As private debt continues to grow rapidly as a global asset class, investors and asset managers must remain vigilant to the increasing risks that accompany this expansion.
With deal complexity on the rise, these risks are particularly acute in cross-border, high-value credit arrangements.
A coordinated multi-jurisdictional strategy enables creditors to secure more substantial leverage in pursuit of favorable recoveries in response to defaults.
It is now established that keepwell agreements—commitments made by a parent company in the People's Republic of China (PRC) to uphold the financial stability of its subsidiary—are enforceable under Hong Kong law.
Beyond enforcing keepwell agreements in the PRC, unsecured creditors should proactively expand their recovery overseas to improve their prospects for recovery.
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.
Following a six-month trial in the Incora/Wesco matter, U.S. Bankruptcy Judge Marvin Isgur delivered an oral decision in favor of Kobre & Kim’s clients on July 10, 2024.
Judge Isgur found that Incora/Wesco’s 2022 uptier transaction breached the lien protections in the Company’s 2026 secured note indenture.
Kobre & Kim's clients challenged the transaction, which involved US $250 million in gross new money and the exchange of over US $1 billion of other debt.
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.
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.
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.
