Sovereign default loophole

BBC News UN Human Rights Council backs Argentina on US debt row  24 September 2014 The United Nations Human Rights Council has passed a resolution in Geneva condemning a group of American hedge funds that took Argentina to court.

The US District Court for the Southern District of New York's interpretation of pari passu in Republic of Argentina v NML Capital Ltd [2014] creates a perverse incentive against the fundamental principles of sovereign debt restructuring. Because normal insolvency mechanisms are unavailable in sovereign default, collective action clauses should be applied universally. NML Capital's profiteering upon Argentina's omission of a collective action clause is unconscionable.