Insights

• 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.

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• 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.

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• South Korea and U.S. antitrust regulators are increasing collaboration in cross-border matters, with the Biden administration gearing up enforcement.
• Potential targets include South Korean companies that conduct business with the U.S. Forces Korea (USFK).
• Our team explains why an aggressive, multi-jurisdictional defense is necessary to mitigate the risks

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• The Dubai International Financial Centre (DIFC), a gateway to enforcing judgments in the Middle East, has just seen significant barriers to enforcement removed.
• Creditors now have a much smoother path to collect on what they are owed both in onshore Dubai and across the region.
• Our global Claim Monetization & Dilution team unpacks how creditors can save significant time and money.

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• The U.S. Commodity Futures Trading Commission (CFTC) has quietly increased scrutiny of digital currency markets, focusing on spoofing.
• Successful traders normally do not run from risk in their trading activities, yet they often do exactly that in the face of unfamiliar regulatory risks, leading to worse outcomes.
• Targets of regulatory enforcement should therefore consider a range of aggressive measures before responding to inquiries from enforcement authorities.

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• Minority shareholders of South Korean industrial conglomerates, or “chaebols,” have had few ways to protect their interests against controlling shareholders.
• However, with the passage of new amendments to the Korea Commercial Code (KCC), minority shareholders have gained new tools to even the playing field.
• Our Claim Monetization and Dilution team looks at the key changes and implications that minority shareholders and activist investors should know about.

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• 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.

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• 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.

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• South Korea is an attractive destination for investors in private equity and venture capital, but the country’s changing disclosure rules could risk a drawn-out government investigation.
• Recent changes, designed to relax disclosure for most investors, adds complexity that could be used by the government against international investors to protect domestic companies.
• International parties investing in a Korean company can and should anticipate this risk in a way that maintains both independence and confidentiality.

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• For parties embroiled in contentious joint-venture disputes, it is advantageous but challenging to find new ways to exert pressure on a counterparty.
• If the counterparty is registered in Delaware, however, a pursuing a dissolution proceeding there can prove to be a decisive way to gain leverage.
• As our Claim Monetization & Dilution team explains, this tactic saved a client in a recent case valuable time and money in reaching a favorable settlement.

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• Special Purpose Acquisition Companies (“SPACs”) can provide sponsors—often high-net-worth individuals—with large returns.
• However, SPACs are not without their risks—there are growing signals the market may be cooling, which could lead to litigation and government enforcement.
• SPAC sponsors and advisors should prepare early in order to reduce their potential exposure.

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• Companies often believe that the only remedy for anti-competitive behavior comes from government intervention.
• However, as a recent U.S. appeals court decision illustrates, private parties can obtain relief themselves, even against “consummated” mergers approved by government regulators.
• This creative strategy is just one of many that companies can deploy by themselves when facing competitive challenges.

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• The U.S. Corporate Transparency Act (CTA), part of the recently-passed National Defense Authorization Act (NDAA), has broken new ground by requiring beneficial owners of U.S. corporate entities to register with U.S. government authorities.
• While the CTA appears to shut out private parties – such as creditors and victims of fraud – from accessing such information, there may be potential creative ways to work around this roadblock, bringing creditors one step closer to a substantial recovery of their assets.
• Nevertheless, creative creditors and their counsel might be able to obtain this information through certain channels to cut off escape routes for debtors and fraudsters, and obtain more complete recoveries.

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• Prevailing case law in BVI and Cayman has historically not allowed injunctions to be granted by the offshore courts unless there is an existing claim against the defendant within the jurisdiction of the Court granting the injunction.
• Fortunately, that position has changed in the Cayman Islands and now in BVI, with claimants, including those from onshore jurisdictions such as Hong Kong and the People’s Republic of China, able to obtain “free-standing” injunctive relief in both offshore jurisdictions.
• With the advent of the new law in BVI, and the continuing willingness of the Cayman Islands’ Courts to make protective orders, victims of fraud are now in a better position than they have ever been to guard against a defendant’s dissipation of its offshore assets whilst they are waiting for a judgment.

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• 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.

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