Sri Lanka Seeks Further 5-Month Stay Over Hamilton’s $250M Damages

Reorg Asia Highlights: Sri Lanka is requesting from the District Court for the Southern District of New York a further five-month stay over the $250 million damages suit brought by Hamilton Reserve Bank, or Hamilton, in respect of the sovereign’s defaulted $1 billion 5.875% bonds due July 2022, or Bonds; Hamilton has stated it will oppose the extended stay on the basis that Sri Lanka has not made enough progress in its restructuring of debt owing to its private creditors; The initial six-month stay granted by the U.S. Court was “without prejudice” and was deemed not to be indefinite. The stay order was based on providing Sri Lanka with an opportunity to carry out a consensual restructuring resolution and avoid encouraging holdout creditor action, while at the same time not impairing Hamilton’s contractual rights under the Bonds; and When considering the stay extension motion, the U.S. court will again need to balance U.S. policy, which has a strong interest in ensuring the enforceability of debt but also encourages participation in IMF foreign debt resolution procedures. Relevant Documents: Sri Lanka Stay Motion Status Report Letter Intervenors Motion Sri Lanka has filed a motion in the District Court for the Southern District[...]