Claim Monetization & Dilution

• More investors are taking their disputes against sovereign states and entities to arbitration and judicial forums.
• However, demanding payment of a defaulted debt, judgment or award does not always lead to the sovereign paying up.
• We explore aggressive non-traditional strategies investors should deploy to ensure a sovereign debtor agrees to a settlement.

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• Recent challenging economic conditions in China are putting many PRC companies in distress.
• This puts offshore joint venture partners and private credit lenders at risk, potentially having to attempt a difficult recovery by taking over PRC projects, companies or assets.
• A new Chinese company law may give investors an upper hand by strengthening their information rights, which when combined with a multijurisdictional strategy allow a more effective takeover.

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• Deals and partnerships between Latin American and Chinese companies are growing as economic ties between the two regions deepen.
• However, unique risks are involved if a dispute arises with the Chinese company – the Chinese legal system could create barriers to payment, even with an award or judgment in hand.
• Latin American companies and investors should consider cross-border strategies to increase their leverage.

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• The ability of bondholders to sue bond issuers to enforce their rights without going through the cumbersome process of instructing a bond trustee has long been in question.
• However, an important ruling in New York court, obtained by Kobre & Kim on behalf of a group of international bondholders, took the first step in establishing standing.
• With New York law governing a vast amount of emerging market company debt, this could allow global bondholders to dramatically speed up creditor response times.

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• U.S. litigators will be familiar with the powers of U.S. courts to gather discovery, including through letters rogatory and Section 1782 applications.
• Less well known are powerful non-U.S. discovery tools that can provide the ever-growing need for information from multiple jurisdictions.
• One such example, the Norwich Pharmacal order, can offer litigants access to third-party information in key English common law jurisdictions around the world.

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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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• 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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