Parabellum Capital, a firm that seeks to profit from financing lawsuits, is welcoming home one of the men who essentially founded the business.
The firm has hired Howard Shams from Credit Suisse as a managing principal, working alongside a group that he assembled nearly seven years ago. He will be a co-leader of the firm alongside Aaron Katz.
Separately, Parabellum has obtained more than $200 million in capital facilities to back its business.
The move reunites what until early last year was Credit Suisse’s legal risk strategies and finance unit, which Mr. Shams helped found in 2006. The team, which spun off from the Swiss bank last January, specializes in an unusual sort of investment: aiding plaintiffs in their costl legal battles, in exchange for a piece of any future winnings.
Firms like Parabellum, Bentham Capital and BlackRobe Capital have sought to cash in on the high waves of litigation that has swept across corporate America. Cases backed by these shops have become more widespread, argued by top law firms like Simpson Thacher & Bartlett and Latham & Watkins.
Still, the practice has its detractors, who say that litigation financing may encourage more frivolous lawsuits.
Mr. Shams spent 15 years at Credit Suisse and a predecessor firm, Donaldson, Lufkin & Jenrette, focusing on “special situations†that seek to profit from unusual asset classes like distressed debt and vendor receivables. He was formerly a lawyer who worked at firms like Dewey Ballantine, focusing on bank lending work.
