Opportunities and Pitfalls in Emerging Market Restructurings

Abstract

Creditors may face many challenges in emerging market debt restructurings, and they may find themselves at a distinct disadvantage in negotiations with debtors and their controlling shareholders. This article provides an overview of potential opportunities and pitfalls for creditors in such restructurings. It discusses potential opportunities that may arise in the course of a restructuring that could give creditors additional leverage vis-à-vis the debtor and its controlling shareholders. It also discusses potential pitfalls for the creditors that could have the effect of enhancing any existing advantages and leverage enjoyed by the debtor and its controlling shareholders.