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

Patrick Bolton

No 2003/013, IMF Working Papers from International Monetary Fund

Abstract: 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.

Keywords: WP; debtor country; floating charge; absolute priority; bankruptcy court; debt crisis; restructuring procedure; Bankruptcy; sovereign dept; unsecured debt; going-concern value; liquidated firm; Sovereign debt restructuring; Debt restructuring; Corporate insolvency; Bonds; Europe (search for similar items in EconPapers)
Pages: 37
Date: 2003-01-01
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Citations: View citations in EconPapers (8)

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