Onshore Litigation Options for Offshore Funds
Since the advent of the credit crisis, offshore funds have taken ever greater advantage of the benefits of US litigation. These include the relaxed pleading standards in comparison to Commonwealth jurisdictions, the benefits of the liberal discovery system in the US, reduced legal fees as reflected both in the lower nominal rates when compared to QCs, as well as the lower preparation costs compared to UK style litigation, and the enhanced leverage for settlements stemming from the "American Rule" that each party bears their own costs regardless of outcome.
Specifically, onshore litigation has become the favored tool of many offshore liquidators seeking to bring claims against former fund managers, litigate fraud and negligence claims against third-party professionals, seek clawbacks from LP investors, or simply use the US as a favorable litigation forum for international claims when funds have passed through the US financial system.
In this session, the following topics will be covered:
- Jurisdiction and choice of law issues for offshore funds litigating in the US;
- Claims available to offshore funds for use against third-parties;
- Avoidance of the In Pari Delicto doctrine;
- When to seek Chapter 15 status;
- The costs and benefits of bankruptcy protection;
- Section 1782 Petitions for discovery; and
- Enforcement and execution of judgments in the US.
Partner, Nixon Peabody (New York)
Partner, Walkers (Cayman Islands)