Richard J. Cooper is a Senior Restructuring Partner at Cleary Gottlieb Steen & Hamilton LLP.

“There’s a man going round, taking names. And he decides who to free and who to blame. Everybody won’t be treated all the same.” - Johnny Cash,

 “The Man Comes Around”1 Venezuela’s Restructuring: A Realistic Framework Mark A. Walker & Richard J. Cooper2 September 19, 2017 Abstract Venezuela is confronting an economic and financial crisis of unprecedented proportions. Its economy remains on a precipitous downward trajectory, national income has more than halved, imports have collapsed, hyperinflation is about to set in and the government continues to follow a policy of prioritizing the payment of external debt over imports of food, medicine and inputs needed to allow production to resume. Bad policies are complemented by bad news as oil production and prices have declined dramatically from previous highs. On the financial side, the country is burdened with an unsustainable level of debt and has lost market access. Venezuela will be unable to attract the substantial new financing and investment required to reform its economy without a comprehensive restructuring of its external liabilities. The Republic and its national oil company, PDVSA, are facing what may be the most complex and challenging sovereign debt restructuring to date. This paper, authored by Mark A. Walker, Managing Director and Head of Sovereign Advisory at Millstein & Co., and Richard J. Cooper, a Senior Partner in the Restructuring Group at Cleary Gottlieb Steen & Hamilton, LLP, proposes a framework for restructuring and discusses the key issues that will arise during the restructuring process, including the vulnerability of PDVSA assets outside Venezuela to actions by creditors, whether the restructuring should be implemented in one or two steps, the use of nontraditional techniques to seek to address sovereign and quasi-sovereign debt, incentives to and disincentives that may persuade would-be holdout creditors to join a restructuring and the admissibility and treatment of various claims. 1 Music by Huddie Ledbetter (1888-1949), musician, songwriter and murderer—rerecorded with new lyrics and again popularized by Johnny Cash. 2 Mark A. Walker is a Managing Director and Head of Sovereign Advisory at Millstein & Co. Richard J. Cooper is a Senior Restructuring Partner at Cleary Gottlieb Steen & Hamilton LLP. The view expressed herein are those of the authors and not necessarily those of Millstein & Co. or Cleary Gottlieb Steen & Hamilton LLP. This article is for general information purposes and is not intended to be, and should not be taken as, legal advice. The authors wish to thank Luke A. Barefoot, Alice Chong, Ashley Winston, Sean Sakaguchi, Philip A. Cantwell and Matthew J. Livingston for their assistance in preparing this article