Sovereign DebtSymposium

Sovereign Debt Restructuring – In the Machine Room of Legal Engineering

The authors and editors of the special issue on sovereign debt restructuring are highly grateful to the contributors to this symposium on sovereign debt for their thought-provoking contributions. As I have highlighted in my initial post, this special issue is as much about improving the current practice of sovereign debt restructuring as it is about legal engineering – in this case, about instigating incremental progressive development in a crucial policy …

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Sovereign DebtSymposium

Not only good faith

Staying of enforcement

Staying of enforcement plays a topical role in sovereign debt litigation as enforcing a debt claim may have a negative impact on the dynamics of restructuring processes and the regular functioning of financial markets for sovereign debt. Moreover, in the case of Highly Indebted Poor Countries (HIPCs), it may also affect the resources pledged for social expenditure. As a response to this problem, in January 2012 the United Nations Conference …

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Sovereign DebtSymposium

Inter-Creditor Equity in Corporate and Sovereign Debt Restructuring

Broadly defined, inter-creditor equity represents a normative evaluation of the treatment a debtor accords to a certain creditor (or group of creditors) vis a vis the treatment that the debtor’s other creditors have received.  In the context of domestic insolvency laws, this evaluation is made possible (and enforceable) through detailed priority structures designed to favor certain creditor groups over other.  When the debtor is sovereign, however, creditor priorities are only …

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Sovereign DebtSymposium

Sovereign debt and international law

Or on the intricacies of theory and practice

Events of historic proportions often feel anti-climactic. In March 2012, Greece, a developed capitalist state and a member of the Eurozone, engaged in the biggest debt restructuring venture to date, covering 200 billion euros (260 billion USD) and reducing the private debt burden by over 50%. The exchange was not purely voluntary, since the majority of bonds were subjected to Greek law and an amendment made the offer compulsory for …

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Sovereign DebtSymposium

Setting the Scope of and the Limits to the Incremental Approach to Sovereign Debt Restructurings

Anyone interested in legal issues surrounding sovereign debt should pay careful attention to the last special edition of the Yale Journal of International Law in which a framework is set forth to ensure the progressive development of orderly sovereign debt restructurings (SDRs). This prospective agenda relies upon a principles-based approach to SDR that revolves around various soft-law instruments, such as UNCTAD Principles on Promoting Responsible Sovereign Lending and Borrowing, as …

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Sovereign DebtSymposium

Constant Dripping Wears Away the Stone… Including Sovereign Debt

On Incrementalism as a Regulatory Approach for the New Sovereigntist Age

The sovereign debt crises in the Eurozone, in Argentina, or in Ukraine have highlighted that the current international legal regime on sovereign debt is ill equipped to resolve the bankruptcy of nation states. Yet, when it comes to possible reforms, policy-makers and experts have been divided over two opposing solutions: A contractual one, which favors contractual clauses enabling a majority of the creditors of a sovereign bond to restructure it, …

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