Clauses & Controversies Ep 2 ft. Tracy Alloway, Lee Buchheit, Alex Xiao
Aug 17, 2020
Tracy Alloway and Lee Buchheit discuss the possible resuscitation of claims against China for non-payment of Imperial Chinese bonds, the legal merit of unpaid debts as bargaining chips, the value and risks of these bonds as investments, the viability of a dollar-issued bond with a first priority claim, challenges of unauthorized debt instruments and counterclaims, and the moral dimension of debt and China's potential obligations.
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Russia's Bond Settlement
- In the mid-1990s, Russia paid a lump sum to France to settle claims on Tsarist-era bonds.
- This was a condition for France's approval of Russia issuing new Eurobonds.
Inconsistent US Stance
- The US government's stance on Imperial Chinese bonds appears inconsistent.
- The SEC has prosecuted individuals for promoting them as investments, yet their potential value hinges on US government action.
Legal Hurdles and Leverage
- Claims on Imperial Chinese bonds face legal hurdles like the statute of limitations.
- However, they might still be used as leverage in a set-off against debts China owes the US.