Holdout Creditor Litigation: An Assessment of Legislative Initiatives to Counter Aggressive Sovereign Debt Creditor Litigators

Abstract

This research paper concerns legislation enacted in Belgium, the UK and within the Euro zone countries. At the heart of my research is the following question: do these legislative initiatives succeed in 1) discouraging minority creditors from refusing to take part in restructuring processes, including debt relief initiatives, and 2) limiting creditor lawsuits against defaulting sovereign debtors? The paper will also look at recent legal developments that have arisen since the Argentine economic crisis in 2001, and examine whether these developments are likely to affect the above-mentioned legislation. In order to answer the research question, the paper will examine sovereign debt contracts (including sovereign bonds) in the international credit market and how these are enforced within different jurisdictions. It will further examine how different countries seek to limit the possibility of enforcing certain contract rights within their jurisdiction through national legislation.