Litigation finance firm says it was misled by Ecuadorian plaintiffs' lawyers

By Jessica M. Karmasek | Apr 18, 2013

NEW YORK (Legal Newsline) -- The chief executive officer of litigation hedge fund Burford Capital LLC filed a sworn declaration in a New York federal court Wednesday, testifying that a lawsuit filed against Chevron Corp. in Lago Agrio, Ecuador, is tainted by fraud.

Burford's Christopher Bogart, in his declaration filed in the U.S. District Court for the Southern District of New York, outlined his firm's knowledge of the plaintiffs' lawyers' misconduct in the Lago Agrio litigation.

Burford, which previously back the plaintiffs' litigation efforts with a $4 million investment, terminated its financing agreement with the Ecuadorian plaintiffs in 2011.

The firm said it was fraudulently misled about the plaintiffs' lawyers' -- Steven Donziger and Washington-based law firm Patton Boggs -- conduct on the case.

Chevron and Burford have agreed to forgo any future claims against either party, and the firm has renounced its remaining economic interest in the case.

"As lawyers and as business people, my colleagues at Burford and I have been deeply concerned about the mounting evidence of fraud and misconduct that appears to have permeated the Lago Agrio Litigation," said Bogart, who is also the former executive vice president and general counsel of Time Warner Inc. and a former litigator at Cravath, Swaine & Moore.

"Had Burford received the full disclosure to which it was entitled under the Funding Agreement, it certainly would not have invested in this matter."

Bogart said in his declaration that his firm was "particularly appalled" to learn of emails -- predating the funding agreement by many months -- among the plaintiffs' counsel indicating that they could "go to jail" if the true facts came out.

"Again, the existence of that sentiment -- whether or not well-founded -- would clearly have been material to Burford's investment decision, was not disclosed to Burford and would have resulted in Burford declining to invest," the CEO wrote.

Read Bogart's full declaration here.

Bill Fenton, a spokesman for the Lago Agrio plaintiffs team, said in a statement Wednesday the Burford filing -- and declarations from two experts at Colorado-based Stratus Consulting Inc. last week -- are merely "PR gestures" by Chevron.

"Chevron's campaign in the courts of New York and in its extensive PR efforts are built on claims of fraud concerning the so-called Cabrera report submitted to the court in Ecuador prior to that court awarding a $19 billion judgment to the Lago Agrio plaintiffs against the oil company," he said. "But Chevron protested Cabrera's work long before the end of the trial and the judge, taking their protests into account, excluded Cabrera's report from consideration.

"So whatever the content of Cabrera's report, it had no consequence. Neither did the appellate court consider the Cabrera submissions."

Fenton said the declarations are just more of the oil giant's "non-stop, big-money attempt" to intimidate and malign the plaintiffs, their lawyers and supporters.

"It has no bearing on what happened in Ecuador, does nothing to remediate the harm that even Chevron has admitted took place in the Amazon and constitutes a sideshow that will not stop efforts to attach Chevron properties in Argentina, Canada, Brazil and around the world," he said.

As to Burford's declaration, in particular, Fenton said the firm's "dissatisfaction" flows out of an old dispute, in 2011, over money it thinks they are entitled to and the plaintiffs' unwillingness to agree.

"Dressed up as a complaint about misconduct it is, as its core, just a disagreement about money," he said.

From Legal Newsline: Reach Jessica Karmasek by email at jessica@legalnewsline.com.

Want to get notified whenever we write about Amazon.com ?

Sign-up Next time we write about Amazon.com, we'll email you a link to the story. You may edit your settings or unsubscribe at any time.

Organizations in this Story


More News

The Record Network