The Evolution Of Modern Sovereign Debt Litigation: Vultures, Alter Egos, And Other Legal Fauna

This article examines the progression of sovereign debt case law as displayed by the succession of litigation strategies employed by professional suers of defaulted sovereign states. These plaintiffs are often referred to as "vulture funds" because their strategy is to buy sovereign debt instruments when a country is most vulnerable. This article provides some historical context for the emergence of investors specializing in speculation in sovereign debt litigation. The first phase of vulture-fund suits against foreign sovereigns, which was dominated by litigation over the champerty defense, is examined. In the post-champerty phase of sovereign debt litigation, some plaintiffs advanced a novel theory of pari passu as a 'nuclear device' in their efforts to enforce judgments against sovereigns. Presently, there is an increased focus on litigation over the 'commercial activity' exception to execution immunity. Adapted from the source document.