Legal Problems in Trading LDC Debt

  • Ulrich Messer
  • Jörg Wulfken
Conference paper
Part of the Studies in International Economics and Institutions book series (INTERN.ECONOM.)

Abstract

The trading of LDC-assets involves numerous legal pitfalls to be considered by market participants. Legal obstacles mainly arise from the contractual framework of both transactions and transaction objects on the one hand1 as well as from the institutional setting for market participants on the other hand2, the latter mainly being determined by tax, accounting, and supervisory rules.

Keywords

Income Argentina Volatility Venezuela 

Preview

Unable to display preview. Download preview PDF.

Unable to display preview. Download preview PDF.

References

  1. 1.
    see Messer, Rechtliche Rahmenbedingungen für die Betätigung von Geschäftsbanken im gung gung internationalen Forderungshandel (1989), 18seqq., 135seqq.; Wulfken, Juristische Strukturen und ökonomische Wirkungen von debt equity swaps (1989), 86seqq.; Berger, Innovations in International Debt Management — An Institutional Analysis (1990), 60seqq.; Nicolaides, Documentation of LDC Asset Transfers, BJIBFL, August 1987, 108.Google Scholar
  2. 2.
    see Messer, supra note 1, 104se .; Wulfken supra note 43, 53se .; Berger, supra note 1, P, qq; P 2,, qq; rg, P 71seqq.; Franke, Institutionelle Gestaltungsmöglichkeiten zur Erleichterung des LDC-Portefeuille-Managements der Gläubigerbanken, Diskussionsbeiträge SFB 178 Serie II-Nr. 74 (1988), 2.Google Scholar
  3. 3.
    see Messer, supra note 1, 237seqq.; Wulfken, supra note 1, 100seqq.Google Scholar
  4. 4.
    see Messer, supra note 1, 81.Google Scholar
  5. 5.
    see Messer, supra note 1, 81.Google Scholar
  6. 6.
    see Messer, supra note 1, 89.Google Scholar
  7. 7.
    see Buchheit/ Reisner, The Effect of the Sovereign Debt Restructuring Process on Inter-Creditor Relationships, 1988 U. Ill. L. Rev., 493; Walker/ Buchheit, Legal issues in the Restructuring of Commercial Bank Loans to Sovereign Borrowers, in: Gr uson/Reisner (publ.), Sovereign Lending: Managing Legal Risk (1984), 139; Messer, supra note 1, 36seqq.Google Scholar
  8. 8.
    Buchheit/ Reisner, supra note 7, 495; Messer, supra note 1, 25seqq.Google Scholar
  9. 9.
    For the rescheduling process see Buchheit/ Reisner, supra note 7, 493seqq.; Messer, supra note 1, 22seqq.Google Scholar
  10. 10.
    see Ebenroth, The Changing Legal Framework for Resolving the Debt Crisis: A European’s Perspective, 1989 Int’l Lawyer, 629, 633seqq.; Messer, supra note 1, 22seqq.; Berger, supra note 1, 49seqq.Google Scholar
  11. 11.
    see Messer, supra note 1, 35seqq.Google Scholar
  12. 12.
    see Buchheit/Reisner, supra note 7, 500, Walker/Buchheit, supra note 7, 140seqq.Google Scholar
  13. 13.
    Buchheit/Reisner, supra note 7, 497seqq.; Messer, supra note 1, 39seqq.; Wulfken, supra note 1, 142seqq.; Berger, supra note 1, 54seqq.Google Scholar
  14. 14.
    see Messer, supra note 1, 49seqq.; Wulfken, supra note 1, 162seqq.Google Scholar
  15. 15.
    for a typical example see Messer, supra note 1, 50 note 141.Google Scholar
  16. 16.
    see Messer, supra note 1, 53seqq.Google Scholar
  17. 17.
    for an example see Messer, supra note 1, 53 note 149.Google Scholar
  18. 18.
    see Messer, supra note 1, 55.Google Scholar
  19. 19.
    for an example see Messer, supra note 1, 55 note 151.Google Scholar
  20. 20.
    Penn/ Shea/ Arora, Banking Law, Vol. 2, The Law and Practice of International Banking (1987), 142.Google Scholar
  21. 21.
    see Messer, supra note 1, 88, Wulfken, supra note 1, 88seqq.Google Scholar
  22. 22.
    see Messer, supra note 1, 49seqq., 88, 151seqq.; Wulfken supra note 1, 88seqq.Google Scholar
  23. 23.
    see Messer, supra note 1, 53seqq., 88, 151seqq, 160seqq. ; Wulfken supra note 1, 88seqq.Google Scholar
  24. 24.
    see Messer, supra note 1, 55, 88, 155, 162seqq., Wulf ken, supra note 1, 88seqq.Google Scholar
  25. 25.
