Amiad Kushner Addresses “Opportunities For U.S.-China Legal Collaboration” Before Audience Of Chinese Lawyers At Columbia Law School
Apr 12, 2019
By Yang Shi
On March 23rd, our partner and head of litigation Amiad Kushner was invited by iCourt to speak to Chinese lawyers at Columbia University Law School. In his presentation, Amiad discussed emerging opportunities for U.S.-China legal collaboration involving litigation, transactional, regulatory, and high-net-worth practice areas.
Opportunities in Litigation
Amiad explained that China-related litigation is likely to increase in several areas, including M&A and investment disputes, distressed assets, and bankruptcy litigation. In addition to the fact that a certain percentage of Chinese investments in the US ends in failure (and, in many cases, litigation), many “successful” Chinese acquisitions in the US from recent years are now become distressed. Amiad noted that in cases of fraud or misconduct by US counterparties, litigation may offer opportunities for Chinese investors to recover losses.
Amiad also explained that the significant increase in bankruptcy filings in China may lead to more Chapter 15 filings by Chinese debtors in the US. Chapter 15 of the US Bankruptcy Code offers significant protections and opportunities for non-US debtors, including the ability to pursue litigation claims to recover assets in the US.
Amiad also discussed opportunities related to litigation funding. Litigation funding is just beginning in China and is likely to become more popular, because Chinese clients are very focused on controlling legal fees. Amiad noted that litigation funders have amassed significant amounts of capital to fund US litigation, but that Chinese clients have generally not taken advantage of litigation funding options. US and Chinese lawyers can work together to identify appropriate opportunities for funding of US litigation matters and educate Chinese clients on the litigation funding process.
Opportunities in Transactional Work
Amiad noted that despite the decline of Chinese foreign direct investment into the US, Chinese venture capital (“VC”) investment is increasing, partly because many VC investments are not required to be reviewed by CFIUS. In addition, there is a significant increase in the number and quality of Chinese companies going public in the US. Amiad described a sea change in the US perception of Chinese companies, as US investors increasingly see China as a center of innovation.
In this respect, Amiad noted that some of the most valuable IP in the world is being created by Chinese companies, and that Chinese and US lawyers can cooperate in protecting IP developed by China-based companies in the US. Amiad discussed drone maker DJI as an example of a Chinese company that owns valuable IP. Shenzhen-based DJI is one of the leading drone makers in the world, but most of its sales are outside China including significant US sales.
Opportunities in Regulatory Matters
Amiad discussed the Trump Administration’s focus on China, and the fact that many US government agencies are increasing scrutiny of Chinese companies. Exports to China or imports from China are subject to heightened scrutiny today. The CFIUS process has become much more difficult for Chinese investors in the US.
Because there is so much more US regulatory attention focused on China, there are more opportunities for Chinese and US lawyers to work together in assisting Chinese clients in navigating these challenges.
Opportunities in Representing High-net-worth Clients
Amiad noted that many Chinese high net worth (“HNW”) individuals who amassed wealth in China are living outside China or have significant assets outside China. HNW clients have many needs, including preserving wealth, minimizing tax burdens, and transferring wealth efficiently to future generations. Highly complex legal issues are involved in achieving these goals. For example, wealth may need to be placed into complex trusts, which requires specialized trust and estates expertise.
There are also complex issues related to marriage and divorce involving HNW clients. For example, if a HNW Chinese national lives in China and New York, and wants to get married, an analysis should be conducted of the most favorable jurisdiction to get married in. The analysis might address, for example, whether the jurisdiction is likely to enforce pre-nuptial agreements, and how the division of assets in divorce is handled. Identifying and addressing these issues presents a significant opportunity for Chinese lawyers to work together with US lawyers.< Back