August 18, 2021
Chinese property developer Tahoe Group has been embroiled in financial crisis, facing a large-scale bond redemption and cross-default at over US $800 million for its dollar-denominated bonds alone. "No-action" clauses tie bondholders, but an exception at bond maturity gives many investors a chance to recoup a return. Kobre & Kim's John Han and Henry Cheung outline creative strategies beyond restructuring that can maximize returns in a blog post for Reorg.
The key for activist investors is to deploy an opportunistic strategy using offensive investigation tools to uncover decision-makers' assets and relationships. Focusing on potential offshore assets, for example, could level the playing field when compared with onshore creditors, while targeting business and personal relationships can give activist investors the leverage needed to maximize the value of recovery.