|Statement||Marcus Miller and Lei Zhang.|
|Series||Warwick economic research papers -- no 483|
|Contributions||Zhang, Lei., University of Warwick. Department of Economics.|
BANKRUPTCY PROCEDURES FOR SOVEREIGNS 16The basic idea of the Brady plan was to increase the certainty of servicing the residual claims, including by collateralizing the principal with U.S. zero-coupon bonds, in return for some forgiveness on the . Abstract. This article explores whether a more formal bankruptcy procedure, the "Sovereign Debt Restructuring Mechanism" (SDRM) as proposed by the IMF, or in some modified form, is needed to deal with sovereign debt by: 7. federal-state relations, but the States remain at least partially sovereign. In short, bankruptcy rules and norms should not be transplanted without careful thought Sovereign debt is still quite different from normal debt, provided that the debtor is actually sovereign. II. DEBT AND SOVEREIGNTY. No such procedure exists for sovereign countries. Countries are left to engage with a variety of creditors with different interests and under different jurisdictions, a process that can drag on.
The paper examines the main issues involved in translating domestic bankruptcy procedures to the sovereign context. It considers some of the principles by which domestic bankruptcy procedures operate and the extent to which they apply to international lending. Two recent proposals are considered in more detail, that of Krueger [Krueger, A. (). We suggest that, just as a bankruptcy court does for corporations, the IMF could play the role of granting ﬁrst-day orders to distressed sovereigns in the context of a sovereign bankruptcy procedure. Importantly, the IMF would not need any new funding to exercise this authority. Thus, a major additional. The Federal Rules of Bankruptcy Procedure (eff. Dec. 1, ) govern procedures for bankruptcy proceedings. For many years, such proceedings were governed by the General Orders and Forms in Bankruptcy promulgated by the Supreme Court. By order dated Ap , effective October 1, , the Supreme Court prescribed, pursuant to 28 U.S.C. § , the Bankruptcy Rules and . That the Bankruptcy Rules, heretofore prescribed by this Court, be, and they hereby are, superseded by the new rules, effective August 1, “4. That the Chief Justice be, and he hereby is, authorized to transmit these new Bankruptcy Rules to the Congress in accordance with the provisions of Section of Ti United States Code.”.
Bankruptcy law itself involves the application of principles of distributive and commutative justice to cases of insolvency. Though bankruptcy is occasionally suggested as one way forward, at present there is no bankruptcy procedure for sovereign states. There are, however, political actors and thinkers who have sought to outline frameworks for addressing these matters that go . Katz (), the Supreme Court found that a bankruptcy trustee’s proceeding to set aside the debtor’s preferential transfers to state agencies is not barred by sovereign immunity. A Bankruptcy Procedure for Sovereign Debtors? HAL S. SCOTT* This article explores whether a more formal bankruptcy procedure, the Sovereign Debt Restructuring Mechanism (SDRM) as proposed by the IMF, or in some modified form, is needed to deal with sovereign debt problems. The key consequences of the invocation of. States Code) and the Federal Rules of Bankruptcy Procedure, both of which may be reviewed at local law libraries, or to local rules of practice adopted by each bankruptcy court. Finally, this pamphlet should not substitute for the advice of competent legal counsel. For additional copies, please contact the Bankruptcy Judges Division.