This is not how litigation finance deals are supposed to go.

On Friday, U.S. District Judge Paul Diamond of Philadelphia issued a bench warrant for the arrest of Martin Kenney, a lawyer based in the Virgin Islands, and Garrett Kelleher, an Irish real estate developer. The two are facing prosecution for criminal contempt of court after failing to appear before Judge Diamond at a hearing in December to determine their liability to the insurer Cigna.

The background of Kenney, Kelleher and Cigna is devilishly complicated, as I’ve previously reported. To recount briefly, in the 1990s, a Liberian company sued Cigna in federal court in Philadelphia for denying a large claim based on the Liberian company’s losses in the Liberian civil war. The Liberian company won a jury verdict, but the court entered judgment for Cigna, holding the claim was subject to a war risk exclusion. That judgment was upheld at the 3rd U.S. Circuit Court of Appeals. The U.S. Supreme Court declined the Liberians’ request for review.

In 1998, however, the Liberian company obtained a $66.5 million judgment in Liberian courts. In 2005, the company assigned its interest in the judgment to a company founded by Kenney – the Virgin Islands lawyer – and Samuel Lohman, a U.S. lawyer based in Switzerland. Kenney and Lohman, in turn, sought funding to enforce the Liberian judgment from Kelleher, the Irish developer. Kenney, Lohman and Kelleher, along with other Liberian companies with claims against Cigna, prompted the Liberian insurance commissioner to bring an action in the Cayman Islands against the insurer.

Cigna, meanwhile, had obtained a 2001 injunction in Philadelphia federal court against any efforts to enforce the Liberian judgment anywhere in the world. After the launch of the Cayman Islands action, Cigna went to court in Philadelphia to shut it down.

But that wasn’t all. Cigna also wanted sanctions against whomever had orchestrated the Caymans action. It took the insurer several years and millions of dollars to uncover the roles played by Kenney, Lohman and, in particular, Kelleher. The effort culminated in July 2016, when Judge Diamond ruled the three men had “repeatedly thumbed their noses at the courts of the United States” and were liable to Cigna. Cigna counsel Donald Hawthorne of Axinn Veltrop & Harkrider argued in a subsequent memo that Cigna was owed more than $15 million.

In October, Judge Diamond ordered Kenny, Lohman and Kelleher to appear in person at a Dec. 14 evidentiary hearing on Cigna’s damages. Only Lohman showed up. After the judge ordered his passport seized, Lohman agreed to a $225,000 settlement with Cigna.

Kenney and Kelleher, as they have throughout the case, insisted that Judge Diamond did not have jurisdiction over them. (Neither the judge nor the 3rd Circuit has so far bought that argument.) In early February, the judge said there was ample evidence to charge Kenney and Kelleher with criminal contempt of court. He ordered the clerk of the court to open a criminal docket and referred the case to the Philadelphia U.S. attorney’s office. The judge said that if the U.S. attorney’s office did not want to pursue criminal contempt charges he would appoint a prosecutor. But from the docket it looks like he won’t have to: Earlier this month, two assistant U.S. attorneys entered appearances in the criminal contempt case.

It’s not clear specifically what prompted Judge Diamond to issue Friday’s bench warrant, which orders the U.S. Marshals Service to “take all necessary steps” to arrest and extradite Kenney and Kelleher. The civil docket shows only that since the judge referred the contempt case to prosecutors, Cigna, Kelleher and Kenney have exchanged correspondence about negotiating the amount of Cigna’s damages.

Kenney sent an email statement, via a representative, calling the bench warrant against him and Kelleher “extremely unfortunate.”

“I respect the district court, and I have devoted my life to upholding the rule of law by representing victims of fraud and abuse to provide them with economic justice,” the statement said, in part. “No U.S. court has previously exercised its injunctive power over a non-resident, non-U.S. citizen, and nonparty to a U.S. case before and therefore this remains a troubling state of affairs.”

I left a phone message for Peter Lee, a New York lawyer who appeared for Kelleher in the civil contempt proceeding, but did not hear back.

Cigna counsel Hawthorne said it’s important to keep in mind that Kenney and Kelleher are not being prosecuted because they engaged in litigation funding but because they did not appear before Judge Diamond when they were ordered to do so. “The takeaway is that foreign litigation funders should be mindful that they are subject to orders of U.S. courts,” he said. “Most of them know this.”

I asked Hawthorne about a provision in the U.S House of Representatives’ Fairness in Class Action Litigation Act that would require the disclosure of litigation funding. Hawthorne declined to comment broadly on whether litigation finance agreements should be transparent, but he did emphasize that disclosure would have saved Cigna years of litigation. “Few litigants would have gone to the trouble we did,” he said.

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