Insights | Kobre & Kim — Disputes and Investigations

As geopolitical tensions pressure sovereign debt, more investors are taking their disputes against sovereign states and entities to arbitration and judicial forums. There is a world of difference between demanding payment of a defaulted debt, judgment, or award from a sovereign and seeing the sovereign pay up.
Meanwhile, Chinese private investors have become more prominent in sovereign-related investments through acquisitions, joint ventures, and infrastructure projects in Europe, Africa and Latin America.
Investors and other claimants should not be afraid to stand up to sovereign debtors with aggressive non-traditional strategies.

A wave of cross-border financial distress and insolvencies is rocking Brazilian companies – Brazilian airline GOL filed for Chapter 11 in the U.S. in January 2024.
Although international creditors have historically faced a Brazilian insolvency landscape that has created many practical impediments, things are changing.
A new Brazilian bankruptcy law, if combined with a multijurisdictional approach touching the U.S. and offshore, can give creditors additional leverage toward a favorable recovery.

The Americanas fraud has led a wave of insolvencies in Brazil, shaking the market.
This wave of financial distress has ensnared international creditors into the slow-moving Brazilian insolvency landscape.
However, new developments in Brazil – combined with an assertive cross-border strategy – can help creditors gain the upper hand and reach a quicker resolution.

Global bond issuers looking to restructure their debt have often turned to English courts, relying on debtor-friendly rules such as the ability to cram down creditors.
Two recent English court decision, however, are improving prospects for global bondholders.
Creditors who are willing to take swift and forceful action against even the biggest players can see the greatest chances of success.

Tightening global credit conditions will put more corporate high-yield debt issuers and private borrowers from emerging markets at risk of default.
This can spiral into complex cross-border disputes with creditors, threatening the company’s survival.
Fortunately, there are creative and aggressive strategies available for debtors to limit their exposure and protect their bottom lines.

As the place of incorporation for many entities, Delaware has become a center for resolving high-stakes, cross-border insolvencies.
But many parties, especially from outside the U.S., default to using Chapter 11 bankruptcy, when it can be long, drawn-out, unpredictable and costly.
Our Insolvency and Delaware teams outline alternatives in the state that could be quicker and cheaper.

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.

When a debt comes due, standing up to a global institutional lender can seem daunting for Indian debtors, especially if disputes scatter overseas.
Regardless of whether a lender feels generous or not, however, there are steps debtors can take to increase their leverage and fortify their defenses.
These include fighting for better terms, buying more time and holding lenders accountable.

Recent judgments have provided victims with a new route to claim damages from third parties, and thereby widen the pool from which to make a recovery.
Claimants in numerous common law jurisdictions now can bring two new types of claims against associates of fraudsters who have assisted in the dissipation of assets after a freezing order or judgment has been obtained.
Creditors seeking to make recoveries against fraudsters based in offshore jurisdictions should consider these two new, but related, claims against third parties when developing their asset recovery strategy.