Fachartikel
The Final Demise of Unfair Debtor Discrimination?

The Final Demise of Unfair Debtor Discrimination?

Comments on Ms Krueger's Speeches

Krueger’s proposal to "mimick" domestic insolvency laws marked the abrupt end of the IMF’s fierce opposition against sovereign insolvency. It was a full U-turn regarding the Fund’s views on sovereign debts. This paper analyses Krueger’s first speeches critically. It discusses which domestic insolvency law should be emulated, municipal insolvency (Chapter 9) or corporate insolvency (Chapter 11), who should decide and chair procedures, whether rogue creditors are a reason why sovereign insolvency cannot be implemented quickly – as Krueger asserted - whether it could already applied in the cases of Argentina and Turkey. It argues that all loans must be subject to this procedure, i.e. multilateral debts must not be exempt, as suggested by Krueger. The alternative model of an international Chapter 9 should be applied to all insolvent sovereigns. Fresh money lent during the process. Finally, the author concurs that fresh money lent during insolvency proceedings must enjoy preference, and that delaying the necessary solution causes undue and avoidable damages.