There was a very interesting paragraph near the end of Burford Capital's announcement Monday that it has acquired a British litigation insurance provider. Burford, you may recall, is the litigation-finance company that in November 2010 made a controversial $4 million investment in the Ecuadorean litigation accusing Chevron of despoiling the Lago Agrio region of the Amazonian rainforest. Burford put up the money to pay the plaintiffs' new lawyers at Patton Boggs after Chevron's counsel at Gibson, Dunn & Crutcher succeeded in driving their longtime lawyer, Steven Donziger, out of the litigation.

Burford's investment -- along with money from other, less conventional litigation funders -- kept the Ecuadoreans' case alive through a megabillions Ecuadorean court judgment against Chevron and into appellate review of the award. It has also permitted the Ecuadorean plaintiffs to battle Chevron's efforts to block enforcement of the judgment through U.S. courts.

But according to Monday's press release, Burford is not putting any more capital into the Chevron case, despite a maximum financing commitment of $15 million. "Further developments have led Burford to conclude that no further financing will be provided and thus decide to reduce the commitment level in the special situations portfolio accordingly," the release said. Burford also disclosed that it hedged its initial $4 million investment by selling a corresponding interest in the case to a third party in December 2010. So at this point, according to Burford, it has no remaining exposure in the Chevron litigation, only upside potential.

James Tyrrell Jr. of Patton Boggs told me that Burford decided to distance itself from the case after Chevron "made it clear that there would be repercussions if [Burford] continued funding," he said. "Chevron dealt with them directly." (Burford principal Christopher Bogart didn't respond to my email request for comment.) According to Tyrrell, Burford sold the hedge against its initial $4 million investment to "a corporate entity." He said Burford's decision not to up its investment doesn't mean the litigation funder has developed doubts about the plaintiffs' case, but rather is a sign that Chevron has intimidated funders. (As Leigh Jones of Reuters has reported, Patton Boggs made the same assertions in two suits against Gibson Dunn that have been dismissed; Tyrrell said the firm is appealing the dismissals.)

Funding for the plaintiffs' case has become a big issue in the most recent briefing in the 18-year (and counting) litigation. In November, two months after the U.S. Court of Appeals for the Second Circuit lifted an injunction barring the Ecuadoreans from acting to enforce the foreign court's judgment, Chevron returned to the trial judge who originally entered the injunction, U.S. District Judge Lewis Kaplan of Manhattan federal court, with a new request. Gibson Dunn asked Kaplan for a prejudgment attachment of any award against it by the Ecuadorean court, citing its interest in its own pending racketeering suit against some of the plaintiffs and some of their former lawyers and experts.

In a 44-page brief that details the plaintiffs' funding arrangements, Chevron argued that the Ecuadoreans are selling interests in what the oil company calls "a corrupt judgment" because that's their only asset. If they disperse their judgment to overseas funders, Chevron asserted, Chevron won't be able to collect whatever award it obtains in the RICO suit. The brief disclosed that in addition to $4 million from a Cayman-based Burford subsidiary, the Ecuadoreans have received $4.25 million from Torvia Limited, a Gibraltar company owned by online-poker billionaire Russell DeLeon. According to Chevron, several other funders have invested smaller amounts in the Ecuadoreans' case, ranging from $150,000 from an individual investor to $1 million from a U.S. entity called the New Orleans Group.

The Ecuadoreans responded to Chevron's latest sally not in Kaplan's courtroom but at the Second Circuit. In an appellate brief filed this weekend, Patton Boggs argued that Chevron's attachment request was simply an alternative route to the injunction the appeals court lifted in September. The firm asked the appeals court to extend its stay on one piece of Chevron's countersuit against the Ecuadoreans to halt the oil company's racketeering claims as well. "The TRO and attachment that Chevron seeks would effectively restore the portion of the vacated preliminary injunction that this court apparently considered to be most objectionable of all -- barring the Ecuadorean plaintiffs from funding their cause," the brief said. "They would prevent the Ecuadorean plaintiffs from being able to fund the preparation and analysis of any future recognition or enforcement actions. Perversely, they would also prevent the Ecuadorean plaintiffs from funding the defense against Chevron's racketeering allegations in New York."

The Second Circuit still hasn't issued an order explaining its decision in September to lift the injunction, so I'm not sure of the basis for Patton Boggs's assertion that the appeals court was more deeply concerned about the Ecuadoreans' ability to fund the litigation than, say, respect for foreign courts. Certainly Patton Boggs and its clients are concerned with funding this case to a conclusion.

I sent emails requesting comment to a Chevron spokesman and Chevron counsel Randy Mastro of Gibson Dunn but didn't hear back.

(Reporting by Alison Frankel)