Jessica M. Karmasek Apr. 9, 2013, 4:45pm

CHICAGO (Legal Newsline) -- Gerchen Keller Capital LLC formally launched Monday, becoming one of the largest U.S.-based investors focused on commercial litigation.

The firm -- with more than $100 million of committed capital -- says it invests in commercial legal claims and finances litigation defense, "providing capital to sophisticated parties and the leading law firms that represent them."

"We are extraordinarily proud of the team we have built and all they have accomplished to date," Adam Gerchen, co-founder and chief executive officer, said in a statement.

Co-founder and Chief Investment Officer Ashley Keller explained that most traditional capital providers are "ill-equipped" to finance litigation.

"We founded GKC to deliver needed capital to companies and law firms," she said Monday.

"Our financing reduces litigation-related risks for plaintiffs and defendants, and enables law firms to offer alternative fee arrangements in response to market demands."

GKC says its finance solutions offer benefits for litigants and law firms, and can be implemented at any stage of litigation.

Individual transactions will average $5 million and will span various types of legal claims, industries and jurisdictions, the firm says.

In addition to Gerchen and Keller, the GKC team includes Chief Underwriting Officer Travis Lenkner, a former senior counsel at The Boeing Company, and Investment Committee Chairman Terry Carlson, former general counsel of Synthes Inc. and Medtronic Inc.

"The demand for litigation finance continues to grow, and we are excited to introduce our pioneering approach to the marketplace," Lenkner said in a statement.

"As the volume of commercial litigation increases and legal costs rise, we are well positioned to help parties reduce expenses and manage overall risk while enabling them to work with their counsel of choice."

But some critics of such specialized investment firms, such as the U.S. Chamber of Commerce, argue that they could end up influencing cases or encourage frivolous lawsuits.

"This turns the courts into a stock market of sorts," John Beisner, a partner at Skadden Arps Slate Meagher & Flom LLP, recently told the Wall Street Journal. Beisner has spoken out against the practice on behalf of the Chamber's Institute for Legal Reform.

Legal Newsline is owned by the Institute for Legal Reform.

"If investors are getting that sort of return, either defendants are paying a lot more or claimants are receiving a lot less," Beisner told the Journal.

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