Bondholders rights: the gloves are off

On the ropes for much of 2001, European bondholders are starting to react against the sliding value of their paper by going on the offensive against errant borrowers. Kathryn Tully takes a look at how bondholder groups have taken a lead from their US counterparts in defending their rights

With the growth of the European high yield bondmarket,
the debate about bondholder rights has become a hot topic. Now, as the amount of corporate restructuring activity continues to surge throughout Europe, an increasing number of bondholders, who have already seen the value of their paper plummet, have been left wondering whether they can salvage any cash at all from the wreckage of distressed or insolvent companies.

“2001 has been a year in Europe when bondholders have learned how painful