Odd Lots Here's What Could Happen to Venezuela's Messy $170 Billion of Debt
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Jan 8, 2026 
Lee Buchheit, a seasoned sovereign debt lawyer with extensive experience in complex debt restructurings, dives into Venezuela's staggering $170 billion mess. He explores the heated debates surrounding who should bear the burden of this debt and discusses the implications of 'odious debt' claims. Lee also shares insights from past restructurings, such as Iraq, while addressing the role of hedge funds in the current crisis. With U.S. sanctions complicating matters, Buchheit offers creative solutions for potential recovery and restoration.
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Informal Creditor Hierarchy
- Multilateral lenders (IMF, World Bank, IDB) are treated as preferred creditors by convention.
- Beyond them, government and commercial creditors rank similarly with no formal seniority.
Odious Debt Is Narrow And Risky
- International law generally requires successor governments to honor predecessor debts.
- The odious debt doctrine is narrow and too vague for broad application.
Iraq Restructuring Precedent
- After the 2003 invasion, the U.S.-led coalition prioritized clearing Iraq's debt to spur recovery.
- Paris Club creditors ultimately wrote off about 80% of Iraq's government debt.
