Financing Divorce Costs

by Annette Burns on December 5, 2010

Your client wants to have a thorough financial review of the assets.   This would include subpoenas, depositions, and a lot of forensic work.   Significant fees and expert witness funds will be necessary, but your client doesn't have access to funds.    Getting the court to order a big award of mid-case attorneys or experts' fees is dicey.  What's the solution?  A former Arizona divorce litigant may be providing the answer.

Balance Point Divorce Funding is a Beverly Hills, CA lender who may, in some instances, advance funds for divorce litigation costs, in return for a percentage of the final assets.   In essence, Balance Point buys a part of the divorce litigation, in the same way personal injury lawsuit lenders have been doing for years.   One big difference — in a personal injury case, even the attorney is ethically permitted to take a stake (generally 33%) of the final lawsuit or settlement result.  In Arizona divorces, attorneys are ethically prohibited from taking a percentage of the property division.

But Balance Point isn't acting as the attorney, so no ethical prohibitions against this type of funding apply.   Balance Point's target marget is a divorce estate worth from $2M – 15M, what the owner, Stacey Napp, refers to as the "'lower end of the high end."    Investing in cases with less than $2M in assets isn't financially feasible for Napp's business.

The concept is certainly interesting, and could be viable for the right case.  The New York Times front-page article about Balance Point can be found at Financing Divorce Costs.  

And you might remember the Arizona Court of Appeals case that involved the Balance Point founder and owner, Stacey Napp.  Also known as Brietbart-Napp vs. Napp, that opinion can be found at Napp v. Napp.

 

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