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However, these arrangements introduce serious risks—particularly when the funder’s enforcement strategy prioritizes financial recovery above all else. Various legal disputes involving Therium reveal a pattern of forceful, and arguably disproportionate, enforcement practices that raise ethical and practical concerns.

This context is especially relevant as the so-called Sulu Claimants are currently backed by Therium in a controversial multi-billion-dollar arbitration claim against Malaysia. The case, rooted in a colonial-era agreement over territorial rights in Sabah, seeks enforcement of an arbitral award that Malaysian courts have deemed illegitimate. While Therium’s funding has provided the claimants with access to high-profile legal representation and international tribunals, the funder’s track record in previous enforcement actions suggests that clients should proceed with caution.

The Magellan Asset Finance Petition

In 2022, litigation funder Therium filed a winding-up petition in the Cayman Islands against Magellan Asset Finance Limited, a company that had received over US$8 million to pursue a legal action known as the "Rusal Case." A winding-up petition is a legal request to dissolve a company on the grounds that it is insolvent and unable to pay its debts.

Magellan had been contractually obligated to pursue the litigation diligently. However, when the case allegedly stalled, Therium exercised a clause in the agreement allowing it to demand full repayment along with interest. Rather than renegotiate the terms or work with Magellan to find a solution, Therium initiated liquidation proceedings to recoup its investment.

This hardline approach reveals a rigid and inflexible risk management strategy. While funders like Therium are entitled to protect their capital, the decision to pursue liquidation raises concerns about proportionality and professional responsibility. A more robust case-vetting process at the outset—especially given the high value of the funding and the ambitious projections of potential damages—might have reduced the likelihood of such an outcome. Moreover, instead of severing ties and pursuing dissolution, Therium could have provided support to help Magellan address whatever challenges had impeded progress on the Rusal Case. This might have included legal advisory assistance, management oversight, or milestone-based renegotiation.

By opting for liquidation, Therium prioritized interest-driven financial recovery over long-term client partnership. While this decision may reflect the commercial realities of the litigation funding industry, it also illustrates the reputational risks associated with an overly strict enforcement strategy—especially when the funded client has few resources left to respond, as may be the case with the Sulu claimants.

The Contempt Proceedings Against Guy Brooke

A more severe example of Therium’s enforcement strategy unfolded in the Commercial Court in London. In 2011, Guy Brooke, a former director of the Dutch telecoms company Cable Plus BV, entered into a litigation funding agreement with Therium to pursue a significant claim in the Netherlands. The claim sought approximately £28 million in damages. Although Brooke ultimately won the case, the court awarded just £3.4 million—far below the projected value.

Despite this partial victory, Therium claimed it was owed €4 million under the terms of the funding agreement. This claim was not based on Brooke’s actual recovery, but rather on a return formula tied to the full amount originally sought. In effect, Therium pursued interest and returns as if the £28 million had been awarded—demonstrating that its enforcement actions were driven by profit maximization rather than proportionality.

Therium’s enforcement actions were driven by profit maximization rather than proportionality.

The funding arrangement itself reveals an overambitious projection of potential damages—one that should have been more rigorously evaluated by Therium at the outset. As a professional litigation funder, Therium has the expertise and resources to conduct thorough due diligence before backing a case of this scale. The significant gap between the claim and the eventual award indicates a possible failure to realistically assess recovery prospects and legal merit.

When Brooke failed to pay the €4 million Therium claimed, the funder initiated enforcement proceedings in London. Brooke then left the UK citing medical unfitness and failed to appear at multiple court hearings. The court found him in contempt for violating several court orders: he failed to disclose the location of the recovered funds, moved the money from a Curaçao account to an undisclosed location, and refused to deposit it into court as directed. Justice Andrew Popplewell sentenced Brooke, in absentia, to 21 months' imprisonment and cited a media interview in which Brooke reportedly said, “It’s our money. For €4m I can take a few problems, you know. It’s not a bad reward. They’ll just have to put up with it.” The court interpreted this as clear intent to obstruct enforcement, but it also reflects the complete deterioration of the relationship between funder and client. Brooke’s words expose the confrontational dynamic that can emerge when funding agreements become financially and emotionally fraught.

While Brooke’s conduct ultimately led to serious legal consequences, the case reinforces the broader pattern seen in Therium’s dealings: a readiness to enforce strict repayment terms based on optimistic damage projections, with limited tolerance for underperformance or dispute.

Lessons from Therium

The Magellan and Brooke cases reveal a clear pattern in Therium’s enforcement strategy: when repayment is in question, the funder aggressively pursues legal remedies—including winding-up petitions and contempt proceedings. These are not routine commercial tactics. The methods employed by Therium—liquidating companies or pursuing imprisonment of clients—demonstrate a willingness to escalate disputes far beyond what many parties might expect in a civil funding relationship.

The methods employed by Therium—liquidating companies or pursuing imprisonment of clients—demonstrate a willingness to escalate disputes far beyond what many parties might expect in a civil funding relationship.

These outcomes—liquidation for Magellan, imprisonment for Brooke—illustrate how quickly the balance of power can shift in litigation funding relationships. When returns are prioritized over flexibility, and ambiguous terms are interpreted in ways that favor the funder, claimants may find themselves at a severe disadvantage.

Prospective clients must conduct thorough due diligence before entering into any litigation finance agreement. Repayment formulas, default clauses, and dispute mechanisms should be carefully reviewed with legal counsel to ensure expectations are realistic and risks understood. Strict compliance with legal obligations—especially concerning court orders and case proceeds—is also essential, as shown in the Brooke case.

While Therium’s actions may be legally justified, their severity challenges the perception of litigation funders as neutral allies. These cases suggest that when outcomes fall short, a funder may rapidly shift from financial partner to legal adversary.

As the Sulu Claimants continue their Therium-backed arbitration campaign against Malaysia, they—and others considering similar arrangements—should remain vigilant. The promise of capital support comes with real and substantial risk, particularly when the funder’s primary motivation is profit recovery. The cautionary lessons from Magellan and Brooke are highly relevant: when things don’t go according to plan, the consequences can be severe.

REFERENCES

Brennan, S. (2016, July 18). Absent businessman jailed over dispute with litigation funder. Law Gazette. https://www.lawgazette.co.uk/law/absent-businessman-jailed-over-dispute-with-litigation-funder/5058226.article

Judicial Administration of the Cayman Islands. (n.d.). Public registers. https://judicial.ky/public-registers/

OffshoreAlert. (2022, March 4). Therium Litigation Finance Atlas P LLC v. Magellan Asset Finance Ltd.: Winding Up Petition - $8.5M Debt. https://www.offshorealert.com/therium-litigation-finance-atlas-p-llc-v-magellan-asset-finance-ltd-winding-up-petition-8-5m-debt/

OffshoreAlert. (2022, March 7). U.S. litigation funder applies to wind up Ron Wahid’s Cayman firm, Magellan Asset Finance, over $8.5M debt. https://www.offshorealert.com/us-litigation-funder-applies-to-wind-up-ron-wahids-cayman-firm-magellan-asset-finance-over-8-5m-debt/