Insights | Kobre & Kim — Disputes and Investigations

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.

Prices of Russian and other sovereign debt are falling as their economies buckle, presenting both opportunities and challenges for investors.
Enforcing the debt against sovereign entities is already difficult, more so when sanctions are involved.
As our Claim Monetization & Dilution team explains, non-traditional strategies may go further in putting maximum pressure on sovereigns and maximizing returns.

Mainland China is undergoing a wave of credit defaults, and creditors should use every tool available to maximize recovery.
Keepwell agreements, a promise by a PRC onshore parent company to maintain an offshore debt issuer’s solvency, is one option for overseas enforcement.
Creditors can use them to launch a multijurisdictional recovery campaign to drive up pressure on the debtor and reach a near-term settlement.

Offshore bondholders of distressed Chinese real estate companies often lack leverage in restructuring negotiations, with those companies’ assets located mostly in China.
China Evergrande Group is just one of the many Chinese real estate companies teetering on default, with wide-ranging consequences.
However, by taking deploying creative strategies and taking positions against competing stakeholders, activist bondholders can carve out a direct path to monetization.