Insights

• A Kobre & Kim client received a recent ruling by the New York Supreme Court that eases global bondholders’ ability to monetize claims.
• Justice Joel Cohen found Zhu Xinli, the sole director of Huiyuan Juice subsidiary Huiyuan Beijing, personally liable for more than US $114 million. 
• The decision means that bondholders increasingly have monetization options against recalcitrant debtors, including the ability to collect at par from well-heeled decision-makers when the primary obligors may be effectively insolvent, judgment-proof, or even already in bankruptcy proceedings.

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• Over the past few years, Kobre & Kim has successfully enforced cross-border judgments and arbitration awards collectively valued valued in the hundreds of millions of US dollars.
• Many of the firm’s engagements have involved judgments and awards valued in the billions or even tens of billions of US dollars.  
• Large monetary judgments or awards cannot be successfully enforced by a strategy that solely focuses on pursuing assets worldwide.

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• 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.

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• The United Kingdom is pushing its overseas territories, including offshore centers such as the British Virgin Islands and Cayman Islands, to publicly identify ultimate beneficial owners of corporate structures.
• This loss of privacy for ultra-high-net-worth individuals with legitimate needs could see their reputations and interests threatened by unwarranted scrutiny.
• Proper preparation can help individuals and their advisors to not only limit potential damage, but also allow them to react expediently if a crisis arises.

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• Russian individuals and companies with legitimate global interests still need to litigate their disputes in overseas jurisdictions.
• Despite the current state of relations between the United States and Russia, U.S. courts are still giving Russian litigants a fair hearing.
• We outline recent examples of successes that demonstrate how Russian litigants can still access powerful U.S. legal tools.

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• 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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• Distressed debt investors who are beneficial owners or contingent creditors of bonds face uncertainty when bond issuers stop paying.
• Courts in key jurisdictions are beginning to answer the question of whether creditors can wind-up issuers but are offering diverging decisions.
• We explain how a recent ruling in the BVI opens the offshore jurisdiction to creditors considering a cross-border enforcement campaign.

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• Ultra-high-net-worth individuals embroiled in onshore government, commercial or family disputes may find their offshore trusts a vulnerable target.
• These often-aggressive attacks set up a complex clash of onshore and offshore law, and demand an equally aggressive and comprehensive response.
• There are steps UHNWIs and their advisors can take to reduce their risk exposure and respond to attacks on their wealth.

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• Judgment and award debtors often hold assets in offshore jurisdictions such as the BVI – but these places are notoriously creditor- and enforcement-friendly.
• When cornered by a creditor, debtors often find few – if any – legal avenues to challenge the claim against them.
• However, a recent Kobre & Kim victory in the BVI demonstrates that, through deep familiarity of and ability to connect both offshore and foreign law, debtors can defy conventional wisdom and succeed.

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• Minority shareholders have options to stand up to majority shareholders and directors, such as unfair prejudice claims or derivative actions.
• However, if these do not achieve the desired result, one more tool is available to exert pressure: a just and equitable winding up.
• We lay out how this tool can be applied in five key jurisdictions for corporate structures in Asia.

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• Minority shareholders may be surprised to learn that they have effective options when a director or other fiduciary has harmed the company.
• However, the situation may be complicated when structures cross borders, as many corporate structures in Asia do, including spreading offshore.
• Our Claim Monetization team explores how shareholders can deploy derivative actions in five key jurisdictions across Asia Pacific, the UK and the Caribbean as part of an effective cross-border strategy.

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• Minority shareholders may have certain remedies available when they feel their rights have been unfairly prejudiced by the majority.
• However, the situation may be complicated when structures cross borders – typical corporate structures in Asia may spread across offshore and other key regions.
• Our Claim Monetization team lays out the basic parameters of the tools open to minority shareholders across five key jurisdictions.

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• Many parties, especially those based in Asia Pacific, soon discover that a recalcitrant debtor can frustrate enforcement of a hard-won arbitration award.
• In cross-border enforcement campaigns, the debtor may throw up obscure legal challenges to cause delays and distraction.
• A recent Kobre & Kim victory demonstrates how, through quick and strategic action, these distractions can be defeated and pressure can be maintained on the debtor.

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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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• A recent decision involving document disclosure in offshore courts presents an opportunity for PRC-based companies to obtain business intelligence.
• This decision — which was made in the English Court of Appeal and will likely influence offshore jurisdictions and Hong Kong — has shed light on how nonparties can get copies of court documents, evidence, written arguments and judgments.
• To leverage the opportunity effectively, local expertise of offshore court processes and this new decision, in addition to on-the-ground support in PRC, will be needed.

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