41 Geo. Wash. Int'l L. Rev. 681 (2009-2010)
State-to-State Debts: Sovereign Immunity and the Vulture Hunt

handle is hein.journals/gwilr41 and id is 687 raw text is: NOTE
Jonathan Goren*
In 1979, Zambia borrowed $15 million from Romania to
purchase tractors.' Nearly thirty years later, that debt came back to
haunt her. Donegal International, Limited (Donegal), a private
investment fund, purchased Zambia's debt from Romania in 19982
and sued Zambia in 20053 for more than $55 million.4 The 2007
litigation in a British court was closely watched in financial, legal,
and development circles.
Debt-relief advocates were more than just spectators; they were
vocal advocates of Zambia, and of the developing world, in gen-
eral.5 They denounced Donegal and other distressed debt inves-
tors6 like it that purchase the sovereign debt of poor countries at
deep discounts and then sue the debtor nations seeking windfall
judgments.7 The critics call them vulture funds because they
prey on financially vulnerable countries.8 Rather than profiting
affluent Western investors, pro-development non-governmental
organizations (NGOs) such as Oxfam International (Oxfam) and
* Associate, Jones Day L.L.P., N.Y.C. J.D. 2009, The George Washington University
Law School; B.A. 2006, Boston University. The author would like to thank his parents and
sister, Riana, for their love and support, and Justin Nasatir for his wisdom.
1. Donegal Int'l Ltd. v. Zambia, [2007] EWHC (Comm) 197, [61 (Eng.).
2.  Id. [82].
3.  Id. [23].
4.  Id. [1].
5. See, e.g., Alan Beattie, 'Vulture Funds' Circle but Debtors Stay a Moving Target, FIN.
TIMEs (London), Feb. 18, 2007, at 15.
6. Distressed debt investor is the more neutral term for what is commonly known
as a vulture fund, and what the personnel at these firms prefer to be called. See Felix
Salmon, In Defense of Vulture Funds, http://www.felixsalmon.com/2007/02/in-defense-of-
vulture-funds (Feb. 24, 2007, 11:00 PM). This Note will use both terms rather interchange-
ably. The International Monetary Fund (IMF) defines vulture funds as arbitrage-seeking
investors who specialize in obtaining debt in the secondary markets at prices far below face
value. Brian Finlay, Taming the Vulture: Turning Distressed-Debt Investors into Agents of Social
Change, HENRY L. STIMsoN CENTER (July 2, 2007), http://www.stimson.org/spotlight/tam-
7. See Finlay, supra note 6.
8. See, e.g., David Bosco, The Debt Frenzy, FOREIGN POL'v, July-Aug. 2007, at 36, 36, 38.

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