Pair of Patricks fall out over funding

Pair pf Patricks fall out over fundingLitigation funders fall out over broking play.
Litigation funder Patrick Coope

Patrick Coope: fell out with fellow funder.

When one litigates for gain, it’s no surprise that the disputes that attend one’s professional and personal enterprises more readily end up in court.

In the litigation funding game, the lawyers are on speed dial, if of course Siri hasn’t already been programmed to connect one’s litigator of choice on command.

This perhaps explains why the two Patricks of litigation funding – each of which are eminently well known to the insolvency profession – have come before a judge after falling out over a tasty little sideline in litigation insurance broking they had cooked up in concert.

Patrick Moloney and Patrick Coope are shareholders in Litigation Insurance Pty Ltd, along with Sarah Hawksworth, who, judging by her Linked In profile, fled Australia last December to a quieter life providing legal advice in-house to a Mancunian IT outfit.

Moloney is perhaps better known as managing director of Litigation Capital Management, which attracted some unfortunate publicity in August last year when it pocketed $1.85 million from a $5 million court win after funding litigation against Kiwi insurer CBL Insurance.

The CBL policy had originally been written to cover the entitlements of 300 employees of Huon Corporation but in the wake of Huon’s collapse a four year legal battle saw the lawyers, senior counsel and LCM soak up every cent of the eventual winnings.

Coope meanwhile is managing director of the Australasian arm of global litigation funding behemoth Vannin Capital, which is bankrolling John Park and Co at FTI Consulting as they inch toward a reckoning with Clive Palmer in their capacity as general purpose liquidators of failed refiner, Queensland Nickel.

Given the pair of Patricks’ stock in trade, setting up a specialist litigation insurance broker in the After the Event (ATE) space would’ve been an essential and obvious step. Moloney’s interest in Litigation Insurance Pty Ltd is even held in the name of his company ATE Holdings (ATE).

But from a reading of the judgment of Justice Gleeson handed down on Monday In the matter of Litigation Insurance Pty Limited [2017] NSWSC 334, it’s clear the pair of Patricks have fallen out.

Litigation funder Patrick Moloney

Patrick Moloney successfully defended statutory demand.

On October 12, 2016 Coope, through his Australian Insolvency Group Pt Ltd (AIG), served Litigation Insurance with a statutory demand for repayment of $226,188 advanced to Litigation Insurance in 19 tranches between April 30, 2014 and February 1, 2016.

About one month later Litigation Insurance – supported by the affidavit of Moloney – applied to have the demand set aside on the basis that there is a genuine dispute around whether the debt exists.

The basis of that dispute the judge said, turned on the correct construction of the shareholder agreement which AIG, ATE and Hawksworth entered into in July 2014.

Justice Gleeson found there was a genuine dispute and ordered that the statutory demand be set aside and AIG pay Litigation Insurance’s costs. First set to Moloney.

About the Author

Peter Gosnell

Sydney Insolvency News illuminates the practice of insolvency in Australia’s largest city, highlighting the triumphs and failures of Sydney’s registered practitioners and the accounting and legal professionals who work with them. SiN is produced by Peter Gosnell, former business editor and senior business reporter at The Daily Telegraph newspaper. During a decade-long career, your correspondent reported on such notable corporate collapses as HIH, One.Tel, Westpoint and Fincorp as well as some of the nation’s highest profile bankruptcies and the investigations and prosecutions arising from Australia’s most notorious instances of white collar crime.

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