    see Messer, supra note 1, 89seqq.Google Scholar
  26. 26.
    see Nicolaides supra note 1, 108seqq., Messer, supra note 1, 138seqq.Google Scholar
  27. 27.
    see Nicolaides supra note 1, 109; Messer, supra note 1, 141seqq.Google Scholar
  28. 28.
    see Nicolaides supra note 1, 111, Messer, supra note 1, 144seq.Google Scholar
  29. 29.
    Messer, supra note 1, 145.Google Scholar
  30. 30.
    see Nicolaides supra note 1, 112seqq., Messer, supra note 1, 145seqq.Google Scholar
  31. 31.
    Messer, supra note 1, 239seq.; Wulfken, supra note 1, 102.Google Scholar
  32. 32.
    Messer, supra note 1, 239seq.Google Scholar
  33. 33.
    Messer, supra note 1, 111.Google Scholar
  34. 34.
    see Messer, supra note 1, 111.Google Scholar
  35. 35.
    see Messer, supra note 1, 112.Google Scholar
  36. 36.
    see Messer, supra note 1, 112.Google Scholar
  37. 37.
    i.e. the Officer of the Controller of the Currency, the Board of Governors of the Federal Reserve Board and the Federal Deposit Insurance Corporation.Google Scholar
  38. 38.
    see Ebenroth/Wolf, Bankaufsichtsrecht und Forderungshandel mit Umschuldungsländerkrediten als Ausweg aus der Verschuldungskrise, 1990 ZVg1RWiss, 8, 11 – 16; Buchheit, Alternative Techniques in Sovereign Debt Restructuring, 1988 U. Ill. L. Rev., 371, 379seqq.; Lichtenstein, US Response to the International Debt Crisis: The International Lending Supervision Act of 1983 and the Regulations Issued under the Act, in: Eskrdge (publ.), A Dance Along the Precipice (1985), 177seq.; Wulfken, supra note 1, 74seq.; Messer, supra note 1, 113seq.Google Scholar
  39. 39.
    Wulfken, supra note 1, 75.Google Scholar
  40. 40.
    see Messer, supra note 1, 114; Kredite Abschreiben, Handelsblatt 13.07/14/1990, 14.Google Scholar
  41. 41.
    Kredite Abschreiben, supra note 40, 14; Mexico-Finanzpaket im Detail ausgearbeitet; Neue Zürcher Zeitung 01/13/1990, 13.Google Scholar
  42. 42.
    Ebenroth/ Wolff, supra note 38, 13, Messer, supra note 1, 113.Google Scholar
  43. 43.
    Commission Fédérale des Banques (Publ.), Rapport de gestion 1989, 36; Messer, supra note 1, 115.Google Scholar
  44. 44.
    To the contrary position of the Luxembourg Ministry of Finance who openly publishes reserve levels for specified countries accepted as tax deductible, see: Kredite an die DDR können zur Hälfte wertberichtigt werden, Frankfurter Allgemeine Zeitung 09. Jan. 1990; 20.Google Scholar
  45. 45.
    Messer, supra note 1, 115.Google Scholar
  46. 46.
    see Messer, supra note 1, 116.Google Scholar
  47. 47.
    see Messer, supra note 1, 117.Google Scholar
  48. 48.
    see Bank of England (publ.), Country Debt Provisions, un ubl. 08/05/1987, Annex p. 3; f g (P), ry, P P Messer, supra note 1, 87; Höhere Kreditrückstellungen der britischen Banken, Neue Zürcher Zeitung, 01/31/1990, 13.Google Scholar
  49. 49.
    see Mendelowitz, Legislative and Administrative Obstacles to Writedowns and Swapping of Less Developed Country Debt, GAO-Doc. T-NSIAD–87–29 (1987), 15; United States General Accounting Office (publ.), International Banking — Supervision of Overseas Lending is Inadequate, GAO/NSIAD–88–87 (1988), 29; Messer, supra note 1, 120; Berger, supra note 1, 95.Google Scholar
  50. 50.
    see Mendelowitz, supra note 49, 15.Google Scholar
  51. 51.
    see Mendelowitz, supra note 49, 15.Google Scholar
  52. 52.
    see Messer, supra note 1, 122.Google Scholar
  53. 53.
    Ebenroth/ Wolff; supra note 33, 13; Wulfken supra note 1, 122; Messer, supra note 1, 122.Google Scholar
  54. 54.
    see Messer, supra note 1, 122.Google Scholar
  55. 55.
    see Messer, supra note 1, 113.Google Scholar
  56. 56.
    see Baumann/ Harvey, LDC Debt Strategies: Accounting and Tax Issues, Bank Accounting & Finance, Summer 1989, 16; Saunders, An Offer they can’t refuse, Forbes, 29.05.1988, 144; Messer, supra note 1, 122.Google Scholar
  57. 57.
