An American litigation funder is threatening to call in more than $100 million in alleged debt from Alberta separatist leader and lawyer Jeffrey Rath and his firm, Global News has learned.
Delaware-based Diriba Investments LLC alleges in court documents that Rath and his professional corporation, RathPC, defaulted two years ago on a financing agreement tied to First Nations and COVID-19 litigation cases — a debt the lender now says totals nearly $109 million, plus interest and costs.
Rath and his corporation now face pressure on two fronts. As Global News reported last month, two former First Nations clients have filed separate court actions seeking the return of tens of millions in disputed trust funds, and now an American creditor is pursuing a nine-figure claim against the firm’s legal proceeds and other assets.
“If you are a law firm, these are very, very serious matters,” said Roderick Wood, a University of Alberta law professor who is an expert in insolvency and bankruptcy law.
“If you have a secured party in a position where they are enforcing their claim, any debtor, not just a law firm, is really in a situation you would rather not be in. It’s a very challenging situation.”
Rath declined to answer questions from Global News.
In addition to leading a successful legal firm, the Calgary lawyer has become one of the Alberta separatist movement’s most visible advocates in recent years, crisscrossing the province for town halls, travelling to Washington to meet with American officials, and appearing in national and international media.
But behind the scenes, his firm was pursuing cases bankrolled in part by litigation funding — an arrangement that has allegedly left the firm, and potentially the proceeds of some of Rath’s biggest cases, indebted to U.S. investors.
Litigation funding is a large and controversial industry, primarily in the U.S. It allows outside investors to pay a lawyer’s costs to pursue legal cases in exchange for a share of the compensation if the case is won.
In a 2018 agreement, Diriba and Western Springs Investments LP, another funder incorporated in Delaware, signed on to finance some of RathPC’s legal work. In return, the firm granted the funders security over a negotiated portion of its resulting fees and other compensation. Western Springs appointed Diriba to act as agent for both funders.
Rath is accused by a U.S. litigation funder of defaulting on a contract first signed in 2018.
Global News
Diriba alleges Rath’s firm breached the agreement by not submitting monthly reports, not keeping funders informed of material case developments, not reporting proceeds from covered cases, not responding to information requests, and not making required payments.
The funder also alleges Rath and RathPC failed to disclose that unnamed claimants had terminated their relationship with the firm.
Documents show that in November 2024 the company demanded an accounting and payment of money it said it was owed, formally warning RathPC that it intended to pursue assets pledged under the financing agreement.
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The alleged debt and contractual breaches have not been adjudicated.
Global News could not confirm which specific cases Diriba funded or how much capital was advanced.
RathPC’s 2018 funding deal initially covered two unidentified cases, heavily redacted court documents show. But a 2023 amendment expanded the scope to all of his firm’s existing and future claimant-side work, explicitly mentioning First Nations treaty claims and COVID-restriction litigation.
Redactions obscure how Diriba arrived at the $108.8-million figure.
Diriba’s Calgary-based lawyer, Kelsey Meyer, declined to answer specific questions.
Questions to Burford Capital, a global litigation-finance giant closely affiliated with Diriba, also went unanswered. Paul Mysliwiec, who swore the affidavit as Diriba’s authorized representative, is Burford’s deputy general counsel.
Funder: Rath’s firm an ‘insolvent person’
On July 21, 2026 — nearly two years after issuing its notice of default — Diriba demanded records from RathPC, including its financial statements, a list of all active lawsuit claims, and a full accounting of money recovered in those cases, court documents show.
Six days later, Diriba followed up with a formal demand letter and separately served RathPC with a notice of intention to enforce security under the Bankruptcy and Insolvency Act, describing RathPC as an “insolvent person” and alleging the firm may be unable to pay its debts as they come due.
Diriba also alleges that RathPC breached its financing agreement by granting a competing security interest to another company, Vance SPV LLC. Global traced Vance’s origins to Delaware, a popular destination for starting a company because it offers privacy – it does not require businesses to disclose their directors, shareholders, or executives.
Vance was incorporated in May 2020 — exactly one month before the company registered a lien over all of Rath’s and RathPC’s current and future personal property, on top of the claim Diriba already held. Court-filed financial records also show the company paid RathPC $13,682 in September 2024.
Global News could not identify or contact Vance’s owners because of Delaware’s limited public disclosure requirements.
Receivership expansion sought
Global News also could not determine why Diriba waited until July 2026 to begin formal enforcement of the default.
Wood suggested funders sometimes hold off if they expect payments to start coming in.
“If there is a lot of potential revenue, they might be saying, ‘Okay, you’re in default … but we may not be moving in immediately because … there may be further revenue coming in, which would alleviate the situation’.”
But as Global News has previously reported, Rath has been under increasing pressure from two First Nations over financial misappropriations.
According to court documents, Tallcree and Sturgeon Lake allege that RathPC misappropriated millions from their trusts, which held funds for beneficiaries who were minors, and which Rath’s firm administered after winning huge settlements for the bands. They say they fought for years to receive financial statements that would have revealed those disputed withdrawals.
Other court documents show that when Diriba issued its default notice in November 2024, Tallcree was still seeking its 2024 accounts, and financial auditor Grant Thornton was demanding proof that more than $12 million withdrawn from Sturgeon Lake’s trust was authorized.
Rath has denied wrongdoing in the Nations’ cases.
Though Rath declined to answer questions on this story, he previously told Global: “I’m responding through court proceedings at an appropriate time. I will not comment on personal financial matters that are not properly part of the public record or any other matter that is currently before the courts.”
Although Diriba has stated it will not seek funds belonging to Tallcree or Sturgeon Lake, its claim could still complicate the bands’ attempts to trace the funds they allege Rath has misappropriated, which are currently playing out in separate court actions.
“There is a potential … controversy over who has the higher-ranking claim – the secured creditor who is claiming the security interest in the property of the professional corporation, or the beneficiaries of the trust,” Roderick Wood, the insolvency expert, said.
Tallcree First Nation alleges that an $8.5 million refund should have been deposited in a trust and distributed but instead was deposited into RathPC’s Bow Valley Credit Union account. Court records indicate that Rath said he was entitled to the funds.
Supplied.
Those Nations’ fights have now intensified. In July, Tallcree obtained an interim Mareva injunction — a court order freezing a person’s or company’s assets — prohibiting a defendant from hiding or moving funds that could otherwise satisfy a future judgment.
A court-ordered investigator, called a receiver, is also tracing the funds the Nation claims are missing. In particular, the receiver is investigating an $8.5-million refund RathPC had been ordered to repay its trust. Tallcree says the money instead moved into a new bank account and quickly turned into $8 million in bullion, plus a $500,000 draft payable to Rath.
Diriba wants to expand the receiver’s mandate to trace legal fees and other assets the funders say were pledged to them. It argues that Rath’s court-ordered financial disclosure in the Tallcree case also does not show where any remaining bullion – or the proceeds from bullion sales – ended up.
A hearing on Diriba’s application to expand the investigating receiver’s remit will be held on Sept. 14 in Calgary.