Revolving Pool

A structured legal-asset facility in which proceeds from resolved cases during a defined revolving period are reinvested into new, eligible legal-asset interests rather than distributed immediately to investors, allowing the facility to maintain a relatively constant outstanding balance and case-portfolio composition over a longer period before eventually converting to an amortization phase in which proceeds are paid out rather than reinvested. Revolving structures require detailed eligibility criteria governing what kinds of new claims can be added to the pool during the revolving period, since investors are effectively delegating ongoing case-selection discretion to the sponsor within those defined boundaries rather than underwriting a single fixed set of assets. Because the composition of the pool can change during the revolving period, these facilities typically include concentration limits and portfolio-quality tests that must be satisfied with each new addition, with a breach triggering an early transition to the amortization phase.

Revolving structures let a sponsor build a longer-duration, more capital-efficient facility than repeated static-pool transactions would allow, but investors bear ongoing exposure to the sponsor's future underwriting quality, not just the quality of the assets in the pool at closing — which is why eligibility criteria and concentration limits are negotiated with much greater specificity in revolving deals than in static ones. A well-drafted early-amortization trigger tied to portfolio-quality tests is the primary protection investors have against a sponsor's underwriting standards deteriorating over the life of a multi-year revolving facility.