IMF Working Papers

Toward a Statutory Approach to Sovereign Debt Restructuring: Lessons From Corporate Bankruptcy Practice Around the World

By Patrick Bolton

January 1, 2003

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Patrick Bolton. Toward a Statutory Approach to Sovereign Debt Restructuring: Lessons From Corporate Bankruptcy Practice Around the World, (USA: International Monetary Fund, 2003) accessed November 24, 2024
Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

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 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 argues that these components ought to be present in any sovereign debt restructuring procedure.

Subject: Asset and liability management, Bonds, Corporate insolvency, Debt restructuring, Financial crises, Financial institutions, Sovereign debt restructuring

Keywords: Absolute priority, Bankruptcy, Bankruptcy court, Bonds, Corporate insolvency, Debt crisis, Debt restructuring, Debtor country, Europe, Floating charge, Going-concern value, Liquidated firm, Restructuring procedure, Sovereign debt restructuring, Sovereign dept, Unsecured debt, WP

Publication Details

  • Pages:

    37

  • Volume:

    ---

  • DOI:

    ---

  • Issue:

    ---

  • Series:

    Working Paper No. 2003/013

  • Stock No:

    WPIEA0132003

  • ISBN:

    9781451843026

  • ISSN:

    1018-5941

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