For Investors & PE/VC Funds
Litigation Funding for Investors & PE/VC Funds
For investors, a failed transaction often leaves live legal claims behind: shareholder rights, warranty and indemnity breaches, founder misconduct, exit obligations. These are recoverable assets. LegalFund assesses such claims on merits, documentation and counterparty capacity, and funds eligible pursuits so recovery does not consume fund resources.
What a failed deal leaves behind
Four kinds of claim sitting in your portfolio
A failed transaction often leaves live legal claims behind. These are recoverable assets, and they can be assessed and pursued without drawing on fund resources.
Shareholder rights
Breaches of the shareholders’ agreement: reserved matters, information rights, anti-dilution, tag and drag.
Warranty & indemnity
Warranties that proved false after closing, and indemnity claims under the share purchase or subscription agreement.
Founder misconduct
Diversion of funds, misrepresentation, related-party leakage and breach of fiduciary duty by promoters or management.
Exit obligations
Unpaid put options, buy-backs and redemption of preference shares, or other contractual exit commitments.
How we assess
Merits, documentation and counterparty capacity
1. Merits
Is there a clear breach and a clear loss?
- Which clause was breached and how
- Causation and quantum of loss
- Defences and limitation position
2. Documentation
Can the claim be proved on paper?
- Signed SHA, SPA or SSA and disclosure schedules
- Due diligence reports and management accounts
- Forensic or audit findings and correspondence
3. Counterparty capacity
Can the other side actually pay?
- Promoter and company assets
- Guarantees and security in place
- Solvency and operating status
Portfolio claim triage
Triage a claim before you commit fund resources
Tell us about the claim. You get an indicative rating and the points to check. It is a first view, not legal advice or a funding decision.
1. What type of claim is it?
2. What protections do you hold?
3. Counterparty capacity
4. Remaining fund term
Indicative only. Whether and how a claim can be pursued or assigned after a fund’s term depends on the fund documents, so review your LPA with counsel.
Why funding fits a fund
Recover value without spending fund resources
Fund resources protected
Legal and enforcement costs are covered under the funding arrangement, so they do not hit fund expenses or reduce distributable capital.
No downside to fund returns
Non-recourse terms mean funded costs are not repaid if there is no recovery, so a failed pursuit does not become a loss on the fund.
Claims can outlive the fund
A claim often takes longer than the fund’s remaining term. Funded pursuit gives it a path to recovery without the fund carrying costs.
Confidential assessment
Claims against founders or portfolio companies are sensitive. We assess them confidentially before any step is taken.
How LegalFund works
From a stranded claim to a funded pursuit
Share the claim file
Transaction documents, the breach, losses suffered and any forensic or audit findings.
Assessment
We test merits, documentation and counterparty capacity. Initial view within 48 hours of the documents.
Funding terms
For eligible claims, written non-recourse terms: costs covered and our share on success.
Funded pursuit
Counsel pursues the claim. You remain the claimant and keep control of strategy and settlement.
Investor questions
Litigation funding for investors and funds: FAQs
What kinds of investor claims can be funded?
Claims that arise from a transaction: breach of shareholders’ rights, warranty and indemnity claims, founder or management misconduct, and unpaid exit obligations such as put options, buy-backs and redemptions. Each is assessed on merits, documentation and counterparty capacity.
Does funding mean the fund spends nothing?
For eligible claims, legal and enforcement costs are covered under the funding arrangement. Under non-recourse terms the funded costs are not repaid if there is no recovery. LegalFund is paid from an agreed share of any recovery.
Can a claim be pursued after the fund’s term ends?
That depends on the fund documents and how the claim is held. Review your LPA and any wind-down provisions with counsel. A funded pursuit helps because it does not require the fund to carry ongoing costs.
Are exit rights like put options and buy-backs enforceable?
It depends on how they are structured and on compliance with company law and foreign exchange rules. The assessment covers enforceability before any money is committed.
What if the promoter or company has no assets?
Then recovery is unlikely, and it is better to know before spending on a case. Counterparty capacity is one of the three tests, so we check it first.
What size of claim do you fund?
We focus on strong claims of ₹1 crore and above.
Get started
Turn a failed deal into a recoverable claim.
Send us the claim file. We will assess merits, documentation and counterparty capacity, and tell you whether and how we can fund the pursuit.
- Non-recourse: funded costs not repaid if no recovery
- Assessment before any commitment
- Decree, award, MSME and commercial claims across India
Funding is subject to case evaluation and approval. Terms are set out in the funding agreement. This is not legal, tax or accounting advice.