Controversial BigLaw Clients: 'Vulture Funds'
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.
