Videolink here: Litigation Funding: A multibillion dollar industry forinvestments in lawsuits with little oversights
Ever heard of litigation funding? It's arelatively new, multibillion-dollar industry where investors fund lawsuits.Here's the idea: say someone was wronged by a big corporation but has no moneyto sue it. A litigation funder will pay for their court battle. In essence:they're betting on the lawsuit the way traders bet on stocks. If it'ssuccessful – they make money, sometimes a lot of money; if it fails – thefunders get nothing – their investment is lost.
Litigation funding can help in cases whereotherwise the little guy who's suing would just get crushed or lowballed bydefendants with deep pockets. Problem is – this market is exploding with nearlyno rules or oversight.
Craig Underwood: This is quite an honor to beable to drive you around in my truck.
We start our story in the rolling hills ofVentura County, California, where Craig Underwood's family farm had beengrowing jalapenos for three decades.
Lesley Stahl: So you used to have peppers asfar as the eye could see.
Craig Underwood: As you were driving throughthe Valley, peppers were everyplace.
Lesley Stahl: But I heard that you had onecustomer?
Craig Underwood: One customer. Huy Fong Foods.
Huy Fong makes the world-famous Sriracha HotSauce. In 2016, they abruptly severed ties with Underwood. His business driedup overnight.
Lesley Stahl: Is there anything growing hereat all? Can you tell?
Craig Underwood: There's nothing planted here.And up here, it's just weeds --
Facing ruin, he sued Huy Fong for breach of contract and won:$23 million.
Periscope News Group - Jennifer Banmiller
Informent: Nicole Hausmann