Most claim reviews begin with the merits. The theory is sound, the documents are good, the damages are large. Weeks of diligence follow. Only near the end does someone ask whether the defendant can pay a judgment, and by then the answer has become an inconvenience rather than a gating question.
We reverse that order. Before significant diligence begins, we want a working view of how a successful outcome turns into cash.
Four questions we ask first
- Who is the paying party? The named defendant is not always the source of recovery. Insurers, parent companies, guarantors and third parties who enabled the conduct can matter more.
- Where are the assets? Operating cash, receivables, real property and equity interests each carry different enforcement paths. Assets abroad require recognition proceedings before attachment.
- Is there insurance, and how much remains? Directors and officers liability policies, professional liability coverage and fidelity bonds often fund settlements. Defense costs erode many policies as the case proceeds.
- What is the solvency trajectory? A defendant that is solvent today may not be solvent in three years. Insolvency moves recovery into a claims process and changes priority.
How collectability changes the model
A damages expert may support a figure of $60 million. If the defendant's reachable assets and insurance total $25 million, the recovery range is set by the second number, not the first. Pricing, budget and structure should follow the recoverable figure.
Collectability work also shapes strategy. Early asset preservation, joinder of solvent parties and settlement timing ahead of policy erosion can each add more value than an incremental improvement in the merits.
The practical result
Leading with collectability produces faster answers. Matters that fail the test are declined early, before the claimholder and counsel spend time on a full review. Matters that pass it move into diligence with a recovery thesis already in place.
This article is general information, not legal or investment advice.