SAN FRANCISCO, CA—Legalist, Inc. (www.legalist.com), a technology-enabled legal assets firm, has announced the close of its first bankruptcy fund, Legalist DIP Fund I, dedicated to providing debtor-in-possession financing to small businesses inbankruptcy. To date, Legalist has raised $50 million for its bankruptcy-related strategies.
Founded in 2016 by two Harvard dropouts and advised by former US District Court judge Jeremy D. Fogel, Legalist'sproprietary algorithms scrape millions of court records to source and invest in legal assets in bankruptcy and litigation.Legalist’s newly launched bankruptcy team of attorneys and analysts has a collective 65 years of experience in bankruptcy andis headed by Nathan Jones, founder and former CIO of bankruptcy investment firm USDR Investments.
“As a bankruptcy attorney for over 30 years and a distressed investor for 20 years, I’m excited to join Legalist in launching its bankruptcy strategy,” said Nathan Jones, Legalist’s Head of DIP Underwriting. “It’s especially necessary in an environment which will be marked by limited access to liquidity for many small businesses, amid uncertainty about economic recovery. As they go through Chapter 11 bankruptcy, Legalist provides DIP funding to get through the process.”
Unlike traditional DIP funders, Legalist will specialize in DIP financing for small and lower-middle-market debtors, withtypical loans in the $1 million to $10 million range.
“Small-cap debtors have a strong need for post-petition financing, to help tide them through the bankruptcy process,” said Eva Shang, Legalist’s co-founder and CEO. “Legalist’s expansion from litigation into DIP financing is a natural continuation of ourmission to help small businesses pay for expensive legal proceedings.”
Based remotely, Legalist has a staff of over 30, including 7 underwriting attorneys and 3 engineers. Legalist’s DIP strategy is backed by institutional investors such as university endowments, non-profit foundations, and family offices. Legalist DIPFund I will invest in DIP opportunities in bankruptcy courts across the United States.