The next bubble

Leveraged lawsuits. I like the sound of that one. Vampire money squared!

Richard W. Fields says he has come up with a win-win financial strategy for the downturn. He is investing in lawsuits. Not in trip-and-fall cases, mind you, but in disputes that are far larger, more costly and potentially more lucrative, often pitting major corporations against each other. Mr. Fields is chief executive of Juridica Capital Management. which runs a fund that invests in one side of a lawsuit in exchange for a share of any winnings…. Juris typically invests $500,000 to $3 million in a case, Mr. Desser said. He would not identify the company’s backers, but said that “on the portfolio as a whole, our returns are well in excess of 20 percent per year.” He added, “We’re certainly beating the market.”

You know there are already guys at Citi and Goldman Sachs who are busy figuring out how to assess the risk factors and price the securitization of lawsuit investment products.