Claim Monetization & Dilution

• As Western sanctions limit access to traditional dispute resolution forums for parties from Russia and other sanctioned jurisdictions, entities are increasingly turning to Hong Kong for cross-border arbitration.
• With its neutral legal environment, absence of local sanctions, and global enforceability of awards under the New York Convention, Hong Kong offers a strategic and practical alternative—particularly for sensitive, high-stakes disputes and those involving offshore asset structures.

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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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• 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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