Small Firm Borrows and Spends Millions for Mass Tort Cases
Interested in jumping into mass medical malpractice suits or maybe a giant product liability claim? Get your lender on the line, because it may cost you millions in funding, often at absurd rates. At least according to a new lawsuit by an ex-AkinMears employee who alleges he raised almost $90 million in litigation funding for the firm -- in just four months.
Those numbers aren't just for the billion dollar BigLaw firms either. AkinMears is a modestly-sized firm of 6 to 10 attorneys, though it was involved in massive cases, including several pelvic mesh mass torts involving more than 80,000 cases.
$100 Million for 14,000 Claims
AkinMears didn't need all that money to pay for air conditioning in its Houston law offices. Instead, according to a lawsuit by the firm's former chief business development officer Amir Shenaq, the firm was pursuing an aggressive expansion plan that involved raising millions in order to by 14,000 medical mesh lawsuits.
AkinMears was already involved in seven related multidistrict litigation cases in the Southern District of West Virginia, according to the West Virginia Record. Aside from pelvic and vaginal mesh, AkinMears is also involved in litigation around mesothelioma, the disease caused by asbestos exposure, and prescription drugs such as Lipitor.
Those MDL cases represented tens of thousands of claims, but AkinMears wanted more clients faster, according to the suit. The firm was tired of running television ads and waiting for plaintiffs to come to them. To speed up its client-generation, it wanted to spend millions to purchase clients from other lawyers.
Fast Growth Isn't Cheap
To speed things along, AkinMears would need extensive funding. Enter Amir Shenaq. Shenaq had come to Houston to set up a finance office for Wells Fargo. He moved in next door to Truett Akin IV, the Akin of AkinMears, and was soon convinced to come on board to help the firm raise $100 million. Shenaq claims he was able to bring in nearly $90 million in just over four months. Further, he says he reduced the firm's interest rates from 24 percent to 16 percent.
Despite being the goose that laid the golden egg, Shenaq says he was fired when he demanded money owed to him. His lawsuit soon filed.
Related Resources:
- AkinMears Owes Me $4.2M for Arranging Loans to Buy Mass Tort Cases, Ex-employee Alleges (ABA Journal)
- Paying and Getting Paid: Effective Lawyer Compensation Schemes (FindLaw's Strategist)
- Lawyer Marketing Beyond TV: How to Adapt to Changing Media Habits (FindLaw's Strategist)
- Think Twice Before Using Crowdfunding and Litigation Investments (FindLaw's Strategist)