Can an investor lose money after the funded claimant wins at trial?

Yes. Burford's YPF-related assets rested on a $16.1 billion final judgment against Argentina entered on September 15, 2023. Argentina appealed on October 10, 2023, the appeal was argued on October 29, 2025, and the Second Circuit reversed the judgment on March 27, 2026. The assets' consolidated fair value fell from $2.6 billion at December 31, 2025 to $145.9 million at September 30, 2026, against a cost basis of $202.9 million.

How long does an appeal take?

Often one to three years in US federal courts, sometimes longer. The YPF appeal took about two and a half years from notice to decision. The notice itself is quick: under Federal Rule of Appellate Procedure 4(a)(1)(A), it must generally be filed 'within 30 days after entry of the judgment or order appealed from.' Each month of appeal is a month of no return on the funder's capital unless its terms step up with time.

Can the winner collect while the appeal is pending?

Usually not if the loser posts security. Federal Rule of Civil Procedure 62 stays execution for 30 days after judgment and lets the losing party obtain a stay 'by providing a bond or other security.' The bond protects the winner if the judgment is affirmed, which is why funders value it; Bench Walk's security interest in Silver Bull's claim expressly covered 'rights under any appeal bond.'

Do arbitration awards face appeals?

Fewer. ICSID Convention Article 53 says an award is not subject to 'any appeal or to any other remedy except those provided for in this Convention'; Article 52 allows annulment only on five narrow grounds, with an application within 120 days. Silver Bull's 10-Q said annulment of its May 2026 award, if sought, would be expected to take about 18 to 36 months. Non-ICSID awards can be challenged in the courts of the seat.

Do funders count a trial win as a concluded case?

Not usually. Burford does not treat matters as concluded 'until there is no longer any litigation risk remaining,' so a judgment under appeal stays in the pending portfolio and its value moves with appellate milestones. Burford's valuation policy adjusts value by 'case milestone,' which is why a trial win raises the mark and a reversal removes it.

How should an investor think about appeal risk?

As a separate stage with its own probability and timetable. Ask what share of a fund's value sits in judgments under appeal, how marks changed after trial wins, and whether appeal bonds are in place. A portfolio where large unrealized gains rest on appealed judgments can fall sharply on one ruling.

Appeal Risk

Litigation Finance & Legal Claims

Definition

Appeal risk is the risk that a judgment or award won by a funded claimant is reversed, reduced or delayed by an appeal or, for arbitration awards, by annulment or set-aside proceedings. It affects both the outcome and the timing of a funder's return. Burford's 2025 Form 10-K warns that 'a loss in a litigation matter may result in the total loss of our capital and balance sheet asset value associated with that matter,' and its YPF judgment was reversed on appeal in 2026.

Why it matters

Appeals turn a trial win from cash into another bet: the judgment can be reversed or cut, and even if affirmed, payment waits for the appellate court. For funders that mark cases at fair value, a trial win can create a large unrealized gain that depends entirely on the appeal, as Burford's YPF assets did at 46% of its capital provision assets before the 2026 reversal. Treat appellate odds and timing as part of the underwriting, not an afterthought. Ask how much of a fund's reported value is in judgments still under appeal, and whether those judgments are bonded.

Common misconceptions

•A trial win is not a realized return, because the judgment can be reversed or reduced on appeal, as the YPF judgment was.
•An appeal is not only a delay, because the appellate court can remove the entire award.
•A bonded judgment is not paid, because the bond secures payment only if the judgment survives the appeal.
•Arbitration awards are not appeal-free everywhere, because ICSID awards can be annulled and other awards challenged at the seat.
•Appeal time is not free time, because the funder's capital earns nothing until payment unless its terms step up.

Technical details

Worked example (illustrative): what an appeal does

Funder deployed $5.0 million; entitlement 3.0x, $15.0 million.

Trial won at year 3: if paid then, about 44.2% a year.

Defendant appeals: 75% chance of affirmance, decided 18 months later.

Expected proceeds: 0.75 x $15.0 million = $11.25 million, 2.25x.

If affirmed and paid at year 4.5, the annual return falls to about 27.7%; if reversed, the investment is lost.

Stages after a trial judgment (US federal court)

30-day automatic stay of execution (FRCP 62(a)).

Notice of appeal within 30 days (FRAP 4(a)(1)(A)).

Stay by bond or other security (FRCP 62(b)).

Briefing, argument and decision; possible remand.

Further review: rehearing or a petition to the Supreme Court.

