Insights

• New rules proposed by the U.S. Financial Crimes Enforcement Network (FinCEN) would extend U.S. anti-money laundering program requirements to investment advisors.
• This could become the latest move by U.S. authorities to scrutinize the assets and transactions of ultra-high-net-worth individuals, including those outside the U.S.
• At-risk individuals and their advisors should take proactive steps to protect their legitimate interests.

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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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• The United States and its allies continue to use sanctions to attack adversarial governments and their perceived allies, putting companies and individuals with tenuous or merely alleged ties at risk.
• Recent sanctions have targeted Russia, but PRC companies were designated in the February 2024 round, signaling increasing risk to PRC individuals and business if China-U.S. relations deteriorate.
• At-risk individuals and business should take proactive steps to prepare.

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• For international investors and companies, winning an arbitration award against a sovereign state marks just the beginning of a lengthy, globe-spanning enforcement campaign.
• To make a greater impact on the enforcement process, award holders should not be afraid to use more creative approaches.
• A recent Kobre & Kim victory demonstrates how this approach can put legitimate pressure on sovereign debtors and bring them to the negotiating table.

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• 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.

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• Sovereign defaults are increasing after recent years of post-pandemic spending, geopolitical risk and climate change.
• This has created opportunities for distressed investors experienced in enforcing against sovereigns.
• Investors can improve the value of their claims by deploying strategies targeting unconventional vulnerabilities around the world.

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• Unfavorable economic conditions in China are putting many offshore companies in distress.
• In a worst-case scenario, joint venture partners and private credit lenders may have to attempt to take over onshore projects, companies and assets.
• A new Chinese company law coming into effect on July 2024 could smoot this path to recover – including by making it easier to replace legal representatives.

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• Several features make Delaware’s trust law attractive for debtors to hold assets in the jurisdiction.
• This also means creditors often struggle when attempting to access the trusts to recover assets.
• By deploying aggressive, multijurisdictional strategies, creditors may be able to crack even Delaware’s notoriously tough trusts.

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• Free ports enable ultra-high-net-worth individuals to store, trade and transport assets, including artwork, with benefits of security, favorable tax and customs regulations and, often, privacy.
• However, free ports cannot mitigate threats to assets when authorities make allegations of misconduct and issue freezing or seizure orders.
• With a free port in Dubai under construction, UHNWIs and their advisors should contemplate proactive steps to protect their global portfolios.

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• International creditors are seeing more opportunities in the United Arab Emirates and wider Middle East as courts continue to signal openness to recognizing and enforcing overseas judgments.
• This includes overcoming a fraudulent conveyance, as a UAE court recently decided in what may be an unprecedented judgment in favor of a judgment holder represented by Kobre & Kim.
• The judgment demonstrates that there are a rapidly growing number of creditor tools available in the region to combat recalcitrant debtors.

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