Hedge fund Gramercy has become embroiled in a dispute over the strategy and legal representation of a £36bn claim against BHP and Vale arising from the 2015 Mariana dam disaster in Brazil, according to a report by the Financial Times.
The case highlights the tensions that can emerge when alternative investment capital is used to finance large-scale litigation.
Gramercy, which has provided more than $700m in funding to Pogust Goodhead across its cases, backed the litigation boutique’s former chief executive Tom Goodhead but also pressed him to consider settling the Mariana claim after BHP and Vale offered approximately $1.4bn, according to correspondence and excerpts of a June 2025 conversation reported by the Financial Times.
The case involves more than 420,000 Brazilian claimants seeking compensation over the collapse of the Fundão dam in Minas Gerais, which killed 19 people and caused extensive environmental damage.
Robert Koenigsberger, Gramercy’s managing partner, told Goodhead that the funder could not continue committing capital to the litigation indefinitely if what it regarded as a reasonable settlement opportunity was rejected.
The exchange has become central to a dispute over the extent to which a litigation funder should influence decisions over a case it is financing, particularly where the interests of the capital provider and those of the underlying claimants may diverge.
Goodhead was removed as chief executive of Pogust Goodhead around two months after the conversation, in a move supported by Gramercy. He has alleged that pressure from the funder to accept what he considered an undervalued settlement contributed to his removal.
Gramercy has rejected that account, saying Goodhead was removed “for cause” over financial allegations. Those allegations are disputed by Goodhead, who has denied breaching his duties and said his spending while running the firm was disclosed and appropriate for a multi-billion dollar founder-led business.
The dispute has subsequently widened to include the claimants’ legal representation. A committee representing the majority of the Mariana claimants has raised concerns about Pogust Goodhead and alleged that the firm has been operating under Gramercy’s influence since Goodhead’s departure.
The committee has instructed Bailey Glasser International to manage the case, with UK litigation firm Hausfeld also involved. NorthWall Capital, another litigation funder that previously invested alongside Gramercy, is understood to be financing the alternative legal team.
Gramercy has accused Goodhead of seeking to become involved in the Mariana litigation in order to profit from the eventual outcome, and has criticised NorthWall’s involvement. NorthWall has rejected Gramercy’s allegation and said decisions on legal representation should rest with the claimants and their legal advisers.
Pogust Goodhead disputes the claimant committee’s authority to remove the firm from the case. It has warned that transferring the litigation could affect existing funding agreements, insurance arrangements and the timetable established for the claim.
Both sides have taken the dispute to the High Court in London.
