(Credit: Watchara Ritjan/Shutterstock.com)Houston Funder Sues Another Plaintiffs Firm Over Unpaid Loan
Breach-of-contract suits like this one may become more common if courts stay closed to slow spread of the coronavirus, one consultant said.
March 26, 2020 at 12:47 PM
3 minute read
A Houston litigation funder has sued California trial lawyer Vincent Howard, alleging he failed to pay $281,000 he owes on a $400,000 loan signed in 2017. Such suits may become more common in the near future as court closures around the U.S. delay trials and cause financial stress for some law firms.
The latest suit was filed by Series 5—Virage Master, which has previously sued a number of firms in an effort to seek repayment of loans extended to fund litigation.
Breach-of-contract suits filed by litigation funders may become more common, given the current economic volatility resulting from the coronavirus pandemic and the closing of some courts in an effort to slow the spread of the virus. Houston law firm consultant Bill Cobb said it depends on terms of the loan agreement, but disputes may arise if a funder, for instance, loans a firm money to try a lawsuit within 180 days, but the firm is unable to do that because of court closures and backlogs.
In the most recent suit, however, it's unclear what caused the alleged delay in payment. In a petition filed on Tuesday in state district court in Houston, Series 5-Virage Master alleged Howard and his firm Howard Law breached a contract to repay the $400,000 loan, which was provided at a 22% annual interest rate.
Virage alleged that terms of the loan agreement obligate the defendants to pay at least 60% of case proceeds to help retire the loan, but Howard has "refused to comport with their obligations."
According to the petition, the outstanding balance of the loan is $281,113, which includes $232,469 in principal. Interest is accumulating at a rate of $174 a day.
The lender is seeking a declaratory judgment of its rights in connection with the terms of the loan agreement, damages and attorney's fees.
Howard, managing shareholder of plaintiff's firm Howard Law and a past president of the Orange County Trial Lawyers Association, could not immediately be reached for comment.
Houston lawyer Ashish Mahendru, who represents Virage Master, also could not immediately be reached for comment. Mahendru has represented Virage Master in other lawsuits filed against lawyers to seek repayment of loans.
He represented Virage Master in a suit against Ramsdell Law Firm of Springfield, Missouri, and owner Daniel R. Ramsdell. In 2019, a judge in Harris County signed a $2.4 million final judgment in Virage Master's favor.
Also, Mahendru represents Virage Master in a suit filed in Harris County seeking $5.74 million from Sulphur Springs personal injury lawyer Gregg Price. The suit, filed in October 2019, alleged Price has not paid back a penny of a 2015 loan. Price has denied the allegations and the suit is pending.
|Read More
Houston Litigation Funder Wins $2.4M in Dispute With Missouri Law Firm
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