Litigation Funders Seek Damage Control After Burford Drop (2)

After a scathing report from a short seller questioning litigation finance company Burford Capital Ltd.’s accounting practices caused shares of the industry’s largest player to plunge more than 45% on Wednesday, others in the still young industry were seeking to head off any further fallout.

One executive at a private litigation fund was making phone calls to assure investors that their fund does not use the types of methods to value ongoing litigation assets that short seller Muddy Waters said Burford implemented.

Other litigation funding executives attempted to ring-fence Burford and its financial accounting method, which requires the company to ...