New York’s champerty statute continues to shape how parties structure commercial transactions, particularly for investment funds enforcing secondary market debt and creditors receiving claims as non-cash recoveries in bankruptcy proceedings.
Glenn Agre partner Marissa Miller and associate George Santiago break down what today’s market participants need to know to navigate champerty, including how courts distinguish between champertous assignments and those made in furtherance of a non-litigation purpose, practical strategies for structuring champerty-compliant deals involving SPVs and related entities, and key pitfalls to avoid when designing transactions to comply with the statute’s safe harbor.
As litigation funding, creditor rights enforcement, and creative deal structures become more common, understanding how champerty plays out in modern transactions is more important than ever.
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