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Full-Text Articles in Law
The Market Reaction To Legal Shocks And Their Antidotes: Lessons From The Sovereign Debt Market, Michael Bradley, James D. Cox, Mitu Gulati
The Market Reaction To Legal Shocks And Their Antidotes: Lessons From The Sovereign Debt Market, Michael Bradley, James D. Cox, Mitu Gulati
Faculty Scholarship
In October 2000 a hedge fund holding an unpaid debt claim won an enormous victory against the debtor, the Republic of Peru, through an opportunistic interpretation of the common pari passu clause by a Brussels court. This development was met by charges from policy makers and practitioners that the court's decision (its novel interpretation of the pari passu clause) would lead to a dramatic increase in the risks of holdout litigation faced by sovereign debtors. Over the ensuing years, multiple reform solutions were proposed including the revision of certain contractual terms, the filing of amicus briefs in a key case, …
Facing The Debt Challenge Of Countries That Are Too Big To Fail, Steven L. Schwarcz
Facing The Debt Challenge Of Countries That Are Too Big To Fail, Steven L. Schwarcz
Faculty Scholarship
The recent financial woes of Greece and other nations are reinvigorating the debate over whether to bail out defaulting countries or, instead, restructure their debt. Bailouts are expensive, in the case of Greece costing potentially hundreds of billions of euros. But a bailout was virtually inevitable because a default on Greek debt was believed to have the potential to bring down the world financial system. This is a growing problem: as finance becomes more intertwined, the potential for a countrys debt default to trigger a larger systemic collapse becomes even more tightly linked. This reveals a phenomenon viewed until recently …
How To Restructure Greek Debt, Mitu Gulati, Lee C. Buchheit
How To Restructure Greek Debt, Mitu Gulati, Lee C. Buchheit
Faculty Scholarship
Plan A for addressing the Greek debt crisis has taken the form of a €110 billion financial support package for Greece announced by the European Union and the International Monetary Fund on May 2, 2010. A significant part of that €110 billion, if and when it is disbursed, will be used to repay maturing Greek debt obligations, in full and on time. The success of Plan A is not inevitable; among other things, it will require the Greeks to accept - and to stick to - a harsh fiscal adjustment program for several years. If Plan A does not prosper, …