CreditSlips

As you almost certainly have seen, early morning, Tuesday, February 18, the Boy Scouts of America (BSA) filed chapter 11 (Case No. 20-10343). The filing solely was motivated by the deluge of sex abuse claims filed against BSA. There currently are approximately 275 lawsuits pending in state and federal courts across the country. The case raises a host of issues--from litigation consolidation and multi-district litigation to limited liability to ensuring that survivors have a voice in bankruptcy and in their pending cases.

The Big Lie just won’t die. The Big Lie, of course, is The Government Made Me Do It theory of the financial crisis, that the housing bubble whose collapse set off the crisis was the product of government policies encouraging affordable home mortgage credit.

There is a subtext to my recent exchange with Mitu (here, here, and here) about whether a judgment-holder is bound by a subsequent vote to modify a bond’s payment ter

Mitu’s post from two-days ago frames an important question. An investor holds a defaulted sovereign bond that includes a collective action clause, sues, and gets a final judgment for the full amount of the outstanding principal. Later, a majority of the remaining bondholders vote to restructure the bond’s payment terms—say, by accepting a 50% haircut. Is the judgment-holding investor somehow bound by this decision?