Emmerson shares jump 29% after securing $11 mln litigation funding agreement

Investing.com — Shares of Emmerson Plc (LON:) surged by 29% on Thursday after the company said that it had secured a litigation funding agreement. 

The Moroccan-focused potash development firm in a stock exchange filing said that it had entered into a Capital Provision Agreement with a litigation funding firm to provide up to $11 million in capital. 

This funding is earmarked for both advancing the company’s ongoing dispute with the Moroccan government and for general working capital purposes.

The dispute centers on a Bilateral Investment Treaty between the United Kingdom (TADAWUL:) and Morocco, which aims to protect investments between the two nations. 

Emmerson intends to use the secured funding to support potential arbitration proceedings under this treaty, which could take months to resolve. 

The company said that the agreement had been reached much quicker than expected—within two months of initiating the dispute, whereas such processes typically take six to nine months.

The capital, which will be provided in tranches and is non-recourse in nature, gives Emmerson a financial cushion to pursue the litigation without upfront costs. 

If the arbitration results in a successful outcome or settlement, the litigation funding firm will receive a return based on either a multiple of the amount drawn down or a percentage of the final settlement or award.

In tandem with securing the funding, Emmerson confirmed the appointment of Boies Schiller Flexner LLP  as its legal counsel. 

Additionally, the company has implemented a Management Incentive Plan to retain key members of its leadership team throughout the litigation process. 

Under this plan, certain directors and management will be entitled to a portion of any damages awarded to the company, aligning their interests with the success of the dispute.