What We Do

A different type of investor

Dispute Finance

We finance or acquire claims that a company may have against another party, e.g. claims due to breach of contract or fiduciary duties, insurance claims, warranty claims, etc. We also finance and manage group claims. We assess the merits, potential outcome, financial capability of the opposing party etc. on a case-by-case basis.

 

Dispute Finance is a relatively new concept, which has developed and become more widely known and used during the last ten years by companies of all shapes and sizes to reduce costs and risks when pursuing claims. It is an area of corporate finance involving large investment firms and funds predominately originating from the United States, the United Kingdom, Australia, the Netherlands, Germany and Switzerland. Kapatens was the first funder established in Sweden, with a main focus on the Nordic Region.

 

Dispute Finance is not a new concept, but has developed and become more widely known and used during the last ten years by companies of all shapes and sizes to reduce costs and risks when pursuing claims. It is an area of corporate finance involving large investment firms and funds predominately originating from the United States, the United Kingdom, Australia, the Netherlands, Germany and Switzerland. Kapatens was the first funder established in Sweden, with a main focus on the Nordic Region.

“As for the future, we predict great potential for the continued development of third party funding in Sweden.”

Johan Sidklev/Carl Persson – The Third Party Litigation Funding Law Review 2019

“…the more users encounter third party funding in practice, the more favourably they tend to perceive it.”

2018 International Arbitration Survey
Common questions
Is it legal?

Yes, dispute finance is legal and has always been legal in the Nordic countries.

How is the financing structured?

The structure of the financing depends on each specific case. In the typical dispute finance case, the company receiving funding remains a party to the proceedings (i.e. does not assign its claim) and continues to retain the services of and instruct its legal counsel. Kapatens does not take control of the proceedings. Dispute finance constitutes non-recourse funding, which means that Kapatens will not have the right to any repayment unless the claim is successful. In such case, Kapatens will receive a profit share. The profit share is based on Kapatens’ risk exposure of the claim.

What size of claims do you finance?

Normally we focus on cases where the amount in dispute is no less than 20 MSEK. We have no upper limit.

Are there any specific type of cases which you do not finance?

We only finance cases with strong merits in low corruption jurisdictions and where the opposing party has the financial resources to pay an adverse award or judgment.

Can we tell the opposite party that we have received financing from you?

Yes, you can do that after we have signed the financing agreement. Studies have shown that it is more likely to reach a settlement if the claimant or plaintiff is financed by a third party funder.

Get in touch

Johan Skog
Partner
js@kapatens.com

Non-Performing Loans

We acquire non-performing loans, defaulted bonds and similar instruments in cases where the underlying value is not subject to operational performance. In the monetizing of such loans we use our network and experience in global asset tracing, and enforcement.

Common questions
How is the acquisition structured?

The structure of the acquisition depends on each specific case. We can offer a fixed purchase price paid at the time of acquisition and/or a variable purchase price depending on the actual outcome of the enforcement procedure/monetization.

What size of loans do you acquire?

Normally we focus on cases where the loan amount is no less than 20 MSEK. We have no upper limit.

Do you have the necessary permits?

Yes, we are licensed to conduct debt recovery pursuant to the Swedish Debt Recovery Act and registered as a financial institution by the Swedish Financial Supervisory Authority.

Can we control how you proceed with the enforcement after the acquisition?

Yes, we can agree on the way forward provided that this is in line with the legal requirements. We will always strive to attend to your interests.

Get in touch

Gustaf Leijonhufvud
Partner
gl@kapatens.com

Distressed Finance

We provide funding in distressed situations, e.g. to companies undergoing corporate restructuring (DIP financing), financing of abatement of debts (voluntary or statutory), recovery claim by a bankruptcy estate, or with respect to enforcement of pledge and other security.

Common questions
How is the financing structured?

The financing structure depends on each specific case. Typically, it is a short-term bridge financing to cover OPEX and legal costs during the corporate restructuring phase with security in form of a super priority right and/or pledge in tangible assets (e.g. real estate). If the corporate restructuring succeeds, our bridge loan is repaid by way of traditional financing. As our loan is high risk it is more expensive than traditional financing.

What size of investments do you make?

Normally we focus on cases where the loan amount is within the range of 5-40 MSEK.

Will you help the company with the turn-around?

No, not normally. We do not make an investment based solely on the operational performance being improved, for example by a new management team or business idea (we base our investment only on assets which can be realised, see above). However we have a network of turnaround consultants that may be of assistance. It is in our interest that the company will survive in the long-term.

Get in touch

Gustaf Leijonhufvud
Partner
gl@kapatens.com

Buy-to-Liquidate

A faster, simpler and more cost-efficient alternative to liquidating a company is to sell it to us. We acquire the company and handle the entire liquidation process without any further involvement on the seller’s behalf. Our acquisition enables the seller to release capital, reduce risk and workload.

Common questions
How do you calculate the purchase price?

Normally we base our price on the liquidation value of the company, reduced by a risk premium.

What size of investments do you make?

Normally we focus on cases where the invested amount is no less than 10 MSEK. We have no upper limit.

Can you buy-and-liquidate companies in jurisdictions outside the Nordic Region?

Yes, we have partnerships in many countries. Please contact us and we will quickly let you know if we can assist.

Get in touch

Gustaf Leijonhufvud
Partner
gl@kapatens.com