A litigation financier’s foray into a battle over a dead Saudi businessman’s multibillion dollar estate is a cautionary tale for outside funders investing in family fights.
UK-based Therium Capital, eyeing a cut of a potential 10-figure settlement, bankrolled the wife and daughter of the late Saudi billionaire Osama Ismail Abudawood in an estate fight with his brothers. After at least 18 lawsuits in three countries, the pair are settling for a little more than one-third of what they say they were first allotted under Sharia law. Along the way, they stopped showing up in court, cycled through lawyers, and were ordered to pay more than $750,000 after being held in contempt.
Funders typically stay away from estate cases because they are unpredictable and messy. A rare example of funders wading into family disputes came when Burford Capital, a major player in the industry, earned $103 million in 2021 on an investment in divorce proceedings involving a Russian billionaire.
“The litigation is often driven by things that are not just economics,” said Reid K. Weisbord, a trusts and estates professor at Rutgers School of Law. “There’s emotion, there’s grief, there’s sometimes irrational behavior feeding into the cost of litigation that makes it more expensive to litigate. Why would a litigation funder want to fund that?”
Therium is known for taking on unique cases, such as a lawsuit against Malaysia by the descents of a sultan in which the arbitrator overseeing the dispute was imprisoned.
Osama Abudawood was the head of Abudawood Group, an international conglomerate that makes and distributes products from Procter & Gamble, Clorox, and Quaker in the Middle East. He died in 2017 with the family’s net worth estimated at $4 billion, according to Forbes.
The family fight over his estate pitted Eleanor de Leon, Abudawood’s wife of 23 years, and Alaa Abudawood against his brothers, Ayman and Anas, who are directors of the company. De Leon and Alaa fought for a larger share of the estate, valued between $1 billion and $4 billion, after they said they were initially allotted 24% under Sharia law. They accused Abudawood’s brothers and business partners of diluting the company’s value.
The fight included lawsuits in Saudi Arabia, the US, and the Cayman Islands. Ultimately, a California court in late June ordered de Leon and Alaa to finalize a global settlement worth just $88 million. When the pair refused to comply and skipped court dates, the judge appointed a power of attorney to execute the documents.
Therium agreed to invest in the litigation in 2019. Litigation funding deals are often confidential. The investment wasn’t disclosed until February, when a lawyer representing the brothers alerted the court that an unidentified funder was backing de Leon and Alaa Abudawood.
Therium, de Leon, and Alaa Abudawood did not respond to requests for comment. It’s not clear whether delays in the case impact Therium’s share of the settlement proceeds.
‘Deathbed Pledges’
De Leon alleged that her husband told the family at his deathbed that he wanted her and Alaa to be bought out of the company at the fair market value of their interest in his holdings.
Instead, she said the brothers “refused to honor their ‘deathbed pledges’ and “co-opted the family-owned conglomeration of businesses and corporations to advance their ‘illegal scheme.’”
The families reached a global settlement in 2022, but Eleanor and Alaa delayed signing and demanded additional guarantees shortly after. The case landed in the US District Court for the Central District of California after an arbitrator ruled that the settlement was binding.
The brothers asked the court to enforce the arbitrator’s decision and force de Leon and Alaa to sign the documents. Their lawyer, Mark Holscher of Kirkland & Ellis, told the court the brothers had been unable to track down de Leon and Alaa with the help of a private investigator.
Holscher said the funding arrangement added “a layer of complexity” to the situation. He speculated whether de Leon and Alaa were delaying signing the settlement documents in order to avoid paying Therium.
“Because presumably if you’re a litigation funder and you’re funding this, you would like them to sign the documents so that the litigation funder gets paid,” he said in a hearing.
Holscher declined to comment.
Funding Estate Litigation
Deals like Therium’s and the Burford investment in the Russian billionaire’s divorce case are rare, according to litigation finance broker Robert Martorana.
“Funders tend to avoid cases where there’s a potential for people to act commercially unreasonable,” he said. “Most of the time where you see parties acting in a commercially unreasonable fashion is when there are personal elements involved.”
Martorana is skeptical that the Therium deal was a factor in the delays in the Abudawood settlement. He said funding agreements often include terms requiring parties receiving investments to actively participate in the case, at risk of penalty.
“It definitely wouldn’t benefit them to breach the funding agreement,” he said. “It would only cost them more money.”
