Insights

• Brazil is seeking more investment from China, with almost half of China’s investments in South America being in Brazil.
• However, the recent wave of insolvencies in Brazil could threaten these investments, particularly if fraud is uncovered, leaving investors to navigate the complex Brazilian insolvency landscape.
• By undertaking a more assertive, multijurisdictional approach, combined with new insolvency tools in Brazil, investors can seek to gain the upper hand.

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• Investments from the Middle East into Mainland China are growing recently as many see increasing opportunities for returns.
• However, there are risks that may materialize if investors become embroiled in a global dispute with Chinese companies.
• Investors should consider ways to increase their leverage and expand their options, including by bringing disputes directly into China through Hong Kong.

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• Many Chinese debt issuers are still undergoing a wave of defaults, putting offshore general unsecured creditors at risk.
• One way to secure substantial recovery is to enforce keepwell agreements, promises by a PRC onshore parent company to maintain a debt issuer’s liquidity and solvency.
• This can expand the range of enforcement targets, increasing creditors’ options and chances of success.

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• The U.S., UK and their allies are continuing to find tools to exert pressure on China.
• Businesspeople in Greater China with global interests could become targets of financial sanctions if diplomatic relations between China and the U.S. deteriorate further.
• We explain how financial and wealth advisors can mitigate the risks these clients face if they act early and decisively.

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• More Chinese companies are entering the Korean market, running head-on into family-owned conglomerates known as chaebols.
• In a dispute, the overwhelming dominance of chaebols and the intricacies of the Korea legal market make it hard for Chinese companies to find a way out.
• However, by combining creative legal and PR strategies, Chinese companies can put pressure on their competitors and protect their business interests.

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• In Chapter 11 bankruptcy cases where the chances of recovery seem slim, global unsecured creditors may have to get creative and look outside the U.S. to improve their prospects.
• Assets in the People’s Republic of China (PRC) – the world’s second largest economy – offers a surprising source of asset recovery opportunities.
• We explain how creditors can unlock value in China and maximize their recovery.

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• As geopolitical tensions heighten, Chinese ultra-high-net-worth individuals may become increasingly at risk of becoming the target of forfeiture by hostile foreign governments.
• Governments around the world have shown increasing willingness to go after assets owned by those in disfavored jurisdictions.
• By deploying a coordinated global strategy, Chinese UHNWIs can lawfully defend their legitimately earned wealth.

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• A Chinese court recently recognized a commercial judgment issued by the English High Court in a landmark judgment.
• China has also made it easier for Hong Kong arbitrations to be recognized and enforced in China, as well as opening the door to interim measures.
• Our Claim Monetization team analyzes what these developments mean to foreign judgment and award creditors looking for opportunities in a historically tricky jurisdiction.

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• Mainland China is undergoing a wave of credit defaults, and creditors should use every tool available to maximize recovery.
• Keepwell agreements, a promise by a PRC onshore parent company to maintain an offshore debt issuer’s solvency, is one option for overseas enforcement.
• Creditors can use them to launch a multijurisdictional recovery campaign to drive up pressure on the debtor and reach a near-term settlement.

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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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• In light of the ongoing PRC-U.S. trade dispute, Chinese companies are more likely to face charges in U.S. courts against civil claims of trade secret theft.
• Civil trade secret misappropriation cases in U.S. courts can be particularly complex and high-stakes for Chinese companies on the defensive end of cross-border disputes.
• Chinese companies, their executives and legal representatives should familiarize themselves with U.S. IP protection standards in the face of pending cross-border litigation. 

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• For those considering investing in projects tied to China’s Belt and Road Initiative (BRI), corruption and bribery are major areas of concern.
• In the event of fraud or misconduct allegations, parties and their counsel will need to understand and anticipate how global anti-corruption enforcers might approach such investigations.
• Carrying out a series of “stress tests” or appointing an independent third-party examiner are two examples of proactive measures companies can take to mitigate the risk of being on the wrong end of an anti-corruption investigation.

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• Chinese businesses tend to favor offshore jurisdictions for setting up joint venture (JV) structures, but deadlock can ensue if partners differ into a dispute.
• A litany of offshore legal tools exists, from provisions in the JV's constitutional documents to the appoint of a receiver to restore control to the wronged party.
• However, the process for deploying these options differ based on each jurisdiction, and it is advisable to seek counsel before acting on any strategy.

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• International creditors continue to face significant challenges when monetizing claims against debtors based in the People's Republic of China.
• Actions such as a standalone freezing injunction can be used in English common law jurisdictions to freeze assets that are held by innocent third parties.
• Injunctions and receiverships can be made without giving notice to the debtor, bestowing the "element of surprise."

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• For international creditors, monetizing claims against debtors located in the People’s Republic of China has proven difficult.
• The first challenge is finding where the assets are, specifically via offshore discovery.
• Time is of the essence, and “freezing” the money is next.

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