Jersey Consults On 'Vulture Funds'
Wednesday, September 21, 2011
The Jersey government has launched a consultation on whether Jersey should limit
the operation of so called 'vulture funds' on the island.
The consultation green paper (R.114/2011) refers to the practices of companies,
often known as vulture funds, that buy sovereign debt at a substantial discount
on the open market before going on to pursue private legal actions against the
issuing country to recover the full value of the bonds.
The Chief Minister’s Department consultation seeks views on whether Jersey
should control the activities of such funds, noting their potential impact on international debt relief efforts.
Last year, the UK Government passed the Debt Relief (Developing
Countries) Act 2010, which temporarily limited the proportion of a sovereign debt that any
commercial creditor can reclaim through litigation under UK law. In May 2011,
the act was made permanent.
Chief Minister, Terry Le Sueur, said: "The UK Government has, uniquely,
put legislation in place to limit the sums that can be recovered through its
courts by legal actions of so-called vulture funds. A recent case in the Royal
Court has highlighted the question of whether Jersey should consider introducing
its own legislation on this matter. We welcome the views of everyone and we
appreciate the undertaking of the UK government to share its expertise in this
matter." |
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