Funding Just Got Tougher

    April 2, 2003

Funding services just took a BIG hit this past week – with funders pulling out of many types of cases – even ones in progress. This came about primarily due to the Fen Phen case, where now it looks like more cases will be turned down after audit, paying less people, and having no guarantee of paying back funds already advanced. The possibility of the company running out of money is a very real possibility – for anyone looking to get paid in the future.

Many funders had invested a lot of money in advancing to Fen Phen victims, and suddenly founds themselves in jeopardy of ever being paid back – causing potentially huge losses. This impacts funding further than just Fen Phen cases – funders are more diligent about their investment on more fronts, and many are now too strapped to be able to fund on anything.

If you had a funding situation in progress, it might take a bit longer to sort out whether your situation will be funded, and it’s not the fault of the agent you have been working with – it’s because things turned around so quickly with no prior warning. If you were in the process of getting advanced in a Fen Phen case, you are pretty much out of luck – it’s too risky to advance anymore. There are other types of cases that will likely not be funded, either, such as Dow-Corning.

On the bright side, there are still investors who are not in financial trouble, and did not over-extend in Fen Phen, who have money to lend. The specific cases will be looked at, case by case, and you should be prepared to wait a while before getting funded, while due diligence takes place. Only certain class-action cases will be advanced – one being the Sulzer hip implant case. Many others will not be able to be advanced on, due to the high risk of pay-back.

If, however, you have already settled a case, and the company paying you is in a sound financial position – you can pretty much always get advanced on the awarded settlement (since many of these settlements take some amount of time to pay out once settled).

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