Excalibur Suit Shows Litigation Funding at Its Riskiest
A $1.65 billion international suit provides a window into a little-known world.
[Editor's note: This article has been updated to reflect the court's ruling on September 10.]
On November 20, 2012, Rex Wempen sat on the witness stand in London's High Court. The former U.S. Army Green Beret was testifying in a $1.65 billion case that his company, Excalibur Ventures, had brought against a group of oil businesses. The dispute stemmed from a soured oil exploration deal in Kurdistan that Excalibur had signed with a company called Texas Keystone Inc. While the trial was essentially about a business deal, a secondary theme arose during the litigation: How could Excalibur, which had virtually no assets, afford to bring such a complicated and expensive case?
Under cross-examination, Wempen was pressured to reveal who was behind Psari, an entity that was paying his lawyers at Clifford Chance.
"Who is Psari?" asked barrister Jonathan Gaisman, who was representing three of the defendant oil companies.
"They are a company, along with [a] New York hedge fund, who [sic] is standing behind us for litigation finance," Wempen responded.
"Who are the shareholders of Psari? Who are the parties of interest?" Gaisman demanded.
"I'm happy to write the names down on a piece of paper to share with the court," Wempen offered.
"It is not a question of writing it down on a piece of paper. Who are they?"
Wempen and Gaisman sparred for several minutes, and Wempen finally turned to Justice Christopher Clarke. "Am I supposed to write this down?" he asked.
"No, you are supposed to reveal it," Clarke instructed.