In an article for the New York Law Journal titled, “New York’s Highest Court Weighs in on COVID-19-Related Commercial Property Insurance Claims,” Schulte Roth & Zabel of counsel Howard B. Epstein, partner Theodore A. Keyes and associate Julia R. Cummings discuss commercial property insurance claims in the context of Consolidated Restaurant Operations v. Westport Insurance.

The COVID-19 pandemic upended the lives of people throughout the world and continues to have lasting impacts four years later. In addition to the significant and sometimes devastating health issues caused by COVID-19, pandemic-related shutdowns gave rise to considerable economic loss. According to Reuters, COVID-19 caused insured losses of $44 billion in the first two years of the pandemic alone, making it the third-largest event of loss ever—surpassed only by Hurricane Katrina and the Sept. 11 attacks.

Schulte Roth & Zabel partner Boris Ziser, co-head of the Finance Group and global leader of the litigation funding practice, was recently featured in the Bloomberg Law article, “Private Equity Flows Into Arizona to Run National Tort Firms.” Boris shared his perspective on litigation funders establishing alternative business structures (“ABS”) in Arizona which enable non-lawyers to own equity in law firms in the state.  

Boris has assisted numerous investors who have provided funding to law firms through an ABS. He stated, “It didn’t introduce a new concept in terms of funding or financing of a law firm’s business, what it did was changed the way one can provide that funding.” Boris explained that the investor takes a stake in the growth through Arizona, so they are not just receiving a premium on their lending, they’re getting equity in the business. He added, “What the Arizona ABS enables the law firm to do is actually funding, or investing, in an equity form rather than debt and that could have a lot of appeal.”  

Detractors of the litigation finance industry point to Arizona’s alternative business structures as an example of non-lawyers interfering with cases, but Boris explains that lawyers are following ethics laws and are making choices in the best interest of their clients. “Just because Arizona eliminated rule 5.4, that doesn’t necessarily mean that in other states rule 5.4 won’t apply,” Boris stated. “You just have to look at the conflict laws of that state and the circumstances to which you’re trying to apply it and then determine whether it would be that state’s rule that would apply or Arizona’s rule.” 

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