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Towards a Statutory Approach to Sovereign Debt Restructuring

Lessons from Corporate Bankruptcy Practice Around the World

Patrick Bolton

Paper  113kb pdf

This paper provides an overview of key elements of corporate bankruptcy codes and practice around the world that are relevant to the debate on sovereign debt restructuring. It highlights that there are four components common to most bankruptcy reorganization institutions: a stay on debt collection efforts to prevent a costly run for the assets, broad enforcement of absolute priority, majority voting among creditors on the proposed reorganization plan, and new higher priority financing to keep the firm going while its liabilities are restructured. The paper goes on to argue that these components ought to be present in some form in any sovereign debt restructuring procedure even if important differences exist between corporations and sovereign states.

About the Author

Patrick Bolton
Barbara and David Zalaznick Professor of Business
Columbia University Business School

Publication Information

Type Network Paper
Program Debt Restructuring and Sovereign Bankruptcy
Posted 07/01/03
Download 113kb pdf
# Pages 31