Emmerson secures $11m non-recourse litigation funding deal
By Josh White
Date: Thursday 02 Jan 2025
(Sharecast News) - Morocco-focussed potash developer Emmerson announced a litigation funding agreement worth up to $11m on Thursday, and confirmed the appointment of Boies Schiller Flexner (BSF) as its litigation counsel.
The AIM-traded firm said the funding would support its arbitration proceedings under a bilateral investment treaty (BIT) with the Moroccan government and provide general working capital.
It said the funding, secured through a capital provision agreement (CPA) with a litigation finance firm, would be drawn in tranches as needed.
It is non-recourse, meaning the funding party would only receive a return if the arbitration claim is successful, with repayment based on either a multiple of the drawn-down amount or a percentage of the final award.
BSF, known for its expertise in BIT arbitration cases, would begin work on Emmerson's case early this year.
To retain key directors and management personnel vital to the litigation process, Emmerson said it had also implemented a management incentive plan (MIP).
Under the plan, 6% of any damages awarded to the company would be allocated to eligible participants, ensuring their continued engagement throughout the proceedings.
The board noted that the funding was secured within two months of the company's notification of dispute.
"The company has undertaken a tremendous amount of work and effort in a short period of time to secure substantial financing from a reliable funding partner," said managing director Graham Clarke.
"This CPA secures the medium-term future of the Company and we can now move forward with BSF as our legal partners to deliver the best possible outcome for the company and its shareholders.
"BSF tends to only take on winning cases and their confidence in the case reinforces our confidence in the outcome."
At 1630 GMT, shares in Emmerson were up 17.42% at 0.72p.
Reporting by Josh White for Sharecast.com.
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