Coherent Identifier About this item: 20.500.12592/6f9tj3


14 December 2021


While creditors can choose to negotiate, there is nothing compelling them to cooperate in good faith during debt restructurings.15 As a result of this loophole in the law, a favorite vulture fund tactic is to “hold out” during debt negotiations, even when they own a small percentage of a country’s debt and the rest of the creditors are willing to negotiate in good faith. [...] In turn, countries in economic distress are at the whim of predatory creditors.18 The Vulture Playbook in Practice: • In the case of Peru, out of approximately 180 creditors, only Elliott Capital and Pravin Banker refused to participate in a negotiated restructuring agreement.19 • During negotiations with Argentina, Elliott Capital and other hedge funds refused the proposed restructuring deal—even. [...] The Republic of Congo eventually settled with Kensington, “for an undisclosed amount,” in 2007.44 • In the neighboring Democratic Republic of Congo (also called Congo-Kinshasa), the New York-based FG Capital Management took the DRC to court and attempted to seize the country’s assets in the Bahamas, Europe, South Africa, the US, and Hong Kong. [...] The Board has enabled hedge funds to exert undue control over the process and has largely turned a blind eye to allegations of wrongdoing that could get in the way of hedge fund profits.49 Only 5% of debt restructurings involved lawsuits in the 1980’s. [...] • Tried to seize two contracts between Argentina and SpaceX for satellite launches.53 • Convinced the government of Ghana to seize an Argentinian naval training warship stationed off the coast of Ghana, despite being worth a fraction of what the hedge fund claimed it was owed.54 The International Tribunal of the Law of the Sea eventually invalidated Singer’s court order.55 • The government of Arge.



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