Toward a Statutory Approach to Sovereign Debt Restructuring: Lessons from Corporate Bankruptcy Practice around the World

By Patrick Bolton. Social Science Research Network, 2003

71 citations recorded by the source corpus.

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 that there are 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 goes on to argue that these components ought to be present in some form in any sovereign debt restructuring procedure even if important differences exist between corporations and sovereign states.

Subfields: Finance, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/0d67c9d903aa4ab47394878ec923446e4aa39544

Citations in the corpus

• The case for GDP‐indexed bonds (2004, unknown): “Bolton and Skeel (2003) describe the potential benefits of debt seniority for the sovereign debt market, and argue that a sovereign bankruptcy mechanism would make it much easier for sovereigns to use senior debt.”