What AltStreet's reviews and filings show

Burford's YPF-related assets rested on a $16.1 billion judgment against Argentina entered September 15, 2023; the Second Circuit reversed it on March 27, 2026, and the assets' consolidated fair value fell from $2.6 billion at December 31, 2025 to $145.9 million at September 30, 2026; notice of appeal October 10, 2023; argument October 29, 2025.

Burford 10-Q (September 30, 2026): YPF cost basis $202.9 million consolidated against fair value $145.9 million; further US proceedings and international arbitration being pursued.

Silver Bull Resources' funding agreement with Bench Walk Advisors (September 5, 2023) committed up to $9.5 million for legal, tribunal, expert and defined corporate costs of its ICSID arbitration against Mexico; on May 29, 2026 the tribunal dismissed the claim, concluding it lacked jurisdiction and/or the claim was time-barred, and ordered Silver Bull to pay about $998,000 of Mexico's legal costs, and Bench Walk then terminated the agreement (Silver Bull 10-Q for July 31, 2026); annulment would be expected to take about 18 to 36 months.

Bench Walk was entitled to 'a share of any proceeds arising from the Claim ... of up to 3.5x Bench Walk's capital outlay (or, if greater, a return of 1.0x Bench Walk's capital outlay plus 30% of Claim Proceeds),' secured by a security interest in the claim, its proceeds and rights under any appeal bond.

Questions about appeal risk

Which funded judgments are under appeal, and what share of fund value do they represent?

Is each judgment bonded or secured?

How were marks changed after trial wins, and what would a reversal do?

Does the funder's return step up during the appeal?

Is there judgment preservation insurance, and what does it exclude?

How investors apply the term

Investors usually apply this term by tying the definition back to the controlling documents and then asking which cash flows, rights, restrictions, or valuation assumptions it changes. A useful review looks at the term alongside fees, leverage, liquidity, reporting frequency, and manager discretion rather than treating it as a standalone concept.

The practical diligence test is simple: identify who benefits if the assumption is wrong, who has control when conditions change, and what evidence the investor receives after closing. Terms that cannot be reconciled to documents, cash movements, and monitoring data should be treated as marketing shorthand until proven otherwise.

Frequently asked questions

Can an investor lose money after the funded claimant wins at trial?: Yes. Burford's YPF-related assets rested on a $16.1 billion final judgment against Argentina entered on September 15, 2023. Argentina appealed on October 10, 2023, the appeal was argued on October 29, 2025, and the Second Circuit reversed the judgment on March 27, 2026. The assets' consolidated fair value fell from $2.6 billion at December 31, 2025 to $145.9 million at September 30, 2026, against a cost basis of $202.9 million.
How long does an appeal take?: Often one to three years in US federal courts, sometimes longer. The YPF appeal took about two and a half years from notice to decision. The notice itself is quick: under Federal Rule of Appellate Procedure 4(a)(1)(A), it must generally be filed 'within 30 days after entry of the judgment or order appealed from.' Each month of appeal is a month of no return on the funder's capital unless its terms step up with time.
Can the winner collect while the appeal is pending?: Usually not if the loser posts security. Federal Rule of Civil Procedure 62 stays execution for 30 days after judgment and lets the losing party obtain a stay 'by providing a bond or other security.' The bond protects the winner if the judgment is affirmed, which is why funders value it; Bench Walk's security interest in Silver Bull's claim expressly covered 'rights under any appeal bond.'
Do arbitration awards face appeals?: Fewer. ICSID Convention Article 53 says an award is not subject to 'any appeal or to any other remedy except those provided for in this Convention'; Article 52 allows annulment only on five narrow grounds, with an application within 120 days. Silver Bull's 10-Q said annulment of its May 2026 award, if sought, would be expected to take about 18 to 36 months. Non-ICSID awards can be challenged in the courts of the seat.
Do funders count a trial win as a concluded case?: Not usually. Burford does not treat matters as concluded 'until there is no longer any litigation risk remaining,' so a judgment under appeal stays in the pending portfolio and its value moves with appellate milestones. Burford's valuation policy adjusts value by 'case milestone,' which is why a trial win raises the mark and a reversal removes it.
How should an investor think about appeal risk?: As a separate stage with its own probability and timetable. Ask what share of a fund's value sits in judgments under appeal, how marks changed after trial wins, and whether appeal bonds are in place. A portfolio where large unrealized gains rest on appealed judgments can fall sharply on one ruling.