the suit is the easy part ... collecting is where you "earn" your keep.

 

[floatingdoc]

dont get me started!

 

[freebird5825]

It must have been a slow day at Belmont for this guy.

For those outside the NYC zip codes, see http://www.belmont.com/horse-betting/horse-racing-bets

 

[Arif]

I also read somewhere that there are companies that will pay you for your life insurance policy. The payouts are based on age in relation to life expectancy. I am continually amazed at what can be considered an investment.

 

[Nords]

I also read somewhere that there are companies that will pay you for your life insurance policy. The payouts are based on age in relation to life expectancy. I am continually amazed at what can be considered an investment.

Viaticals. Sounds like a tough way to make a payroll.

There are companies that will "buy" your military pension, too, which I believe is still not legal. Instead they offer you a lump sum in exchange for an allotment.

 

[ats5g]

Re: Lawsuit Settlements.

Like Scott Rothstein?

 

[megacorp-firee]

This reminds me of the old cowboy movies, where the local funeral parlor owner would be one of the uh 'interested parties' in every gunfight. Kinda ghoulish, IMO.
Lawyers, and my apologies to the lawyers on this forum, when they start getting creative like this, are not doing their profession any good in the PR department.
My personal opinion is that there is a special place in hell for all people who profit off of others misery. ... and I am not just aiming this at lawyers.

 

[traineeinvestor]

Is there anywhere outside the US where the sale and purchase of interests in lawsuits is allowed? It strikes me as ridiculous that a person with no interest in the subject of a law suit could buy an interest in it.

In Hong Kong (as well as in the UK), other than for insurance purposes, it would actually be illegal. Some people recently were sent to jail for "champerty and maintinance" - effectively promoting a law suit in which they had no relevant interest: Recovery agent and solicitor jailed for offences related to maintenance and champerty

 

[BLS53]

There are debt buying firms that purchase consumer debts from the banks/credit card companies. Included is the purchase of judgments. Often at a much discounted rate, because they have been deemed uncollectable. The buyers only have to collect on a small percentage of the judgments to earn a profit. Judgments accumulate interest at a statutory rate, but in reality are generally worth less the older they are, because the chance of collecting is reduced with age.

I think a more practical way to invest in debt, would be to buy stock in one of the publically held debt buying companies.

 

[vicente solano]

We in Spain have what is called the Gypsy Curse:"May you have lawsuits and win them!"