Sep 10, 2026
Prominent Alberta separatist leader and Calgary lawyer Jeffrey Rath is facing mounting financial and legal turmoil as an American litigation funder seeks nearly $109 million in alleged defaulted debt.
The new court claims, detailed in recent filings by Delaware-based Diriba Investments LLC, add significant pressure to the high-profile legal advocate, whose assets are already under a court-ordered freeze amid accusations of misappropriated First Nations trust funds.
Delaware investor claims firm defaulted on $109M agreement
According to court documents, Diriba alleges that Rath and his firm, RathPC, defaulted two years ago on a 2018 litigation financing agreement tied to various legal cases, including First Nations claims and COVID-19 restriction challenges. The Delaware funder claims the outstanding debt now stands at $108.8 million, plus interest and legal costs.
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The legal proceeding threatens to entangle the proceeds of some of Rath’s biggest cases and places his firm under severe financial strain.
“If you are a law firm, these are very, very serious matters,” Roderick Wood, a bankruptcy and insolvency law professor at the University of Alberta, told Global News. “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.”
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Litigation funding allows third-party investors to finance a law firm’s court cases in exchange for a portion of eventual financial awards or settlements. Diriba alleges that RathPC breached its contractual duties by failing to submit required monthly updates, withholding information on client departures and omitting reports on incoming case proceeds.
Diriba issued a formal notice of default in November 2024. In July 2026, the company issued a demand letter alongside a formal notice of intention to enforce security under Canada’s Bankruptcy and Insolvency Act, characterizing RathPC as an “insolvent person” unable to meet its obligations as they come due.
Rath declined to answer specific questions regarding the claim. In previous statements on his ongoing legal battles, he noted he would address matters in court and declined to comment on personal financial issues outside the public record.
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Separatist figurehead faces parallel court actions from First Nations
Beyond his legal practice, Rath has served as a prominent figurehead and legal architect for the Alberta independence movement, co-founding the Alberta Prosperity Project and speaking at town halls across the province.
However, the $109-million claim from U.S. investors represents only part of his growing legal troubles.
Rath and his firm are already locked in high-stakes court fights with former indigenous clients. Both the Tallcree First Nation and Sturgeon Lake Cree Nation have filed court actions alleging RathPC misappropriated millions of dollars from trust funds meant for band beneficiaries.
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Court documents filed in separate actions by CBC News show that Tallcree obtained a Mareva injunction freezing Rath’s personal and corporate bank accounts after alleging millions were improperly removed from its settlement trust. Tallcree claims an $8.5-million settlement refund meant for the trust was instead transferred into a credit union account controlled by RathPC, where it was subsequently used to purchase $8 million in precious metals bullion and a $500,000 bank draft.
An investigative receiver appointed by the court is currently attempting to trace missing trust assets.
Diriba is now applying to expand the receiver’s mandate to trace legal fees and other assets pledged as security under its financing agreement. A Calgary court is scheduled to hear Diriba’s application on September 14.
None of the allegations brought by Diriba Investments LLC, Tallcree First Nation or Sturgeon Lake Cree Nation have been tested or proven in court.
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Leslie Kennedy served as an editor at Thomson Reuters and for Star Media Group, followed by a number of years as a writer and editor and content manager in marketing communications, before returning to her editorial roots. She is a graduate of Humber College’s post-graduate journalism program and has been a professional writer and editor ever since.
