United States: Fortress announces the integration of a litigation finance company into its legal assets business
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Following its acquisition at the end of 2019 of Capital Vannin, Fortress Investment Group LLC announced that the operations of the UK-based lender, including a number of its employees, are “being restructured in the Fortress Legal Assets business.” According to Fortress, this change will have no impact on the existing investments of Vannin Capital, which, at the time of its acquisition, said it had $ 500 million in available private equity and assets under management “constantly in the billions” .
Prior to the 2019 acquisition, Fortress had been a funder of Vannin since at least mid-2016, when the parties entered into a ‘substantial’ senior secured debt facility that would have raised Vannin’s capital to £ 373million. ($ 500 million).
In a September 2019 press release, Vannin announced that Fortress (who Vannin said was one of “several” potential buyers who extended an offer) had acquired 100% of Vannin’s shares from existing shareholders, including the majority owner.
Bramden Investments—The private investment vehicle of DLA Group, the Isle of Man-based family office of Dan Craddock. Craddock co-founded Vannin Capital in 2010 with Matthew Cox, a former corporate lawyer who currently serves as the company’s CIO. While Cox appears to have stayed behind, Vannin’s CEO and CFO left the company following the completion of the Fortress acquisition, which was also closely followed by the closure of Vannin’s offices in the United States and Germany.
The integration of Fortress with Vannin Capital comes amid a busy period for the litigation finance industry, which saw several established players achieve significant fundraisers at the end of the third quarter. Also in the third quarter, several NPEs launched new campaigns funded by third parties, including a litigation finance firm and a hedge fund. For more details, see “Litigation Finance Injected with Additional Capital in Q3, as More NPEs Launch Campaigns with Third-Party Funding” (October 2021).
Formed in 2007, New York-based Fortress Investment Group is a global investment manager reporting $ 53.9 billion in assets under management as of June 30, 2021. The company raised $ 900 million in 2018 for its first “formal” IP fund and reportedly raising a second IP fund is expected to “easily match” its 2018 increase. At the end of 2017, the Japanese conglomerate
SoftBank completed an acquisition of Fortress for $ 3.3 billion; according to the company, Fortress now operates within SoftBank as an independent company.
Fortress has acquired a stock of patents over the years, subsets of which have been litigated with various controlled plaintiffs, collectively filing hundreds of patent infringement cases in the past three years alone. Many of these lawsuits follow Fortress’s 2018 acquisition of the assets and monetization business of Australian NPE Uniloc Corporation Pty. Limited, which has sparked a lengthy court battle over the effects and public disclosure of the many complex agreements governing the long-standing relationship between Fortress and Uniloc. ; RPX coverage of these issues can be found here.
In July 2020, Fortress acquired publicly traded company NPE Finjan Holdings, Inc. in an all-cash transaction valued at $ 43.9 million. The press release announcing the transaction said Finjan “will maintain its brand and business model after the transaction,” continuing to license and enforce the anti-malware portfolio that the NPE has claimed in litigation since. 2006. This acquisition was not without hiccups either. Intelligence argued, both in the Delaware Court of Chancellery and in a federal district court case filed against it by Fortress subsidiary VLSI Technology LLC that with the acquisition of Finjan by Fortress, Intel (a holder of existing Finjan license) has obtained a license for the intellectual property of each “affiliate” Fortress. To deepen this fray, see “As Finjan Sees Setbacks, Delaware District Court Rules That Another Fortress NPE Must Face License Defense” (August 2021).
Last month, Northern District Judge Edward M. Chen partially granted a motion to dismiss and strike a second amended complaint filed by Intel and Apple, ending, for now, the antitrust litigation against a group of plaintiffs associated with Fortress. Apple (which released the case in June this year) and Intel had argued that the defendants violated antitrust and unfair competition laws by aggregating and asserting a “massive but obscured” patent portfolio in order to charge supercompetitive royalty rates. RPX coverage is available here.
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