How private investors stand to profit from billions in L.A. County sex abuse settlements

"Since the historic April payout to resolve thousands of claims of sex abuse in county-run facilities, law firms have saturated L.A.'s airwaves and social media with campaigns seeking new clients. For months, government officials have quietly questioned who is financing the wall-to-wall marketing blitz. The ad Cook heard was from Sheldon Law Group, one of several law firms active in sex abuse litigation in California that receive backing from private investors, according to loan notices and SEC filings. The investors, which often operate through Delaware companies, expect to profit from the payouts to resolve the cases."

"Sheldon, based in Washington, D.C., has been one of the most prolific L.A. advertisers. The firm has already gathered roughly 2,500 potential clients, according to a list submitted to the county. The lawsuits started being filed this summer, raising the prospect of another costly settlement squeezed out of a government on the brink of a fiscal crisis. "We act in the best interests of our clients, who are victims in every sense of the word and have suffered real and quite dreadful injuries," a spokesperson for Sheldon Law Group said in a statement. "Without financial and legal support, these victims would be unable to hold the responsible parties, powerful corporate or governmental defendants, accountable.""

Law firms launched widespread advertising campaigns across airwaves and social media after an April payout resolving thousands of sex-abuse claims in county facilities. Advertisements target potential victims and encourage them to join new litigation. Loan notices and SEC filings indicate several firms receive backing from private investors, often operating through Delaware entities, who expect to profit from settlements. Sheldon Law Group has been a prolific advertiser and has compiled roughly 2,500 potential clients. Lawsuits filed this summer raise the possibility of additional costly settlements for a county facing a fiscal crisis. Firms say investor support enables representation for victims.

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