Firm Puts Its Money on the Line for Plaintiffs Alden: ‘What the company is doing is leveling the playing field in litigation.’ By SHELLY GARCIA Senior Reporter Joseph Lisoni was representing a group of folks who were traveling in a tour van when a defective part caused a severe accident. Several of the passengers died. Several more would never be able to work again. Going up against the major automobile manufacturer Lisoni believed to be at fault was going to cost hundreds of thousands of dollars, financing that Lisoni & Lisoni, the Pasadena law firm he shares with his wife Gail, just didn’t have. Lisoni turned to Case Financial Inc., an Encino company with an unusual business. “They allowed us to bring in expert witnesses, to use visual aids, to put on the type of presentation the jury needs to prove that this company is legitimately at fault and the plaintiff is genuinely injured,” said Lisoni. “Most (attorneys) couldn’t do it without companies like Case Financial.” Case Financial, a three-and a-half-year-old company, provides funding to plaintiffs for things such as living expenses while a lawsuit is pending and to enable attorneys to mount the best case possible. If the case is resolved in favor of the plaintiff, Case receives a percentage of the settlement. If the plaintiff loses, Case gets nothing. Personal injury attorneys say insurance companies and large corporations who are being sued draw out the process hoping plaintiffs will give up and accept a smaller settlement than they actually deserve. Many plaintiffs unable to work because of the injuries they sustained can’t hold out for a fair settlement and settle for a fraction of the amount they should receive. “What the company is doing is leveling the playing field in litigation,” said Eric Argaman Alden, president and co-CEO of Case. “If you need the money before the insurance company has to pay it, then they have the leverage.” Personal injury attorneys work on contingency, and they too may not have the wherewithal to advance the cost of experts and other trial expenses until a case is resolved. Some say they’ve mortgaged their homes or other personal assets to finance some prosecutions. “As soon as you go to a bank and say, ‘By the way, I want you to lend me one-half million dollars, and by the way, I only get paid if I win,’ they show you the door,” Lisoni said. “There’s no conventional financing available to assist consumer attorneys in bringing cases against major corporations.” Case is one of only a handful of companies willing to take on such high-risk financing ventures. The company earns 3.5 percent to 16 percent of the settlement, up to a maximum of $100,000 if the plaintiff wins, but Case doesn’t get paid at all if the client loses. That means Case has to do a good job, not only of evaluating the lawsuit and liability, but of correctly projecting the amount of the award or settlement likely and the ability of the attorney to win the case. Even when its clients win, it can be months and even years before Case sees a return on its investment. “They have to have a great deal of expertise themselves,” said Lisoni, “and they take a big risk, no matter how good the case is. That’s what justifies the rate of return they receive.” Of the 1,200 cases it has been involved with so far, 700 have been resolved and about 80 percent of those decisions favored the plaintiff. But the company has yet to turn a profit, Alden said, because of the long gap between the time the financing is advanced and the settlement is received. “Without the time gap, Case’s books would be in the black,” Alden said. At the same time, Case officials are trying to beef up the company’s working capital in order to finance more cases. A larger portfolio, they say, will help provide a more consistent revenue stream on a month-to-month basis so they can cover expenses and turn a profit. Last year, the company named Gordon Gregory, managing director of Mosaic Capital LLC, investment bankers in Sherman Oaks, co-CEO of the company with responsibility for raising additional capital among other duties. In May the company completed a reverse merger with a shell company, Asia Web Holdings Inc., in a deal that provides Case with $2.9 million in working capital. The company is pumping the capital into its financing portfolio. “If the portfolio grows, there’s a certain percentage of cases that will settle in the first 90 days, the second 90 days,” and so on, Alden said. “Once you bring the portfolio to a certain size, that will cover all your overhead.” He expects the company will begin generating a profit in the next three quarters. Still, the service can be a hard sell with some attorneys who believe the service merely detracts from the amount of money their clients would otherwise be able to keep. “My theory is I want to try and maximize what my client is going to get rather than have them give it all away before they get it,” said Allan Oberman, a Woodland Hills-based attorney who handles personal injury cases. Oberman, who was not familiar with Case specifically, said these services are most helpful in cases where the plaintiff is severely debilitated, but any client who is able to return to work should be able to hold on until an appropriate resolution is reached. Case doesn’t handle cases like whiplash, sprains and other so-called “soft tissue” injuries where the diagnosis is subject to interpretation and plaintiffs are typically not entirely debilitated. The company also limits its work to those cases where there is a third-party witness to the claim, such as a police report. Alden concedes the service has been a hard sell in the past, but that is changing. Case’s staff of five sales people work throughout the state, networking with attorneys and educating them about the service. They urge attorneys to evaluate the potential returns with and without the service and make their decisions accordingly. “What we’re trying to do is, we look at the financial analysis of what you’d have to accept today and what the case is worth,” Alden said. “Today people are saying, it’s one more tool, and I have to look at it in a specific situation. It’s not an answer to all your problems.”
