Thread by @AkivaMCohen

Holy shit this Apothio litigation funding scam @KyleWRoche is running - and yes, Kyle, it IS a scam, that's what you call it when you take advantage of unsophisticated people who don't know any better - just keeps getting worse and worse the more I look at it.

See this?

There is no legitimate litigation funder in the world who will fund on these terms.

None.

Funders get paid first. That's how litigation funding works. Their initial investment is first money out. Then their litigation return. THEN the lawyers get paid.

In Kyle's version, the rubes who invest are not first money out.

Not even their initial capital outlay.

They come out AFTER the lawyers and AFTER unfunded litigation expenses.

This is being pitched to people who don't know how litigation funding works; nobody who does would ever invest on these terms.

There's nobody gatekeeping these fees. And the law firm has zero incentive to minimize them

I can't even begin to tell you how gross this is; you're telling me that if you get a 300M award and walk away with a 99.3M contingency fee, you're going to nickel-and-dime your investors by paying expenses *before* calculating their return? What the fuck?

Oh my God you absolute piece of shit

Do you see what they're doing?

1) If this case gets dismissed and the litigation funding doesn't need to be deployed to cover expenses ... they keep 20% of it anyway. Why? Just because.

2) If the claim pays off & funders don't step up to collect within a year ... they lose it

Ha ... unless there's another term in the agreement that expressly gives the company unfettered discretion, this provision arguably bars them from settling on any terms that would provide less than 100% investment return.

Gonna skip ahead to schedule I; I want to see what that return looks like

This is all just horrifying. There's no contingent upside at all - just a multiple return.

Typically, a litigation funder gets "the greater of [x%] or [YMultiple]". Here, your max recovery is 3.5x, and only if your money is locked up for more than 3 years.

Oh, also, in a sign of a well drafted agreement, there IS NO "CLOSING DATE". So looks like your max recovery is 2X

The definitions section says the closing date will be defined in section 4(a)(6). One problem: There's no such section

On the plus side, section 4(a) says they have 60 days from the Closing Date to get you your token. Since the Closing Date doesn't exist, that deadline is also meaningless

Oh holy shit, these fuckweasels don't even have a meaningful notification procedure for their funders; they're going to make announcements on crypto news sites. Hope you find them before the time to make a claim runs out

Definitely want to include a non-reliance representation from a buyer whose only ability to conduct due diligence on the litigation is to review and rely on your representations about the underlying facts

If it seems like I'm furious over this it's only because I'm fucking fuming. These lawyers are going to be taking advantage of people who don't know any better. "Invest in a potential billion dollar lawsuit" sounds great to a certain class of idiot. This is a grift.

Seriously. @KyleWRoche, @VelvelFreedman, and everyone else associated with this nonsense should be hanging their heads in absolute shame. You're fucking lawyers. You have ethical duties. Don't take advantage of people who lack the background to catch it, guys. This is wrong.

And yeah, I imagine the pile of money you'll end up sleeping on will soothe any ethical qualms you have, if you have them.

It shouldn't.