Einblicke

Judgment and award creditors often fret that US courts are unfriendly and the tools to unravel complicated asset protection schemes are inadequate. In an encouraging ruling refuting this sentiment, the Southern District of New York recently reiterated its endorsement for reverse veil piercing as a remedy for unsatisfied judgment creditors seeking to hold corporate entities responsible for judgment liabilities of shareholders and directors.

In challenging economic conditions, construction businesses face intense pressure to maximise revenue and optimise cashflow. Legal claims are valuable assets in this context and should be prioritised. However, the upfront cost of advancing construction claims often prevents companies from doing so.

Companies with affirmative claims increasingly are using litigation finance to pursue meritorious cases, reduce legal expenses, and manage financial risk. But not all funding requests are approved, and an application can be handicapped by an overly optimistic opinion about the potential recovery in a case or a casually prepared litigation budget.

One of the significant risks that creditors weigh when deciding whether to lend money is bankruptcy risk: can the borrower use the bankruptcy laws to discharge the debt or compel the creditor to accept less than it bargained for? In the sovereign debt market, it has been an article of faith for creditors that states cannot file for bankruptcy and obtain such relief. But a recent ruling from the U.S. District Court for the Southern District of New York—Hamilton Reserve Bank v. Sri Lanka—may cause creditors to question that faith, with uncertain consequences for sovereign creditors and borrowers alike.

The Singapore Court of Appeal has upheld a decision by the Singapore High Court that a costs undertaking given by Omni Bridgeway was an adequate form of security for costs. The High Court decision was the first time a Singapore court has permitted a litigation funder to provide a costs undertaking as security. The Court of Appeal’s endorsement of the decision is another example of the Singapore judiciary’s continuing acceptance of third party dispute finance for court proceedings.