Claim Monetization & Dilution

• Economic ties between Latin American and Chinese businesses continue to deepen. There are unique risks involved if a dispute arises with the Chinese company.
• Even if an organization or investor succeeds in an arbitration or litigation against a Chinese company, the Chinese legal system’s intricacies may create barriers to getting the company to pay.
• Latin American companies and investors should consider cross-border strategies to increase their leverage.

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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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• On October 22, England’s Court of Appeal dismissed the Kingdom of Spain’s challenge to enforce a US $109 million arbitral award in favor of Kobre & Kim’s client.
• Despite Spain’s arguments asserting state immunity, Lord Justice Phillips interpreted the 1965 ICSID Convention.

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• A Kobre & Kim client received a recent ruling by the New York Supreme Court that eases global bondholders’ ability to monetize claims.
• Justice Joel Cohen found Zhu Xinli, the sole director of Huiyuan Juice subsidiary Huiyuan Beijing, personally liable for more than US $114 million. 
• The decision means that bondholders increasingly have monetization options against recalcitrant debtors, including the ability to collect at par from well-heeled decision-makers when the primary obligors may be effectively insolvent, judgment-proof, or even already in bankruptcy proceedings.

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• As geopolitical tensions pressure sovereign debt, more investors are taking their disputes against sovereign states and entities to arbitration and judicial forums. There is a world of difference between demanding payment of a defaulted debt, judgment, or award from a sovereign and seeing the sovereign pay up.
• Meanwhile, Chinese private investors have become more prominent in sovereign-related investments through acquisitions, joint ventures, and infrastructure projects in Europe, Africa and Latin America.
• Investors and other claimants should not be afraid to stand up to sovereign debtors with aggressive non-traditional strategies.

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• As high energy prices and a wider global weakening economy threaten the shipping and maritime industries, many Cyprus-based companies face serious financial distress.
• This poses a risk for creditors or those with deep financial ties to those companies as they increasingly default on their bonds and bilateral loans.
• Creditors of Cypriot companies in those situations should focus on a multijurisdictional approach to achieve recovery.

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• Delaware’s strong asset protection laws have long made the U.S. state a destination of choice for individuals and entities worldwide looking to set up a trust.
• International creditors looking to recover assets may feel that pursuing a debtor in Delaware is insurmountable.
• However, it is indeed possible to crack Delaware’s notoriously tough trusts by adopting an aggressive multijurisdictional strategy.

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