A "vulture fund" is a private equity fund (also called a hedge fund) that buys the debt of weak companies or heavily indebted countries with the intention of making a profit. (The term analogizes these investors to vultures, birds of prey that feed on dead or dying animals). For example, when Argentina defaulted on about $81 billion of loans in 2001, a hedge fund called Elliott Management bought some of these defaulted loans at a deep discount. It then sued, demanding that Argentina pay back the loans at full face value with interest, much more than it had paid. In 2012, a U.S. judge ruled in favor of the hedge fund - and said that until Argentina paid what it owed to Elliott Management, it was barred from paying any of its creditors (who had already agreed to accept less). In 2016, Argentina finally capitulated, agreeing to pay $2.4 billion to settle debt that Elliott Management had purchased 15 years earlier for just $117 million, generating an enormous windfall. Both the IMF and the World Bank said that the behavior of vulture funds like Elliott Management threatened the financial recovery of fragile economies. "When vulture funds sue for exorbitant amounts it's clearly taking away money that should be invested in health, education, infrastructure, and other social problems, and goes to line the pocked of already wealthy investors," said a representative of the nongovernmental organization (NGO) Africa Action.

Sources: "How One Hedge fund Made $2 Billion from Argentina's Economic Collapse," The Washington Post, March 29, 2016; and "A Good Week for Vulture Funds," The New Yorker, March 5, 2016.

Required:

Research another example similar to the above and discuss the facts of the situation. Detail the effect these actions have on stakeholders.