What if the losing defendant refuses to pay?

The winner must enforce. In US federal court, under Federal Rule of Civil Procedure 69(a), 'a money judgment is enforced by a writ of execution,' following the procedure of the state where the court sits, and the judgment creditor may obtain discovery 'from any person, including the judgment debtor' to find assets. Abroad, the judgment or award must be recognized by courts where the assets are, then enforced under their rules.

How often do defendants refuse?

Rarely in settled commercial cases, more often after contested judgments. Burford's 10-K says that once clients agree a settlement, 'defaults in connection with such payments are rare,' but 'in instances where the adverse party loses and refuses to pay, enforcement efforts may be needed.' Its guide describes helping clients 'collect judgment debts when opponents hide assets or fail to pay.'

What makes enforcement hard?

Assets that are hidden, offshore, held through other entities, already pledged to secured creditors, or protected by immunity. Burford's 10-K notes that if a defendant 'is unable or unwilling to pay or perform or if any of the parties challenges the judgment or award,' collection can be difficult. Sovereign debtors add immunity from execution; insolvent debtors put the creditor in a queue.

Can enforcement itself be funded?

Yes, and some funders specialize in it. AltStreet's Omni Bridgeway review describes Fund 6 as a European enforcement fund, with gross 3.5x on 284 completions at June 2026, and Fund 8 as an insured, debt-financed enforcement vehicle. GAO describes judgment enforcement funding as letting 'a company to sell the rights to an awarded judgment to a funder.'

What did the YPF case show about enforcement?

That enforcement orders can be large and still not produce cash. In June 2025 the court ordered Argentina to turn over its 51% of YPF's Class D shares in partial satisfaction of the $16.1 billion judgment; Argentina appealed and the order was stayed pending appeal, per Burford's 10-K. The judgment itself was reversed in March 2026, which removed the basis for enforcement.

Does interest compensate for slow enforcement?

It adds to the debt, not to the debtor's ability to pay. Federal post-judgment interest under 28 U.S.C. 1961 runs at the weekly average one-year constant maturity Treasury yield for the week before judgment, compounded annually. A debtor with no reachable assets owes more each year and still pays nothing.

Enforcement Risk

Litigation Finance & Legal Claims

Definition

Enforcement risk is the risk that a party who has won a judgment or arbitration award cannot turn it into money because the debtor will not pay and its assets cannot be found, reached or seized. Burford's 2025 Form 10-K defines judgment enforcement as 'using legal and financial strategies to force a judgment debtor to pay an adverse award made by a court' and asset recovery as 'pursuit of enforcement of an unpaid legal judgment.'

Why it matters

Enforcement is the last step between a legal win and an investor's cash, and it can take as long as the case itself. A judgment against a solvent, cooperative defendant is close to money; one against an evasive or immune debtor can be worth a fraction of its face after years of enforcement costs. That is why some funders treat enforcement as a separate business with its own diligence on assets, and why judgments are usually priced at a discount. Before treating a judgment as a near-certain recovery, ask where the debtor's assets are, who else has claims on them, and what enforcement would cost.

Common misconceptions

•A judgment is not a payment, because the debtor can refuse and assets must be found and seized.
•An enforcement order is not cash, because it can be appealed and stayed, as the YPF turnover order was.
•Post-judgment interest does not improve collectability, because it raises the amount owed without creating assets to pay it.
•Assets in another country are not automatically reachable, because the judgment or award must be recognized there first.
•Enforcement costs are not trivial, because finding and seizing assets across jurisdictions can take years of legal spending.

Technical details

Worked example (illustrative): enforcing a $20 million judgment

Judgment of $20.0 million; the debtor pays nothing voluntarily.

Enforcement funder spends $2.0 million over two years on asset searches and proceedings in three countries.

Recovers $12.0 million from two asset pools; a third is protected by secured creditors.

Funder's terms: costs back plus 30% of recoveries: $2.0 million + $3.6 million = $5.6 million, 2.8x on its outlay.

Judgment creditor nets $6.4 million, 32% of the judgment's face, two years after winning.

Enforcement tools

Writs of execution and garnishment (FRCP 69 and state law).

Post-judgment discovery to locate assets.

Turnover orders for shares or other property.

Recognition of judgments and awards abroad (New York Convention for awards, 172 parties).

Insolvency proceedings against the debtor.

What AltStreet's reviews and filings show

Burford 2025 10-K: judgment enforcement and asset recovery defined; settlement payment defaults rare; Turnover Order of June 30, 2025 for Argentina's 51% of YPF Class D shares, stayed pending appeal.

AltStreet's Omni Bridgeway review: Fund 6 (European enforcement) gross 3.5x on 284 completions at June 2026; Fund 8, an insured, debt-financed enforcement vehicle.

GAO-23-105210: judgment enforcement funding lets a company sell the rights to an awarded judgment to a funder.

28 U.S.C. 1961: federal post-judgment interest at the one-year Treasury rate for the week before judgment, compounded annually.

Questions about enforcement risk

Where are the debtor's assets, and are they already pledged?

Is the debtor a sovereign or state-owned entity?

Will the judgment or award be recognized where the assets are?

What will enforcement cost and take, and who funds it?

Is the judgment bonded or insured?

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

What if the losing defendant refuses to pay?: The winner must enforce. In US federal court, under Federal Rule of Civil Procedure 69(a), 'a money judgment is enforced by a writ of execution,' following the procedure of the state where the court sits, and the judgment creditor may obtain discovery 'from any person, including the judgment debtor' to find assets. Abroad, the judgment or award must be recognized by courts where the assets are, then enforced under their rules.
How often do defendants refuse?: Rarely in settled commercial cases, more often after contested judgments. Burford's 10-K says that once clients agree a settlement, 'defaults in connection with such payments are rare,' but 'in instances where the adverse party loses and refuses to pay, enforcement efforts may be needed.' Its guide describes helping clients 'collect judgment debts when opponents hide assets or fail to pay.'
What makes enforcement hard?: Assets that are hidden, offshore, held through other entities, already pledged to secured creditors, or protected by immunity. Burford's 10-K notes that if a defendant 'is unable or unwilling to pay or perform or if any of the parties challenges the judgment or award,' collection can be difficult. Sovereign debtors add immunity from execution; insolvent debtors put the creditor in a queue.
Can enforcement itself be funded?: Yes, and some funders specialize in it. AltStreet's Omni Bridgeway review describes Fund 6 as a European enforcement fund, with gross 3.5x on 284 completions at June 2026, and Fund 8 as an insured, debt-financed enforcement vehicle. GAO describes judgment enforcement funding as letting 'a company to sell the rights to an awarded judgment to a funder.'
What did the YPF case show about enforcement?: That enforcement orders can be large and still not produce cash. In June 2025 the court ordered Argentina to turn over its 51% of YPF's Class D shares in partial satisfaction of the $16.1 billion judgment; Argentina appealed and the order was stayed pending appeal, per Burford's 10-K. The judgment itself was reversed in March 2026, which removed the basis for enforcement.
Does interest compensate for slow enforcement?: It adds to the debt, not to the debtor's ability to pay. Federal post-judgment interest under 28 U.S.C. 1961 runs at the weekly average one-year constant maturity Treasury yield for the week before judgment, compounded annually. A debtor with no reachable assets owes more each year and still pays nothing.