Insights | Kobre & Kim — Disputes and Investigations

The December 2024 Chapter 15 filing of Brazilian cement group Intercement is the latest in a series of insolvency cases involving Brazilian companies with cross-border implications.
Navigating the multijurisdictional aspects of distressed situations could prove both demanding and rewarding for international creditors and investors.
Since a recent bankruptcy law was enacted, several tools have become available in Brazil for international creditors looking to improve their leverage.

As high energy prices and a wider global weakening economy threaten the shipping and maritime industries, many Cyprus-based companies face serious financial distress.
This poses a risk for creditors or those with deep financial ties to those companies as they increasingly default on their bonds and bilateral loans.
Creditors of Cypriot companies in those situations should focus on a multijurisdictional approach to achieve recovery.

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.

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.

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.

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.

The Middle East is opening up to cross-border investors, creditors and claimants, as Saudi Arabia’s adoption of rules based on the UNCITRAL Model Law on Cross-Border Insolvency demonstrates.
The openness is not limited to that country – the United Arab Emirates has also made strides that gives more tools for creditors considering a global enforcement campaign.
We explain what these developments mean for creditors.

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.

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.

U.S. courts traditionally have been a generous forum for foreign judgment creditors.
A recent ruling from a New York state court has further broken down barriers for recognition of a foreign judgment in the U.S., even when the debtor is subject to a foreign insolvency proceeding.
The New York decision is part of a trend of U.S. courts rejecting "fairness" and "corruption" challenges to Russian courts' judgments. Similar challenges can be overcome with the aid of proper counsel.