How to Restructure Venezuelan Debt // Lee C. Buchheit Cleary Gottlieb Steen & Hamilton LLP - New York Office // Augen auf aufgepasst....Argentinien/Griechenland und dutzende ander Schneiderein von Sovereigns

How to Restructure Venezuelan Debt

17 Pages Posted:  

Lee C. Buchheit

Cleary Gottlieb Steen & Hamilton LLP - New York Office

G. Mitu Gulati

Duke University School of Law

Date Written: July 21, 2017

Abstract

There is a growing consensus that Venezuela will not be able to persist for much longer with its policy of full external debt service. The social costs are just too great. This implies a debt restructuring of some kind. Venezuela, principally through its state-owned oil company, Petróleos de Venezuela, S.A. (“PDVSA”), has extensive commercial contacts with the United States. Not since Mexico in the 1980s has an emerging market country with this level of commercial contacts attempted to restructure its New York law-governed sovereign debt. Holdout creditors in a restructuring of Venezuelan sovereign debt will therefore present a serious, potentially a debilitating, legal risk. The prime directive for the architects of a restructuring of Venezuelan debt will be to neutralize this risk.

Keywords: venezuela, sovereign debt restructuring, bankruptcy, contracts

JEL Classification: F33, F34, H63, H12, H81, K12, K22

Suggested Citation:

Buchheit, Lee C. and Gulati, G. Mitu, How to Restructure Venezuelan Debt (July 21, 2017). Available at SSRN: https://ssrn.com/abstract=