Tyler Perry

When I was in law school, my business associations professor began the semester by telling the class that debt and equity are essentially the same thing. In her view, both involve money going from one organization to another (i.e., the parties exchange “capital” or “debt”). And both are concerned with how the receiving organization will ultimately compensate its counterparty (i.e., do they get a fixed payment or a share of profits). From this perspective, debt and equity exist along the same continuum, with the primary difference lying in the allocation of risk between the parties through the distribution of control and economic rights. Litigation finance and insurance are quickly approaching a similar moment of conceptual and practical unity in which the dividing line between the two products is blurring and they are increasingly used together.