    for newer judgements regarding the results of the Brady Initiative, see: Berger, supra notely, P 1, 45; Schmidt, Baker, Brady und die Banken, Frankfurter Allgemeine Zeitung, 08/25/1990, 13; for its Implementation, see Ebenroth/ Bühler, Die Implementierung der Brady-Initiative in Mexico und den Philippinen, RIW 1990, 23; Ebenroth, Die Entwicklung Mexikos im Zeichen der Brady-Initiative, Aussenwirtschaft 1990, Heft II, Grüsch: Rüegger, 237.Google Scholar
  58. 58.
    Saunders, supra note 56, 144.Google Scholar
  59. 59.
    see Messer, supra note 1, 127.Google Scholar
  60. 60.
    Barnett, United Kingdom, in: Young (publ.), Managing International Bank Taxation (1988), 368.Google Scholar
  61. 61.
    Barnett, supra note 60, 368.Google Scholar
  62. 62.
    Wulfken, supra note 1, 64seqq.; Messer, supra note 1, 124seqq.Google Scholar
  63. 63.
    see Messer, supra note 1, 86, note 258.Google Scholar
  64. 64.
    see Messer, supra note 1, 125.Google Scholar
  65. 65.
    see Messer, supra note 1, 125.Google Scholar
  66. 66.
    see Messer, supra note 1, 125.Google Scholar
  67. 67.
    see Wulfken, supra note 1, 57.Google Scholar
  68. 68.
    see Berger, supra note 1, 94seqq.Google Scholar
  69. 69.
    Messer, supra note 1, 128.Google Scholar
  70. 70.
    see Messer, supra note 1, 108seqq.; Ebenroth, Finanzinnovationen im LDC-Merchant Banking, in: Verband öffentlicher Banken (publ.), Aktuelle Fragen des Bank– und Kreditrechts (1990), 119, 131seqq.Google Scholar
  71. 71.
    United States Accounting Office (publ.), supra note 49, 28; Messer, supra note 1, 128.Google Scholar
  72. 72.
    see United States Accounting Office (publ.), supra note 49, 28; Messer, supra note 1, 129.Google Scholar
  73. 73.
    see Messer, supra note 1, 129.Google Scholar
  74. 74.
    see Messer, supra note 1, 130.Google Scholar
  75. 75.
    Wulfken, supra note 1, 57.Google Scholar
  76. 76.
    Wulfken, supra note 1, 67; Messer, supra note 1, 131.Google Scholar
  77. 77.
    Messer, supra note 1, 130.Google Scholar
  78. 78.
    Messer, supra note 1, 130.Google Scholar
  79. 79.
    see Messer, supra note 1, 131, Ebenroth, supra note 70, 133.Google Scholar
  80. 80.
    see Messer, supra note 1, 131.Google Scholar
  81. 81.
    see Messer, supra note 1, 133.Google Scholar
  82. 82.
    see Amdt, Die Besteuerung internationaler Geschäftstätigkeit deutscher Banken (1986), 95.Google Scholar
  83. 83.
    see Ebenroth, Die verdeckten Vermögenszuwendungen im transnationalen Unternehmen (1979), 126.Google Scholar
  84. 84.
    see Ebenroth, supra note 10, 638; Messer, supra note 1, 247.Google Scholar
  85. 85.
    in opposition to Schmidt, supra note 57, 13.Google Scholar
  86. 86.
    to the opposite opinion see Messer, supra note 1, 86, contrary to Wulfken, supra note 1, 67.Google Scholar
  87. 87.
    in conformity with Messer, supra note 1, 87; see also Schmidt, supra note 57, 13.Google Scholar
  88. Berger, Walter (1988), Neue Ansätze im Schuldenmanagement für Entwicklungsländer, Sparkasse 3, pp. 123–129.Google Scholar
  89. Fidler, S. (1989), Third World debt traders: the insolved mystery, Financial Times, December, p. 19.Google Scholar
  90. Messer Ulrich (1989), Rechtliche Rahmenbedingungen für die Betätigung von Großbanken im internationalen Forderungshandel, Hartung & Gorre, Konstanz.Google Scholar
  91. Wulfken, Jörg/Berger, Walter (1988a), Internationaler Forderungshandel und Verschuldungskrise, Recht der Internationalen Wirtschaft, pp. 585–588.Google Scholar
  92. Wulfken, Jörg/Berger, Walter (1988b), Juristische und ökonomische Grundlagen des internationalen Handels mit Kreditforderungen, Zeitschrift für Vergleichbare Rechtswissenschaft 87, pp. 335 – 375.Google Scholar
  93. Wulfken, Jörg (1989), Juristische Strukturen und ökonomische Grundlagen von debt equity swaps, Hartung & Gorre, Konstanz.Google Scholar

Copyright information

© Springer-Verlag Berlin Heidelberg 1992

Authors and Affiliations

  • Ulrich Messer
  • Jörg Wulfken

There are no affiliations available

Personalised recommendations