Vulture funds are nothing but private investors buying sovereign bonds of countries on the verge of default or in the process of restructuring their debt. Through aggressive market speculation and disruptive litigation, such funds seek to make a profit by suing the debtor for an amount superior to the price paid to acquire the debt. Their activities, therefore, threatens States’ financial stability as well as their social structure since capital used to repay debt obligations is diverted from public expenditure and the promotion of basic social and economic rights. Consequently, international organizations and States have adopted recommendations and legislative measures to curb vulture fund litigation. National initiatives undertaken in some European countries constitute the focus of this chapter, which argues that a multiateral mechanism to manage sovereign debt restructuring is necessary in order to avoid the negative social impacts of vultures’ financial speculation.
