Insights

• Emerging commercial opportunities in South Korea are opening doors for investors worldwide.
• Foreign investors and trade partners continue to face significant challenges when navigating disputes with chaebols, given their dominant position and the complexities of the Korean legal landscape.
• Utilizing antitrust authorities may be one component in building an aggressive and effective strategy.

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• Under Korea’s 2024 Virtual Asset User Protection Act (the “Act”), crypto investors and traders active in Korea face significant regulatory risk.
• While many applaud its proactive effort to combat market manipulation in virtual asset trading, others express concerns over its broad definitions and potential impact on common market-making activities legitimately used in other financial markets.
• We explain how potential targets can prepare for arising risks during this period of transition and uncertainty.

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• In South Korea, family struggles and key shareholder disputes over control of conglomerates, or chaebols, have long posed risks to minority shareholder interests.
• As the chief of South Korea’s Financial Supervisory Service raises concerns over a bid to take over Korea Zinc, many are preparing for impact on shareholder value. 
• Global investors, including activist funds, should consider deploying creative strategies to maximize their positions.

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• The People’s Republic of China (PRC) and South Korea vowed a new start in future economic cooperation,
• However, given the dominance of family-owned conglomerates known as chaebols in the Korean market and the complex intricacies of the Korean legal market, PRC companies may struggle to see a way out when they encounter a dispute.
• PRC companies can combine various creative legal and PR strategies designed to maximize pressure on their competitor and assertively protect their business interests.

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• Many Korean and other Asian investors have poured money into the U.S. commercial real estate market, whether investing directly in property or through commercial mortgage-backed securities (CMBS) or real estate investment trusts (REITs).
• The pandemic, the fastest interest rate hike in decades and a drawback from risk-taking by U.S. regional banks in the wake of bank failures have dealt grievous blows to the market.
• This rapidly changing environment is leaving many investors vulnerable to mortgage defaults and lower valuations on their investments.

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• Opportunities for activist investors in Korea are expanding, but as an ongoing dispute involving LG shows, corporate succession disputes involving chaebols can be a source of risk.
• These family struggles can lead to attempts at corporate changes that conflict with the interests of minority shareholders.
• Investors and activists should understand the risks and their options by working with international counsel to protect their rights.

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• Korean banks are holding an increasing amount of non-performing loans, putting their financial health at risk.
• For many with large portfolios exposed to cross-border unsecured debt and loans to high-yield borrowers, sale and write downs may not be optimal.
• A cross-border strategy to monetize their claims could offer a superior alternative.

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• Aggressive antitrust enforcement is a priority for the U.S., both at home and abroad.
• Korean companies are on the radar, particularly with alleged procurement fraud, putting them at risk of massive fines and multijurisdictional investigations.
• We explain the risks and responses Korean companies should consider.

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• The South Korean Police are expanding their extraterritorial activities, with many multinational companies now in their sightline.
• Many companies are unfamiliar with handling Korean inquiries and investigations, but their next steps can be crucial to risks to their business.
• Our cross-border team explores strategies to help companies mitigate their risks and stand up to prosecutorial overreach.

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• 2023 has continued a trend of increasingly energetic shareholder activism in Korea.
• The most recent annual general meeting season has shed light on the paths activist investors can take to increase their chances of success.
• Our team explores the main takeaways and lessons learned from the season.

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• Recent developments in the Korean legal landscape have been in activist investors’ favor, opening new opportunities to assert their rights and interests in Korean companies.
• Still, the intricacies of the Korean market and the dominance of chaebols mean investors should still tread carefully.
• Creative strategies that navigate these complexities can bring investors the greatest chances of success.

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• More Chinese companies are entering the Korean market, running head-on into family-owned conglomerates known as chaebols.
• In a dispute, the overwhelming dominance of chaebols and the intricacies of the Korea legal market make it hard for Chinese companies to find a way out.
• However, by combining creative legal and PR strategies, Chinese companies can put pressure on their competitors and protect their business interests.

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• Korean and U.S. antitrust enforcers are working ever closer together in investigating potential anticompetitive behavior.
• Korean companies are at risk – even conduct based entirely in Korea could be scrutinized.
• We look at the enforcement hotspots and how Korean companies can deploy an effective multijurisdictional defensive strategy.

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• 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.

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• 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.

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