If you don't see images, click here to view
Subscribe | Forward to a Friend
Got a Story Idea? . Events To ensure delivery, please add mark@bisnow.com to your address book, learn how
Legal Bisnow
Real Estate Women Bisnow Tech Bisnow Association Bisnow NYC Real Estate
    April 16, 2008  


Join us for lunch with three of America's top General Counsels: Freddie Mac's Bob Bostrom, the Washington Post's Veronica Dillon, and American Capital Strategies' Sam Flax (largest publicly-held private equity firm in the US; Sam and his team were named WMACCA's law department of the year).  Wed, May 28, at Il Mulino in DC. Sign up here. Thanks to great sponsor Studley.


Bethesda might seem a long way from Atlantic City or Las Vegas, but Dave Lewis, General Counsel of Stone Street Capital, deals with jackpots every day. Stone Street is in the business of purchasing future income streams in exchange for lump-sum payments, and has become the nation’s #1 purchaser of lottery winnings and the  #3 purchaser of structured settlements (behind J.G. Wentworth and Peachtree). The next frontier for Stone Street, Dave tells us, is purchasing interests in lawsuits.


A number of companies currently offer plaintiffs what’s known as “pre-settlement funding,” which, as Dave explained it to us, is typically a small advance ($5,000-20,000) offered on a pending suit. Stone Street, however, is looking to get into what Dave calls “large verdict funding”—buying an interest in large suits in which the plaintiff is well-positioned for victory. Stone Street dipped its toe into this area in 2004, when it purchased over $10 million in claims from a class of Exxon dealers suing the oil giant. The dealers had already received a favorable verdict when Stone Street begin purchasing claims, but Dave had to sweat out an en banc hearing in the 11th Circuit and a Supreme Court argument (where the dealers prevailed in the case of Exxon v. Allapattah), before Stone Street collected on its investment.  


Dave says that “large verdict funding” can be structured any number of ways; in a typical case, Stone Street might offer 5-25% of a plaintiff’s expected recovery (say, $1 million) in exchange for the first $1.25 million out of any verdict or settlement. For plaintiffs, the deal offers a way to mitigate the risk of a bad verdict or reversal on appeal, which is assumed by Stone Street. To help raise investment funds for the Allapattah case, Dave obtained a legal memo on the disputed legal issue from Jamie Gorelick and Noah Levine at WilmerHale, which Dave showed to financiers worried about a possible Supreme Court reversal. Their analysis, Dave said, ended up being right on the money.


When we caught up with Dave, he’d just gotten back from his fifth trip to “Cycle Zydeco,” a four-day bike tour of Louisiana with plenty of Zydeco dancing thrown in along the way. It sounded a little offbeat but very fun—sort of like Dave’s work at Stone Street, which has grown since the four-employee operation pulled Dave in for some outside work in 1995.  He came on as General Counsel in 2000, and the firm now has 110 employees and has purchased several billion dollars worth of future income. That’s a lot of jackpots.

Gilbert Randolph
Kane Company
Intelligent Office
Advertise With Bisnow

This newsletter is a journalistic news source which accepts no payment for featured interviews. It is supported by conventional advertisers clearly identified in the right hand column. You have been selected to receive it either through prior contact or professional association. If you have received it in error, please accept our apologies and unsubscribe below. ? 2008, Bisnow on Business, Inc., 2300 N Street, NW, Washington, DC 20037. All rights reserved.

| Subscribe
| Forward to a Friend
Zegna Adrian Jules Dormeuil email