The ability of bondholders to sue bond issuers to enforce their rights without going through the cumbersome process of instructing a bond trustee has long been in question.
However, an important ruling in New York court, obtained by Kobre & Kim on behalf of a group of international bondholders, took the first step in establishing standing.
This decision potentially removes key barriers to enforcement in key offshore jurisdictions such as Cayman and the British Virgin Islands (BVI), as well as Hong Kong.
The ability of bondholders to sue bond issuers to enforce their rights without going through the cumbersome process of instructing a bond trustee has long been in question.
However, an important ruling in New York court, obtained by Kobre & Kim on behalf of a group of international bondholders, took the first step in establishing standing.
With New York law governing a vast amount of emerging market company debt, this could allow global bondholders to dramatically speed up creditor response times.
U.S. courts traditionally have been a generous forum for foreign judgment creditors.
A recent ruling from a New York state court has further broken down barriers for recognition of a foreign judgment in the U.S., even when the debtor is subject to a foreign insolvency proceeding.
The New York decision is part of a trend of U.S. courts rejecting "fairness" and "corruption" challenges to Russian courts' judgments. Similar challenges can be overcome with the aid of proper counsel.