Kyle Siskey
Staff writer
Cross-border investors will negotiate out-of-court agreements with Latin American companies in 2009 to avoid local courts.
While the credit freeze has not hit Latin America as hard as the US or Europe, due to its related investment in US mortgages Latin American lawyers are bracing for a series of cross-continent insolvency negotiations between foreign banks and local companies.
The methods used will depend on which government the investors are dealing with. But ultimately out-of-court settlements will be more beneficial than risking judgement from a civil court with political considerations such as jobs and local economies.
Governments allied to Venezuela will tend to want more involvement with private investors, while more capitalist administrations will opt for less participation.
Bolivia is one such Venezuelan ally, whose bankruptcy law is more than 35 years old. The economy is based upon oil export, and as those prices drop in 2009 a wave...