TelexFree

This docket consolidates securities-fraud claims arising from the collapse of TelexFree, a voice-over-internet-protocol company that regulators and courts found to have operated as a large-scale Ponzi scheme disguised as a multi-level marketing business, promising returns for promoting telecommunications services that were, in substance, a vehicle for using new investor funds to pay earlier participants. Centralized in the District of Massachusetts in October 2014, the docket now shows just 3 actions pending, consistent with a matter well into a mature bankruptcy-trustee asset-recovery and claims-distribution process spanning more than a decade.

For a funder, a docket this far into its lifecycle offers little fresh portfolio-finance opportunity: the core fraud findings and the bankruptcy trustee's clawback and distribution framework have been extensively litigated and administered over more than a decade. Remaining actions are more likely to involve residual disputes — clawback claims against net winners who received distributions before the scheme's collapse, or claims against third parties alleged to have facilitated the scheme — than the original mass of defrauded-investor claims, which have largely worked through the bankruptcy claims process.

There is no medical-lien component to this financial-fraud matter. For a claimant or firm with a specific remaining claim in this docket, Criterica Capital's commercial litigation finance line is the applicable structure, evaluated individually given the docket's mature, late-stage posture. A structural brief on this docket's bankruptcy and litigation history is available through Criterica Intelligence.

Pre-settlement funding is a non-recourse purchase of a portion of the proceeds of a pending legal claim — not a loan. If the case does not result in a recovery, nothing is owed. Rates, fees, and repayment terms are disclosed in full in the funding agreement, which the applicant’s attorney reviews before signing. Availability and terms vary by state.