Clauses & Controversies

Mitu, an expert in legal rules and cases, and Mark, a fellow legal enthusiast, dive into the whimsical world of champerty, a quirky legal doctrine. They explore a recent case involving PDVSA bonds, delving into the ethical implications of litigation finance and the challenges bondholders face. With humor, they analyze the formation of a secretive Panamanian corporation and the absurdities of sovereign debt. Their lively banter exposes the complexities of legal maneuvers and questions the relevance of champerty in today’s legal landscape.

Zohra Ahmed, an academic at Boston University Law School, dives deep into Pakistan’s recurring battle with IMF bailouts, revealing how these are linked to U.S. military interests. She theorizes that the true cost of these bailouts is a detrimental cycle of dependency and a lack of genuine economic reform. The conversation touches on Pakistan's political dysfunction, the intricate dance of international consent, and the pressing need for a rethink of IMF practices in a changing geopolitical landscape.

A Better Way to Freeze (and Seize?) Russian Assets? Ever since Russia invaded Ukraine in 2022, there has been talk of what international law doctrines might be utilized to induce Russia to back off. One of those doctrines that has been whispered about is now, thanks to a wonderful new article by our guest, international law guru and Yale Law professor, Oona Hathaway, is that of Countermeasures. Oona and her co authors not only explain the law of countermeasures, but argue that these legal principles naturally extend into a doctrine of “collective countermeasures”. We ask Oona about these doctrines and their scope, particularly in the context of Russia and Ukraine. She argues that the doctrine, properly understood and applied, is (and should be) narrow. To quote Spider Man (maybe), “With Great Power Comes Great Responsibility”. Producer: Leanna Doty

Randle DeFalco, a legal expert from Widener University Law School, dives into the intricate history of Cambodia's debts to the US stemming from controversial loans in the 1970s. He explores the moral dilemmas surrounding these debts, especially given the US's role in supporting a dubious government during a tumultuous period. The conversation examines colonialism's lingering effects, Cambodia's struggles for sovereignty amid coups, and the implications of repaying loans tied to violations of international law. This complex narrative raises essential questions about justice and historical grievances.

In this discussion, Joseph Cotterill, a Financial Times expert, delves into Ukraine's ambitious debt restructuring deal amid ongoing conflict, addressing the unrealistic IMF projections and bondholder dynamics. He explains the complexities of including state-owned enterprise debts like Ukrenergo and the urgency behind restoring investor confidence. The conversation also touches on Mozambique's contentious tuna bonds saga, including a recent High Court ruling that awarded significant damages and the ramifications of corruption and legal battles on the country's financial landscape.

Andrew Wilkinson, an expert in sovereign debt restructurings, discusses the risks of liability in creditor complaints, the use of tortious interference with contract in the Zambia debt restructuring, and the importance of fair treatment for all stakeholders in restructuring deals. He shares insights on the complexities of navigating bankruptcy law, managing creditor negotiations, and achieving successful outcomes in financial restructurings.

Featuring Ben Heller, the podcast delves into El Salvador's unique bond issuance with a warrant tied to IMF deal and credit rating. The discussion highlights the complexities of financial warrants, governance-linked bonds, and the debate surrounding bond proceeds for buybacks. It also emphasizes the importance of transparent EM debt contracts for investor clarity.

The Latest in the Argentine GDP Warrant Saga: Drafting Goof or Sneaky Drafting? There are so many intriguing aspects of the latest installment of the Argentine GDP Warrant Saga. This time, from Judge Preska in the SDNY, Argentina scores a big, and for us, totally unexpected victory. Argentina’s lawyers, at a very late stage, discovered a magic bullet that no one seems to have realized was there. Mark doesn’t like to use the term “contractual landmine”, but he does here. Mitu applauds. Producer: Leanna Doty

Jerome Sgard discusses the 1980s debt crisis and the Brady Plan, unraveling the hidden history of sovereign debt crises. Topics include the complexities of restructuring, sovereign debt litigation dynamics, and the US government's position. Explore the non-contractual nature of standby agreements, secret buybacks, and strategies for market re-entry.

Financial experts Ingrid Brunk and Paul Stephan discuss utilizing frozen Russian assets to aid Ukraine, exploring legal complexities and political implications. They delve into asset confiscation proposals, navigating reparations, and addressing global financial risks amidst de-dollarization trends.