International Debt Workouts (LAW-884-001)
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This is an experiential course and a simulation of cross-border corporate restructuring. The simulation involves the 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: (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
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Please refer to the course packet, and the reading assignments below.
First Class Readings
Buljevich, Esteban: Cross-Border Debt Restructurings – 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 – – pages 1-16; 268-282; and 607-609.
Draft UNCITRAL Notes on Cooperation, Communication and Coordination in Cross Border Insolvency Proceedings.
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