LEE BUCHHEIT RECOMMENDS USING US EXECUTIVE ORDERS TO RESTRUCTURE VENEZUELAN DEBT

Posted by Indira Crespo | May 20, 2019 9:20 am | Economics , News | 0  | 

Caracas, May 20, 2019 / - The team of Juan Guaidó, who was sworn in as president in charge of Venezuela, hired veteran sovereign debt lawyer Lee Buchheit to help restructure the external debt burden, which amounts to 150,000 millions of dollars.

The Financial Times (FT) points out that this decision "could be a difficult approach against investors who have recovered the Venezuelan bonds and augurs a radical attempt to deal with the debts in case interim president Juan Guaidó manages to take control from the country".

Mr. Buchheit advocates using the executive orders (sanctions) of EE. UU To facilitate a rapid, deep and comprehensive restructuring, rather than a more detailed attempt adapted for each different type of creditor.

"Venezuela owes money to a vast group of creditors, including those who have unpaid bonds, promissory notes, arbitration awards and other claims. An executive order on Venezuelan assets on US soil would be "extraordinarily useful," Buchheit told the FT.

"Because it has such a diverse group of claimants, the chances of rivalry between creditors are unusually high," said the lawyer.

"The bondholders sit there and watch arbitrage holders like [Canadian gold miner] Crystallex and wonder if the arbitration holders are stealing a march on them," he said.

Crystallex, which is backed by hedge fund Tenor Capital, sued Venezuela over the nationalization of a gold mining project in 2011. Since then, it has seized hundreds of millions of Venezuela as part of the $ 1.4bn arbitration award it won. three years ago.

But, Mr. Buchheit argued: "If I had an asset preservation, I would eliminate that anxiety so that the creditors did not feel like they had to run to the courthouse to preserve their place in the queue."