International Debt Workouts (LAW-884-001)
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This is an experiential course and a simulation of a cross-border debt restructuring. The simulation involves the out-of-court debt restructuring, or "workout," of a corporation in financial distress. Students will work in teams throughout the semester, as bankers, lawyers, and corporate directors.
Initially, we will be part of an international law firm, whose client is a large multinational bank with a troubled loan to a company in an emerging economy. Our work will include conducting due diligence, recommending a legal strategy, coordinating the creditor group, establishing negotiation strategies for our client, structuring the transaction documents, and closing the deal.
The objectives of this simulation are to: (1) acquire an overview of regulatory, market, legal and entity based risk analysis that is foundational to a cross-border restructuring; (2) develop a deep understanding of a team based, multicultural approach to negotiating multi-step transactions with multi-jurisdictional issues; (3) develop an understanding of the role of a legal team within a cross-border financial transaction; (4) develop experience in complex negotiations that involve rapidly changing power dynamics; and (5) develop experience with outcome-based negotiations within a constrained environment.
The exponential growth of international trade in financial services and cross-border lending in recent decades has brought the need to restructure some of that debt. These restructurings are amongst the fastest growing components of cross-border financial transactions.
The course grading criteria are below (there are no exams):
• 5 papers. 3 pages/paper. 10 points/paper (50 total points)
• Simulation/Negotiation Participation: 5 sessions. (30 total points)
• 5 simulations journals. 1 page/journal. 2 points/paper (10 total points)
• Class Participation (10 total points)
Textbooks and Other Materials
The textbook information on this page was provided by the instructor. Students should use this information when considering purchases from the AU Campus Store or other vendors. Students may check to determine if books are currently available for purchase online.
The course lectures and simulation will refer to various concepts derived from the books below regarding negotiations, power dynamics and team development.
Greene, Robert: The 48 Laws of Power, Penguin Books, New York, 2000.
Fisher, Roger et al., Getting to Yes: Negotiating Agreement Without Giving In, Penguin Books, New York, 2011.
Katzenbach, Jon R. et al., HBR’s 10 Must Reads On Teams, Harvard Business Review Press, Brighton, MA, 2013.
First Class Readings
Buljevich, Esteban: Cross-Border Debt Restructurings – Innovative Approaches for Creditors, Corporates and Sovereigns, Euromoney Books, London, 2005 – Chapter 1 (minus INSOL Principles) and Chapter 2;
INSOL Principles – download online at: http://www.insol.org/pdf/Lenders.pdf: and
Wessels, Bob: Cross-Border Insolvency – International Instruments: Commentary, Kluwer Law International, 2007 – pages 1-16; 268-282; and 607-609.
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