Law Practice
Controversial BigLaw Clients: ‘Vulture Funds’
Posted Oct 17, 2007, 12:15 pm CST
By Martha Neil
Big law firms in London and the U.S. that represent so-called vulture funds are becoming a target for criticism.
A number of funds have purchased distressed sovereign debt issued by Third World countries at a fraction of its face value, then retained a major law firm and sued for the full amount, reports the Guardian, a British newspaper. Among them: "Donegal International, an offshore vulture fund, burst into the spotlight this year when it won an award for $15 million from impoverished Zambia in the UK High Court. Donegal paid $3 million for some old Zambian debt, then sued for $55 million, although the London judge reduced the award to $15 million."
Critics contend that the suits hit impoverished countries hard, and are a further burden on citizens earning infinitesimal incomes by the standards of Britain and the U.S. Plus, they say, the suits are in conflict with the foreign policy goals of both countries.
Among the law firms that reportedly have represented vulture funds making such claims during the past decade or so are London-based Allen & Overy (Donegal is its client), Philadelphia-based Dechert and New York-based Weil Gotshal.
Legislators in both Britain and the U.S. are urging changes to prevent vulture fund lawsuits from countervening the countries' foreign policy goals, the Guardian says.
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Comments
Posted by Djunga Shango - 1 year, 1 month, 2 weeks, 15 hours, 14 minutes ago
I find your article simplistic in the extreme. So now it should be against the law to collect a debt if your government is providing debt relief to the debtor country? And the lawyers should be chastised for practising their profession?
Why did the Guardian not discuss the amount of money paid to DLA, the lawyers for Zambia in the Donegal case? Because they would have had to reveal that it was twice what Donegal paid Allen and Overy and that Zambia’s legal fees were paid by the UK government… and worse yet that they were paid to Tony Blair’s brother, Bill (a QC). They might also have to report that DLA in the mid-90’s represented vultures suing Zambia and took it straight through to judgment… The Guardian, lke the BBC, never lets facts get in the way of their version of the story… The ABA Journal should know better than to reheat the hash put out by another publication.