Stop Vulture Fund Lawsuits

A Handbook

image of Stop Vulture Fund Lawsuits

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.



Responding to Lawsuits

By refusing to participate in the debt restructuring process, vulture fund creditors prefer to opt for court proceedings so as to obtain many times the original amount they paid for the debt. Vulture fund creditors are aggressive litigators, as their only reason for purchasing debts is to make a swift profit. If a sovereign debtor does not want to suffer the effects of a vulture fund lawsuit as described in Chapter 3, Lawsuits, then immediate action is a must.


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