Adventures in EM investing: Defaulted fake Venezuelan development-bank debt, anyone?

Question of the day, part 2. Skye Ventures: vultures, or just patsies?

It seems that Skye got sold a bunch of paper ostensibly issued by a now-bankrupt Venezuelan development bank — paper which, it would seem, was fake. So are they suing the people they bought the paper from? No. They’re suing Venezuela, on the grounds that in a now-reversed opinion which may or may not have been public, the Venezuela solicitor general (not even the finance minister) ruled that the bonds were valid.

But it seems to me incredible on its face that a court could grant a judgment to a “creditor” if no one ever lent any money to the supposed debtor in the first place.

Venezuela, naturally, seems to be cocking up the US legal case (in Ohio, of all places), and has recently fired its Florida-based law firm. But even the world’s most atrocious lawyer would have a pretty hard time losing this case.

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