Muddy Waters' Block Calls Burford's Accounting 'Misleading'

The transcript discusses Burford, a litigation finance company, highlighting its unique business model and the issues with its financials and accounting practices. Concerns are raised about its misleading financials, light disclosure regime, and Level 3 fair value accounting. The role of major shareholders in financial engineering is examined, along with a comparison to IMF Bentham. The transcript concludes with a discussion on short position strategy and risk management.

What is the primary business model of Burford?

• Manufacturing legal software

• Investing in real estate

• Funding high-stakes litigation for plaintiffs

• Providing loans to small businesses

Why is Burford's accounting considered misleading?

• They have no accounting department

• They do not disclose their financials

• They employ Level 3 fair value accounting

• They use outdated software

What is a significant issue with Burford's disclosure regime?

• It is not regulated by any authority

• It is overly complex

• It is too light for a company of its size

• It is too transparent

How have major shareholders like Invesco and Woodford been involved with Burford?

• They have increased transparency

• They have manipulated private investment values

• They have been passive investors

• They have sold all their shares

What was the outcome of the Napeo Pharmaceutical litigation funded by Burford?

• It was a significant win

• It was settled out of court

• It was a loss for Burford's client

• It is still ongoing

How does IMF Bentham's accounting differ from Burford's?

• IMF Bentham uses the same accounting as Burford

• IMF Bentham does not account for litigation assets

• IMF Bentham does not use mark to market accounting

• IMF Bentham uses Level 3 fair value accounting

Why was Burford chosen for scrutiny over other companies?

• It is the only company in the industry

• It uses unique accounting practices

• It has no competitors

• It is the smallest company in the industry