Pyres, Haircuts, and CACs: Lessons from Greco-Multilateralism for Creditors
Nicholas L. Georgakopoulos
Indiana University - Robert H. McKinney School of Law
May 15, 2012
Indiana University Robert H. McKinney School of Law Research Paper No. 2012-09
The restructuring of Greece’s debt offers a clean case study of the dynamics of sovereign restructuring. This essay discusses the powerlessness of sovereign creditors, Greece’s predicament, and its resolution through (a) a two-step refinancing with bond accumulation and value injection and (b) collective action legislation and equivalent clauses. The experience suggests that a sovereign insolvency regime should grant priority to post-insolvency creditors over pre-insolvency creditors, should allow voting by classes, and should be conditional on the debtor’s continued compliance with reform and supervision.
Number of Pages in PDF File: 25
Keywords: sovereign insolvency, collective action clause, cac, pari passu clause, Greek restructuring, sovereign reschedulingworking papers series
Date posted: April 26, 2012 ; Last revised: May 17, 2012
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