Insights

• International creditors are facing a shrinking pool of available capital for repayment on their claims in Brazil and Latin America.
• As companies struggle to navigate ever-increasing amounts of debt, there are strategies US dollar noteholders can take to improve their position and fast-track a swift recovery. 

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• Creditors pursuing claims against sovereign states may find new opportunities.
• A recent U.S. court decision opens the door to recoveries once thought out of reach, reinforcing the value of well-planned, globally coordinated strategies to maximize returns and speed up enforcement.

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• The U.S. Department of Justice (DOJ)’s new Data Security Program imposes strict limits on U.S.-based companies transferring sensitive personal or government-related data to entities linked to “countries of concern”.
• With steep penalties and reputational fallout at stake, China-linked businesses should proactively map data flows, prepare for enforcement risks, and manage public perception early.

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• Family offices are increasingly turning to the United Arab Emirates (UAE) for sophisticated wealth structuring, taking advantage of the Dubai International Financial Centre (DIFC) and the Abu Dhabi Global Market (ADGM).
• Central to this shift is the attractiveness of UAE foundations, standalone legal entities, similar in function to common law trusts.
• When properly structured, they support cross-border resilience and align with broader wealth planning strategies.

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• As Chinese investment in Latin America grows, so do legal risks for Latin American companies.
• Cross-border strategies such as using Hong Kong arbitration, offshore insolvency tools, and targeting decision-makers can help improve outcomes in disputes with Chinese entities.

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• The U.S. Government’s latest guidance marks a renewed focus on Foreign Corrupt Practices Act (FCPA) enforcement following a temporary pause.
• Companies operating across borders should proactively assess their exposure; strengthening compliance, identifying vulnerabilities, and managing reputational risks are key to navigating this evolving landscape.

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• Chinese investors are playing an increasingly significant role in sovereign-related investments worldwide, especially in Europe, Africa, and Latin America.
• This raises enforcement challenges linked to sovereign immunity.
• Investors and claimants facing sovereign debtors should adopt bold, non-traditional strategies beyond litigation to effectively protect their interests and navigate these complexities.

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• As economic ties between Brazil and Korea deepen, Korean companies may face challenges enforcing judgments or arbitration awards against Brazilian counterparts.
• Given the complexities of Brazil’s legal system, Korean creditors should consider a multijurisdictional strategy—leveraging offshore jurisdictions and U.S. legal mechanisms—to improve enforcement outcomes and navigate the process more effectively.

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• Delaware’s Domestic Asset Protection Trusts (DAPTs) have earned the state a reputation as a premier jurisdiction for shielding assets from creditors.
• These trusts attract individuals and entities around the world seeking strong legal protections.
• While international creditors may view asset recovery efforts in Delaware as daunting, it is possible to overcome these protections with a strategic, multijurisdictional approach.

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• Chinese companies and individuals with ties to the U.S. face increasing regulatory and enforcement risks.
• The U.S. Department of Justice (DOJ) and the U.S. Securities and Exchange Commission (SEC) are expected to intensify their investigations and enforcement efforts
• Those potentially affected should act early and decisively to mitigate exposure, navigate emerging challenges, and safeguard commercial opportunities.

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• As private debt continues to grow rapidly as a global asset class, investors and asset managers must remain vigilant to the increasing risks that accompany this expansion.
• With deal complexity on the rise, these risks are particularly acute in cross-border, high-value credit arrangements.
• A coordinated multi-jurisdictional strategy enables creditors to secure more substantial leverage in pursuit of favorable recoveries in response to defaults. 

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• The changing business environment has exacerbated financial challenges, eroding asset values, and driven a spike in defaults. Large distressed debt positions cannot always be monetized through consensual restructurings.
• Over the past 24 months, Kobre & Kim has enforced distressed debt, including offshore US dollar bonds, valued at more than US $2 billion in jurisdictions that span Asia, the Middle East, Offshore, North America, and Latin America.
• To successfully monetize credit, it is essential to deploy strategies that leverage a combination of cross-border asset recovery in onshore and offshore jurisdictions, as well as creative out-of-court approaches to facilitate the voluntary resolution of claims.

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• A new Memorandum of Understanding (MoU) between the Dubai Courts and the Abu Dhabi Global Market (ADGM) Courts marks a significant step forward for creditors seeking to enforce claims in the UAE.
• By establishing mutual recognition of judgments and awards, the MoU brings greater clarity to a legal landscape long seen as complex and uncertain.
• In light of this progress, creditors operating in the UAE should consider proactive strategies to enhance their recovery prospects across both offshore and onshore systems.

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• Kobre & Kim has effectively supported judgment debtors navigating the financial, legal, and strategic challenges associated with adverse judgments, arbitration awards, and defaulted bonds and loans.
• By mitigating enforcement risks while minimizing the need for significant financial outlays, the firm reduced the value of claims by more than US $10 billion.
• Withstanding a proactive creditor requires a coordinated, multi-jurisdictional approach leveraging an aggressive set of cross-border tools, as our team described below.

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• The U.S. government's rapidly shifting tariff policies are further straining an already challenged sector, disrupting shipping volumes and adding instability to global supply chains.
• Individuals and businesses tied to international shipping, particularly those based in Greece and Cyprus, may face heightened exposure to these measures
• Stakeholders and their trusted advisors should consider taking proactive, precautionary measures to mitigate potential disruptions and protect their business interests.

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