Carbonia is an investment and analysis firm specialized in singular assets, pioneer in Spain in the field of the acquisition of rights derived from litigation.
The investment in assets of this particular type can take different forms and structures, as well as offer a wide range of exposure and commitment levels for the parties involved.
Carbonia has the market knowledge and unique human and technical capabilities to innovate and implement schemes ranging from acquisition, expert portfolio monitoring or asset financing to potential securitization or any combination thereof.
Its services also cover the efficient monitoring of assets by the team, which benefits from extensive experience in the litigation sector and is supported by a powerful IT platform developed exclusively by Carbonia.
The offer to the client to carry out the operation is almost always based on an initial payment for the claim or portfolio of claims and the subsequent distribution of the result of the judgment or arbitration award.
The acquisition of the Litigation portfolios of the listed companies Acciona and Telefónica have been two of the most relevant operations driven by Carbonia in the sector in recent years.
Carbonia also invests and participates in tax credit monetization transactions.
Carbonia, together with its LPs, provides capital to companies in transactions secured by the company's legal and contingent assets.
Companies can monetize their deferred tax assets ("DTAs") through a tax credit agreement, which allows the company to give up a portion of the tax savings from its DTAs in exchange for an upfront equity investment.
Due to the COVID-19 outbreak, many companies have accumulated tax losses and deductions attributable to unused credits (collectively referred to as net operating losses or "NOLs") and can monetize the value of these NOLs and other DTAs through a tax credit agreement immediately.
Tax credit agreements allow companies and financial institutions to:
- Access a source of liquidity with contingent payments tied solely to the company's profitability that never exceed the company's otherwise realized tax benefit; and
- Monetize an asset that is not typically valued in the public markets with a non-dilutive source of capital.
Waterfalls can be structured in different ways and against different types of DTAs, depending on the firm's preferences and available DTAs.
Carbonia invests in companies with significant patent portfolios and/or acquires patent portfolios and then monetizes them appropriately.
Patent litigation financing, generally referred to as patent infringement financing, involves the financing of legal proceedings brought by the injured party for the use, copying or sale of the injured party's invention. Essentially, the inventor alleges that the defendant unlawfully used, copied or sold the invention without the express approval of the inventor.
Typical candidates include individual inventors, small entities and universities, as they generally do not have the financial resources to self-fund a patent lawsuit.
Carbonia in patent litigation funding can:
- Invest directly in cases with various formulas that include an upfront payment, funding of trial costs, and a waterfall scheme to share in the final outcome of the case.
- Provide law firms with the capital they need to maintain their operating and marketing expenses while dealing with IP cases.
- Give law firms the opportunity to take on precedent-setting cases.
- Provide firms with the financial strength they need to expect the largest settlement possible.
Carbonia Special Services ("CSS") offers new alternatives for companies in special situations. There are two main elements that differentiate CSS in the market:
- Its holistic approach to complex situations, which typically involves not only legal expertise, but also business experience and strategic thinking.
- Its flexible structure, which allows it to combine internal and external teams depending on the needs of the transaction.
CSS is primarily oriented to restructuring, insolvency, corporate reorganization, asset monetization and finance scenarios.
CSS is able to provide a broad portfolio of financial solutions, primarily targeting :
- Funds as liquidity providers
- Banks in their non-performing asset deleveraging strategies
As a source of new liquidity to circumvent the financial stress situation with tailor-made financial solutions. CSS can be the right partner in the restructuring process leading the coordination of the process together with other advisors.
Carbonia Global Insurance holds license Ref.1826/2022 (J-4093) granted by the Ministry of Economy and Digital Transformation to operate as an Insurance Broker in Spain. The company's scope of action extends to the figure of Broker. At the same time Carbonia can also act with its Operating Partner in the specific insurance configuration for the identified risk. Carbonia Global Insurance's M&A insurance covers W&I, Tax, Environment, Title and Litigation.
The main objectives of Carbonia Global Insurance are:
W&I Insurance (merger and acquisition transactions)
The W&I policy is designed to provide comprehensive coverage for representations made by the seller in a sales contract.
This type of insurance provides coverage to the insured in the event that the identified risk materializes, with the policy covering the loss caused by the identified risk. The scope of coverage is designed specifically for each risk and may include damages arising from failure, settlement agreements and/or defense costs. A wide range of risks can be insured, including ongoing litigation, potential litigation, arbitration, and litigation or arbitration appeals.
This insurance is an effective tool for managing the tax risk associated with various corporate structures, issues identified in sale and purchase processes and other tax matters where there may be uncertainty.
Transactional environmental insurance provides coverage for M&A transactions with significant environmental exposure. This type of insurance provides coverage for buyers and/or sellers against losses arising from legal liabilities associated with existing and/or future contamination situations.
This type of insurance provides coverage to the insured against a wide variety of risks related to the title and the real estate asset itself. There are title policies and specific risk policies.
A title policy can cover title problems such as mortgage fraud, boundary disputes, seller's failure to make representations, and lack of title of previous owners, among others. A specific perils policy can cover a wide range of identified risks, such as use restrictions, defective title documents, non-existent or defective licenses.
There is a rapid evolution in insurance products such as insurance to cover the sale of NPLs that can be managed by Carbonia Global Insurance.
Carbonia is also an active investor group in areas such as Real Estate or Renewables promoting and designing acquisition structures, adapted to each operation and adjusted to the specific interests and investment criteria of the parties.
Carbonia also provides Equity and Financing to Professional Services firms that need to modernize and optimize their financial structures. The high knowledge of the legal sector of Carbonia's team allows structuring the different operations according to the needs of the different organizations.
The alternatives are very varied and we have analyzed very diverse structures and operations related to Equity contribution, ordinary financing, working capital financing, financing of international expansion, financing of growth plans, mergers and acquisitions, acquisition of invoices or Wip, risk coverage, etc.