Stop Vulture Fund Lawsuits

A Handbook

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Vulture funds, funds that buy up the debt of sovereign countries at a discount in the hope of making significant profits, have caused considerable problems to a number of highly indebted countries. The Commonwealth Secretariat’s Legal Debt Clinic advises governments on best practice in negotiating loan agreements, and how to respond to the activities of vulture funds. This handbook distils the key lessons from that work, for the benefit of all government officials who may have to deal with these issues.




In an ideal world resolving the huge indebtedness of the HIPC countries by forgiving their outstanding debt would be the best option for avoiding litigation. But in the real world, especially with vulture fund creditors buying up sovereign distressed debt, recourse to lawsuits is the only method through which creditors can recover their money. This chapter will trace the historical evolution of vulture fund lawsuits and the legal principles on which they are based.


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