What impact long-term, or even short-term, the tearing up, in effect, of creditor contracts with General Motors, Chrysler, not to mention the mortgage markets where people won't buy mortgage-backed securities unless you're the Fed precisely because you don't know what the rules of the game are?
The first kind could be forgiven, for the sake of commerce; the second kind had to be enforced, for the sake of creditors, contracts, and public morality.
Furthermore, we find that cradle-to-grave type policy interventions may actually lead to lower levels of human capital investment as altered default incentives induce private creditors to contract the supply of student loans by an amount greater than the subsidy.
An average day finds Cantor Broden juggling creditors, deliveries, membership contracts, renovations and far more.
The holding company's legal identity would change and holders of bonds issued by that entity would incur losses, but existing contracts with creditors to the operating subsidiaries would remain in place – without any losses for those lenders.
A conservative, Diocletian was concerned with the preservation of the ancient virtues: the obligation of children to feed their parents in old age; of parents to treat their children justly; of spouses to respect the laws of marriage; of sons not to bear witness against their fathers, or slaves against their masters; and of private property, creditor's rights, and contract clauses to be protected.
Borrowers would be forbidden to sell their right to roll over the debt; subject to that, there is no reason why creditors should not contract with other parties to finance the cost of the rollover.
In short, while Congress nominally created section 1113 to provide employees with more protection than routine contract creditors get, in many cases it may leave employees in a kind of purgatory.
What is most disturbing about Argentina's current intransigence is its refusal to uphold its contractual obligation of nondiscriminatory payment and abide by the rule of law to which it agreed in its contracts with the creditor community.
When countries borrow under their own law, nothing can stop them from rewriting contracts with their creditors, later on, to reduce what they owe.
Some creditors may be offered derivative contracts that will pay them handsomely if Iraq's economic or oil-export growth is faster than expected, as has been tried in Mexico and Venezuela.
