Insights | Kobre & Kim — Disputes and Investigations

The Korean corporate landscape is becoming more favorable for activist campaigns.
Foreign activist investors have new opportunities to push for change and maximize value, even against the biggest chaebols.
Our team explains what these developments mean and how investors can take advantage.

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.

Recent developments in Korea have made Korean chaebols attractive to overseas activist investors.
However, the intricacies of Korean capital markets and legal practice, and the influence of chaebols, mean investors need to tread carefully.
Only by engaging in creative strategies that consider local and overseas factors can investors have the greatest chance of maximizing shareholder value.

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.

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.

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.

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.

Corporate directors and their counsel should understand the nuances of cross-border independent investigations, which can create pitfalls for even the most experienced corporate advisers.
Although the stated risks are common to many types of cross-border investigations, they can be unexpected for corporate advisers whose primary experience is U.S.-based.
Strategically navigating the pitfalls stated within is vital because the business judgment rule does not protect a board or a company from violations of the foreign laws discussed.