Delaware’s federal court forced litigation funders into the open. Its most important court still lets them hide

The contrasting approaches of Delaware’s federal court and its premier court on litigation funder transparency highlight a critical regulatory inconsistency with direct implications for middle-market credit professionals. As litigation funding increasingly influences creditor recoveries and restructuring outcomes, understanding where these backers must disclose their involvement affects risk assessment and valuation. The persistence of opacity in Delaware’s most influential court complicates due diligence, underscoring the need for vigilance in evaluating exposure to hidden litigation finance interests in leveraged credit deals.