Deloitte’s doubts about a recent investment by PLA Litigation Funding, a firm controlled by financier Javier Botín specialized in investing in complex judicial and arbitration proceedings in Spain and Portugal. The entity that audits its accounts has warned about the valuation of a lawsuit acquired in 2023 by this fund, which has more than 60 million invested in litigation.
PLA was created in 2020 and is one of the pioneers in Spain in this sector, well established in the United States and still little developed here, but which is expected to take off with the new law on collective actions that Congress is processing as a bill. This rule will regulate for the first time the activity of these firms, which are dedicated to financing judicial or arbitration proceedings and in the event of a favorable resolution, they keep a percentage of the amount obtained.
PLA Litigation Funding has a multi-sector approach. Among the “solutions” it offers its clients are the financing of judicial proceedings and arbitrations, the monetization of claims, the purchase of judgments and awards, the location of assets and foreclosures or restructurings and insolvency situations, according to its website, in which it states have more than 60 million invested.
The firm, which Botín’s holding company, Inversiones Zulu, has valued at zero euros in its 2023 consolidated accounts, accessible through Insight View, channels its activity in Spain through a company with very discreet asset figures, PLA Litigation Fund SA. Last year it declared just over 900,000 euros of turnover.
In Luxembourg they have a vehicle, Gayo Capital Fund SICAV-FIS, which brings together several PLA litigations whose nature is not detailed in their accounts. This is an alternative investment fund approved by the Commission de Surveillance du Secteur Financier (CSSF) of the Grand Duchy. In June 2021, it introduced in its statutes that its objective is to obtain funds (with a minimum of 125,000 euros per investor) for “litigation against public or private organizations”, in domestic or international disputes and “in judicial matters with connections to Spain.” .
The vehicle closed 2023 with assets valued in books at 5.1 million, according to the accounts it has just presented in Luxembourg. Last year it incorporated two new investors and acquired two new lawsuits, the one it calls “Ocean Project”, which it purchased on February 9, 2023, and the “Lienzo Project”, acquired on December 11, 2023. Last May 3 made a new investment, “Salinas Project”. It also manages the “Cloth”, “A Coruña” and “Ale” projects and has a special purpose company (SPV) to raise funds.
The 2023 accounts of this vehicle contain a reservation from PLA’s auditor, Deloitte, related to the so-called “Ocean Project” that it acquired in February 2023. The fund gives it an accounting valuation of 1.41 million, which represents 31.12 % of the net value of its net assets as of December 31, which makes it the second most important litigation at the end of 2023, only surpassed by “A Coruña”, to which it grants a market value of 2,238 million (52% of the total).
Deloitte explains that this investment in the “Océano” project has been valued by an independent third party using various scenarios and estimates, and that the fund has been based on four different sources of information. But the firm explains that it has not had enough data to verify how that valuation has been calculated. And hence that caveat. elDiario.es contacted PLA Litigation Funding, but the firm has declined to comment.
20% commission
In its accounts, the fund explains that PLA Litigation Funding charges a fixed advisory fee of between 2% and 2.5% to shareholders, plus a performance fee on 20% of income. The Gross Asset Value before accrued performance fees grew by 13% in 2023, compared to 60% in 2022.
The behavior in 2023 was positive, “with cash inflows received by the Ale Project, in addition to the income received during 2022 in the Cloth Project.” In relation to the “Ale Project”, in the first quarter of 2023 it pocketed 577,917.1 euros for “legal procedures” and another 28,046.37 euros for “recovery of legal costs”. In 2024, this project will bring in another 479,595.96 euros.
The firm is led by a State lawyer on leave, Jesús Rodrigo Lavilla, who is completely trusted by Javier Botín. Belonging to a family of lawyers, Rodrigo has been a member of that elite body since 2006. Secretary and managing director at JB Capital Markets, Javier Botín’s investment firm, he was deputy director of the Legal Department of the airline Iberia.
“As State Attorney he has participated in more than 8,200 judicial proceedings before all jurisdictions. He has coordinated more than 850 procedures outside the administration in more than 45 countries, including class actions in the US,” PLA explains on its website.
Rodrigo was assigned to the State Attorney’s Office before the National Court, but it did not take long for him to move to the private sector, as have the majority of his classmates, of whom only a third are still active in that body. The last to sign for a company is the still PP deputy Mar González, who is going to become the new director of the Ibercaja Legal Department after just over a year in politics (she took possession of her seat in July 2023).
Botín is the youngest of the six children of the late Emilio Botín and belongs to one of the richest families in Spain. Brother of the president of Banco Santander, he is a director of the bank and chairs the Botín Foundation.
His firm JB has participated in operations such as the purchase of 8% of the Basque aircraft engine manufacturer ITP Aero in 2021 or the acquisition at a knockdown price in 2016 of Vitaldent, which it sold in 2019 for 350 million, 14 times the amount invested. That operation led to a complaint for fraud by a franchisee of the dental clinic chain. A judge from Pozuelo de Alarcón (Madrid) filed it in 2021.
With a subsidiary that invests in portfolios of unpaid loans (Savia Asset Management), JB was last year alongside the Apollo fund in the bid for Vodafone Spain. The discreet financier confronted the property registrar Mariano Rajoy a couple of years ago for his refusal to register the accounts of one of his companies.
In recent months, he has led a consortium to bid for the Riojan delicatessen Palacios Alimentación, the main Spanish manufacturer of chorizos, tortillas, pizzas and other prepared dishes, in an offer valued at 425 million, according to what he announced. Expansion.
This consortium includes the family office of Alexandre Pierron-Darbonne, former owner of the Navarrese agricultural group Planasa and shareholder of the egg producer Dagu or the Wallbox shippers. This ultra-rich Frenchman is one of the main financiers of Civismo, an ultraliberal think tank that has just honored former judge Manuel García Castellón. A few days ago they gave him an award in which the PP lawyer in several of his judicial cases has presented the former magistrate as a “scourge of corruption.”
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