Interest on index linked debt instruments

In the insolvency of a non grantor debtor, the creditor is an unsecured creditor with an unsecured claim against the non grantor debtor.

Trade credit or indebtedness incurred in the ordinary course of business by an insolvency representative (or a debtor in possession) may be treated automatically as an administrative expense.

(a) The responsibility of any other company in the group for the external debts of the insolvent company (being all debts owed by the insolvent company except for those owed to related group companies, i.e. intra group debts )

In any event, it may be necessary to determine the balance of responsibilities between the interim insolvency representative and the debtor with respect to the operation of the debtor's business, bearing in mind that no determination as to commencement of insolvency proceedings has been made.

In Denmark, a judge was not required to report any debt or liability.

The court also ordered the plaintiff to calculate the interests of the debt.

Debt and debt servicing are steadily impoverishing the peoples concerned more and more every day, systematically preventing them from exercising their basic rights.

The insolvency law should clearly specify the balance of the rights and obligations between the debtor and any insolvency representative appointed as a provisional measure.

The combination of all these factors contributed to an acceleration of government debt accumulation and made debt service difficult or impossible.

Contribution payments would generally be made to the insolvency representative administering the insolvent estate for the benefit of the estate as a whole.

The Board was therefore unable to determine the validity of those obligations or to confirm whether any financial liability had been incurred at the time that the obligations were created.

20. One of the main obstacles to sustainable development was the debt overhang and the debt service payment.

The insolvency law should facilitate and provide incentives for post commencement finance to be obtained by the insolvency representative where the insolvency representative determines it to be necessary for the continued operation or survival of the business of the debtor or the preservation or enhancement of the value of the estate.

Balance of rights between the debtor and insolvency representative (paras. 50 and 70 73)

Permanent debtor creditor dialogues, the provision of transparency, and information on emerging market debt would be ensured through the creation of a permanent international debt framework secretariat.

In any event, the court will generally not have access to expertise or information additional to that provided by the insolvency representative on which to base its decision.

(d) providing for the examination of witnesses, the taking of evidence or the delivery of information concerning the debtor s assets, affairs, rights, obligations or liabilities

In that context, we reiterate the calls for more radical action by the international community, in line with recommendations that debt relief should cover multilateral and bilateral debt and reduce debt stock and debt servicing by up to 100 per cent.

A number of insolvency laws permit the insolvency representative (or a debtor in possession where that approach is followed) to determine that new money is required for the continued operation or survival of the business or the preservation or enhancement of the value of the estate and obtain unsecured credit without approval by the court or by creditors.

The Seven Year Ditch

For many countries in the region with severe debt burdens, the large share of multilateral debt continues to represent an obstacle to improving their debt profile.

Again, virtually all insolvency systems already have provisions in place to enhance recoveries by insolvency administrators from parties who have engaged in improper transactions with the debtor prior to its insolvency, but many of these provisions are difficult to enforce in the event of a multinational insolvency.

This led to increased concern about the levels of internal debt and total debt and the implications for servicing the debt.

Currently its debt service status amounts to 115 million annually.

(a) Allow the debtor a breathing space while restructuring its economy

The super priority ranks ahead of administrative creditors.

Public and publicly guaranteed debt continued to account for the major share of long term debt, at 83 per cent of the total, but the volume of private non guaranteed debt accelerated by 18 per cent and its share rose from 15 per cent in 1996 to 17 per cent of the total.

Debt sustainability indicators for Haiti are mixed.

To address the debt burden problem, many African countries at first resorted to repeated debt rescheduling which focused on debt service flows, resulting in steadily increasing debt stocks and related service payments.

(b) Based on the debtor's incapacity.

That underscores the need for the cancellation of debts that cannot be serviced without placing a burden on impoverished people in the region.

In Niger, no provisions existed concerning the debts and liabilities of judges, irrespective of the amount involved.

When obtaining credit or incurring indebtedness is essential to maximizing the value of assets, and the credit or finance is not otherwise available as an administrative expense or is to be incurred outside the ordinary course of business, the court may authorize that credit or debt to be incurred as an administrative expense, to be afforded super priority ahead of other administrative expenses or to be supported by the provision of security on unencumbered or partially encumbered assets.

35. The debt burden adjustment should continue to be based on both principal and interest payments.

Several participants expressed the need for unconditional cancellation of debt.

Equally worrying is Africa's unsustainable debt burden.

(ii) Based on the account debtor's incapacity

On debt, he noted the need for comprehensive debt cancellation without conditionalities, including measures to help African countries outside the HIPC framework.

This is also designed to free HIPC countries from a seemingly endless sequence of debt rescheduling and refinancing arrangements, regardless of the soundness of the policies adopted by the debtor countries.

In addition, in Australia, the insolvency legislation provides for the liability of a holding (parent) company for the debts of a subsidiary company that became insolvent if it is established that the subsidiary was permitted by the parent to engage in insolvent trading.

Some insolvency laws require such borrowing or credit to be approved by the court or by creditors, while other laws provide that the insolvency representative may obtain the necessary credit or finance without approval.

The insolvency law should specify that the court, at its own motion or at the request of the insolvency representative, the debtor, a creditor or any other person affected by the provisional measures, may review and modify or terminate those measures.

In recognition of the fact that many of the poorest developing countries continue to face unsustainable debt burdens, the Heavily Indebted Poor Countries Debt Initiative was launched in September 1996.

19. Invites creditors and debtors to continue to use, where appropriate and on a case by case basis, mechanisms such as debt swaps for alleviating the debt burden of low and middle income developing countries with an unsustainable debt burden that are not eligible for the Heavily Indebted Poor Countries Initiative, and takes note of the discussions and assessment by the Paris Club of the proposal for Debt for Equity in Millennium Development Goal Projects