40 Hofstra L. Rev. 39 (2011-2012)
The Pari Passu Interpretation in the Elliott Case: A Brilliant Strategy but an Awful (Mid-Long Term) Outcome

handle is hein.journals/hoflr40 and id is 43 raw text is: THE PARI PASSU INTERPRETATION IN THE
ELLIOTT CASE: A BRILLIANT STRATEGY BUT AN
AWFUL (MID-LONG TERM) OUTCOME?
Dr. Rodrigo Olivares-Caminal*
[H]e that will not apply new remedies must expect new evils;
for time is the greatest innovator ......
- Francis Bacon (1561-1626)'
I. INTRODUCTION
Sovereigns can amass unsustainable debts, fueling the increasing
need to restructure to prevent or resolve financial and economic crises
and to achieve debt sustainability levels. From the 1990s, many
sovereign debt restructuring episodes experienced difficulties because
some bondholders did not accept the sovereign's exchange offer and
instead claimed the total value of the debt.2 These creditors are known as
holdouts or rogue creditors.
As a result of the debt exchange and the fact that after the
settlement there were outstanding bondholders that were holdouts and
that did not take part in the exchange offer, the dynamics in the
* Lecturer in Banking and Finance Law at the Centre for Commercial Law Studies, College
of Queen Mary, University of London. The author's personal e-mail address is
olivares.caminal@gmail.com.
1. Francis Bacon, Essays, Civil and Moral, in 3 THE HARVARD CLASSICS 7, 65 (Charles W.
Eliot ed., 1909). Francis Bacon was 1st Viscount St. Albans, English philosopher, statesman,
lawyer, scientist, and jurist. He served as Attorney General and Lord Chancellor of England. Bacon,
Francis (1561-1626), of Gray's Inn and Gorhambury Herts, HISTORY OF PARLIAMENT (1981),
http://www.historyofparliamentonline.org/volume/1558-1603/member/bacon-francis- 1561-1626;
Francis Bacon (1561-1626), BBC, http://www.bbc.co.uk/history/historic-figures/baconfrancis.
shtml (last visited Mar. 1, 2012).
2. See William W. Bratton, Pari Passu and a Distressed Sovereign's Rational Choices, 53
EMORY L.J. 823, 857 (2004).

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