Venezuela’s Restructuring: A Path Forward

17 Pages Posted: 30 Apr 2019

See all articles by Richard Cooper

Richard Cooper

Cleary Gottlieb Steen & Hamilton LLP - New York Office

Mark Walker

Guggenheim Securities

Date Written: March 28, 2019


Interim President Juan Guaidó and the National Assembly have begun the process of preparing Venezuela for the transition from a failed state to a functioning state. Among the most urgent tasks facing a new Venezuelan government will be, of course, measures to address the humanitarian crisis and securing the needed funding for these efforts without delay. A second order of concern, but one that must be addressed early on, is the treatment of Venezuela’s more than $175 billion of external financial obligations, virtually all of which are in default. Building on the framework that the authors developed in 2017, this article sets forth a roadmap for a realistic and comprehensive debt restructuring process for both Petróleos de Venezuela, S.A. (“PDVSA”) and the Republic. The framework the authors sets forth has as its objectives to address all significant classes of external debt of PDVSA and the Republic; to establish a process for Venezuela and its creditors to reach decisions by negotiation and consensus; to eliminate (where possible) and to limit (where it is not) the threat posed by holdout creditors; to recapitalize PDVSA on a stand-alone basis so it can position itself for new investment and renewed access to international markets; to provide tools to recover the vast sums stolen from the State through fraudulent and criminal acts and to terminate executory contracts that contain disadvantageous terms entered into during the Maduro regime; and to reorganize the public finances of Venezuela so that its external debt (including any newly issued contingent obligations) is sustainable. Recognizing the different characteristics and challenges that each of PDVSA and the Republic face, the authors offer up a path forward that seeks to utilize both traditional and non-traditional sovereign restructuring techniques and apply them in a manner so as to maximize the prospects for a successful restructuring.

Keywords: Venezuela, Debt Restructuring, Bankruptcy, Insolvency, Debt Crisis, Sovereign Debt, Sovereign Debt Restructuring, Restructuring, PDVSA

Suggested Citation

Cooper, Richard and Walker, Mark, Venezuela’s Restructuring: A Path Forward (March 28, 2019). Available at SSRN: or

Richard Cooper (Contact Author)

Cleary Gottlieb Steen & Hamilton LLP - New York Office ( email )

One Liberty Plaza
New York, NY 10006
United States

Mark Walker

Guggenheim Securities ( email )

330 Madison Avenue
New York, NY 10017
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Abstract Views
PlumX Metrics