• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
Harvard Law School Bankruptcy Roundtable

Harvard Law School Bankruptcy Roundtable

  • Blog
  • About Us
  • Coverage-in-Depth
    • Crypto-Bankruptcy
    • Purdue Pharma Bankruptcy
    • Texas Two-Step and the Future of Mass Tort Bankruptcy
  • Subscribe
  • Show Search
Hide Search

Venezuela’s Restructuring: A Realistic Framework

By Mark A. Walker (Millstein & Co.) and Richard J. Cooper (Cleary Gottlieb Steen & Hamilton, LLP).

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 prioritize 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.  Financially, 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.

Given this array of problems, Venezuela and its national oil company, PDVSA, face what may be the most complex and challenging sovereign debt restructuring to date.  This paper proposes a framework for restructuring and discusses the key issues that will arise during the restructuring process.  These issues include the vulnerability of PDVSA assets outside Venezuela to actions by creditors (which affects, most importantly, receivables from petroleum sales and PDVSA’s interest in the U.S.-based CITGO); whether the restructuring should be implemented in one or two steps (an immediate restructuring versus the reprofiling of principal payments in the short term); the incentives and disincentives for would-be holdout creditors to join a restructuring; and the admissibility and treatment of various claims (such as PDVSA bonds that may have been originally issued at prices below their par value and claims against PDVSA for services billed at significant premiums to market prices).

The article is available here.

Mark A. Walker is Managing Director and Head of Sovereign Advisory at Millstein & Co.  Richard J. Cooper is a Senior Partner in the Restructuring Group at Cleary Gottlieb Steen & Hamilton, LLP.  The views expressed in the article are those of the authors only.

Written by:
Editor
Published on:
October 3, 2017

Categories: International and Comparative, Workouts and Pre-PacksTags: Cleary Gottlieb, Mark A Walker, Millstein & Co, PDVSA, restructuring, Richard J Cooper, Sovereign Debt, Venezuela

Primary Sidebar

Categories

Recent Posts

  • Chapter 15 Case Demonstrates Its Effectiveness as an Expedient Judicial Solution for Singaporean Insolvencies in the United States May 13, 2025
  • Do Rights Offerings Reduce Bargaining Complexity in Chapter 11? May 6, 2025
  • Rockville Centre Case Offers a Framework for Settling Mass Tort Bankruptcy Claims Post-Purdue April 29, 2025

View by Subject Matter

363 sales Anthony Casey Bankruptcy Bankruptcy administration Bankruptcy Courts Bankruptcy Reform Chapter 11 Chapter 15 Claims Trading Cleary Gottlieb Comparative Law Corporate Governance COVID-19 cramdown David Skeel Derivatives DIP Financing Empirical FIBA Financial Crisis fraudulent transfer Jared A. Ellias Jevic Johnson & Johnson Jones Day Mark G. Douglas Mark Roe plan confirmation Priority Purdue Pharma Purdue Pharma bankruptcy restructuring Safe Harbors Schulte Roth & Zabel Sovereign Debt SPOE Stephen Lubben Structured Dismissals Supreme Court syndicated Texas Two-Step Trust Indenture Act Valuation Weil Gotshal Workouts

Footer

Harvard Law School Bankruptcy Roundtable

1563 Massachusetts Ave,
Cambridge, MA 02138
Accessibility | Digital Accessibility | Harvard Law School

Copyright © 2023 The President and Fellows of Harvard College

Copyright © 2025 · Navigation Pro on Genesis Framework · WordPress · Log in