| Vulture fund |
|Financial groups to profit from the debts of the poor|
Vulture funds are usually[clarification needed] a private equity group or fund that buys defaulted debt that belongs to individuals, companies or nations. They are criticised as being ruthless in pursuing the debt they have purchased, often negating any gains the debtor has made in managing the debt or pursuing debt relief. They also often engage in payments to government, paying well connected lobbyists or making large donations to political parties.
In 1996, there was what Saskia Sassen termed "a groundbreaking moment in the modern history of finance", when a New York judge "broke with long-standing international law and custom, according to which sovereign governments are not sued in regular courts meant to deal with questions internal to a nation state" and agree to hear a case brought by Elliott Associates for recovery of Panamanian debt.
Romania loaned $40M to Zambia to buy tractors in 1979, in 1999 unable to keep up the payments they negotiated to settle the debt for $3M but before this could happen Debt Advisory International stepped in and purchased the debt for $4M they then commenced to sue for the original amount plus interest.
- Michael Sheehan - Debt Advisory International, Donegal International
- Paul Singer - Elliot Management Corporation - Paul Singer is a major donor to the Republican Party
- Peter Grossman - FG Capital Management
- Croft, Adrian. "New law limits claims by vulture funds", Reuters UK website, posted 8 April 2010, accessed 10 April 2010.
- International "UN Votes for Process to Enact Bankruptcy Treaty and Stop Vulture Funds", 2014