Insights

• Minority shareholders of South Korean industrial conglomerates, or “chaebols,” have had few ways to protect their interests against controlling shareholders.
• However, with the passage of new amendments to the Korea Commercial Code (KCC), minority shareholders have gained new tools to even the playing field.
• Our Claim Monetization and Dilution team looks at the key changes and implications that minority shareholders and activist investors should know about.

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• Offshore bondholders of distressed Chinese real estate companies often lack leverage in restructuring negotiations, with those companies’ assets located mostly in China.
• China Evergrande Group is just one of the many Chinese real estate companies teetering on default, with wide-ranging consequences.
• However, by taking deploying creative strategies and taking positions against competing stakeholders, activist bondholders can carve out a direct path to monetization.

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• When monetizing a claim against a debtor, the interplay between arbitration and insolvency is not only critical but also varies by jurisdiction.
• When considering a cross-border strategy, it is essential to understand how each jurisdiction interrelates with the others.
• Kobre & Kim’s global Claim Monetization and Dilution Team answers the critical questions on these intricacies for key jurisdictions in this comparative guide.

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• Special Purpose Acquisition Companies (“SPACs”) can provide sponsors—often high-net-worth individuals—with large returns.
• However, SPACs are not without their risks—there are growing signals the market may be cooling, which could lead to litigation and government enforcement.
• SPAC sponsors and advisors should prepare early in order to reduce their potential exposure.

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• For parties embroiled in contentious joint-venture disputes, it is advantageous but challenging to find new ways to exert pressure on a counterparty.
• If the counterparty is registered in Delaware, however, a pursuing a dissolution proceeding there can prove to be a decisive way to gain leverage.
• As our Claim Monetization & Dilution team explains, this tactic saved a client in a recent case valuable time and money in reaching a favorable settlement.

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• South Korea is an attractive destination for investors in private equity and venture capital, but the country’s changing disclosure rules could risk a drawn-out government investigation.
• Recent changes, designed to relax disclosure for most investors, adds complexity that could be used by the government against international investors to protect domestic companies.
• International parties investing in a Korean company can and should anticipate this risk in a way that maintains both independence and confidentiality.

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• Companies often believe that the only remedy for anti-competitive behavior comes from government intervention.
• However, as a recent U.S. appeals court decision illustrates, private parties can obtain relief themselves, even against “consummated” mergers approved by government regulators.
• This creative strategy is just one of many that companies can deploy by themselves when facing competitive challenges.

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• The U.S. Corporate Transparency Act (CTA), part of the recently-passed National Defense Authorization Act (NDAA), has broken new ground by requiring beneficial owners of U.S. corporate entities to register with U.S. government authorities.
• While the CTA appears to shut out private parties – such as creditors and victims of fraud – from accessing such information, there may be potential creative ways to work around this roadblock, bringing creditors one step closer to a substantial recovery of their assets.
• Nevertheless, creative creditors and their counsel might be able to obtain this information through certain channels to cut off escape routes for debtors and fraudsters, and obtain more complete recoveries.

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• Prevailing case law in BVI and Cayman has historically not allowed injunctions to be granted by the offshore courts unless there is an existing claim against the defendant within the jurisdiction of the Court granting the injunction.
• Fortunately, that position has changed in the Cayman Islands and now in BVI, with claimants, including those from onshore jurisdictions such as Hong Kong and the People’s Republic of China, able to obtain “free-standing” injunctive relief in both offshore jurisdictions.
• With the advent of the new law in BVI, and the continuing willingness of the Cayman Islands’ Courts to make protective orders, victims of fraud are now in a better position than they have ever been to guard against a defendant’s dissipation of its offshore assets whilst they are waiting for a judgment.

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• When a debt comes due, standing up to a global institutional lender can seem daunting for Indian debtors, especially if disputes scatter overseas.
• Regardless of whether a lender feels generous or not, however, there are steps debtors can take to increase their leverage and fortify their defenses.
• These include fighting for better terms, buying more time and holding lenders accountable.

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• Section 1782 discovery in the United States is a powerful tool to access information and gain an edge in foreign proceedings.
• However, the power of this tool and the ease in which it is granted invites parties to use it in service of goals completely unrelated to ongoing proceedings, such as a negative PR campaign.
• Defeating a 1782 application is not easy, but there are counterarguments and cross-border tools available to fight back and turn the tables on an unscrupulous adversary.

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• Investors and creditors can gain potentially large returns if they successfully enforce a large judgment against a sovereign debtor.
• However, with such high-stakes, sovereign governments have begun fighting back using state powers against creditors, turning civil proceedings into a quasi-criminal cross-border dispute.
• A creditor must employ anticipatory and nonconventional counteroffensive measures in order to protect themselves and maximize their odds of success.

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• The current economic downturn has triggered record-breaking amounts of debt owed by governments to overseas investors.
• The crisis, however, has the potential to create large returns for creditors and investors willing to aggressively pursue their claims over a sovereign government.
• A proven yet unorthodox cross-border litigation strategy that catches sovereigns by surprise can achieve the monetization of judgments previously thought too tough to enforce.

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• Even when they leave their home countries for the United States, many individuals still get targeted by aggressive foreign insolvency proceedings that try to get recognized in U.S. courts.
• However, as a recent U.S. Bankruptcy Court decision in favor of a Russian debtor has revealed, there are important steps targets can take to defend themselves.
• By gathering evidence to show the corrupt nature of the foreign proceedings and one’s severed ties with the foreign country, targets can beat back these hostile campaigns.

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• In the midst of the ongoing U.S.-China trade war, U.S. accusers who obtain a judgment in their dispute can use it to interfere with the day-to-day commercial activities of PRC entities.
• To prevent and protect against a judgment, Chinese entities must understand both their own vulnerabilities and their legitimate rights before and after a judgment.
• Pre-emptively preparing a defensive strategy that considers not only judgment defense, but also other likely scenarios – from a civil IP theft dispute to U.S. criminal proceedings under the umbrella of national security – can be quite effective.

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