
Clauses & Controversies
Ep 129 ft. Mitu & Mark
Mar 11, 2024
Exploring the implications of a legal decision on financial bonds, focusing on the validity of collateral under Venezuelan and New York laws. Analysis of the New York Court of Appeals ruling and criticism from market reactions. Discussion on the prevalence of local law provisions in sovereign bonds and the importance of clear authorization processes for corporate and state-owned bonds.
23:28
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Quick takeaways
- New York Court rules on bond validity based on Venezuelan law, sparking investor concerns.
- Application of foreign law in determining bond validity is a standard practice in international finance.
Deep dives
New York Court of Appeals Decision on Collateralized Bonds
The podcast discusses a significant decision by the New York Court of Appeals regarding collateralized bonds known as the Pedovessa 2020s. The court clarified that the validity of the collateral pledge linked to these bonds is determined by Venezuelan law, not New York law. However, the consequences for investors in case the collateral pledge is deemed invalid fall under New York law. This distinction raises concerns among investors and legal experts, sparking debates on the implications of this decision.
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