to the PILLORY
it works - illustrated with the Russian bonds
related observations, considerations and explanations
how it could work for you - queries and suggestion box
courtesy by: Swiss
Investors Protection Association, box 2580 - 1211 Geneva 2 - Switzerland
t+f: +4122-7400362 - e-mail: firstname.lastname@example.org - www.solami.com/gold.htm
NETIZEN DEBT EXCHANGE, list of alleged debtors:
Claims for services/goods/documents received and/or rights harmfully exercised by
assistance: IPU Punta-del-Este conf., lobbying)
$ 1 mio overdue earmarked for promoting decency in politics and business
GOVERNMENT / FRENCH GOVERNMENT
(Russian bonds from <1917, compensation for nationalizations, etc.)
$ 400 mio+ overdue inspired by the needs of both society and the market as well as by the principles of pacta sunt servanda and due compensation of victims (Holocaust and others)
Mohammed Sidik Mahmoud)
SFR 5 mio overdue earmarked for the thus looted Assyrian, Kurdish & Turkoman landowners
Mohammed Sidik Mahmoud)
$ 100'000 overdue earmarked for improved access to the League of Nations & UN Archives
SA, Vevey (WHO
baby food codex, lobbying)
SFR 370'000 overdue earmarked for the development of a formula for breast-feeding mothers
SA i.l., Geneva (overbilling
by bancruptcy administration, ATAG Ernst & Young)
SFR 2.7 mio overdue bookmarked for improvements of the Swiss bancruptcy law
AG (formerly Swiss Bank Corporation,
taxation agreement, bond holder protection: LBO
SFR 3.5 mio overdue earmarked against lex americana, phone tapping, bank secrecy violations
* * *
the Pillory works -
illustrated with the case of the Russian bonds
Our pilot project represents a private and public debts exchange - perhaps the first on the Internet. In the case of the pre-revolutionary Russian bonds issued in France, Soviet nationalizations and related claims, the Governments of France and Russia have concluded and immediately put into effect their long-negociated agreement of 27 May 1997 on the "final settlement of the reciprocal financial and real claims which appeared before 9 May 1945". Under this agreement, the Russian Government reportedly paid 1 August 2000 US$ 400 million as the difference between the claims of both parties. And the French Government will thus no longer support related claims, has set up a commission to work out the conditions and - to the dissatisfaction of most bond holders and observers - has effectuated the compensations for the individual French nationals.
This has given rise not only to investor frustrations but also to legal debates and attempts to challenge this outcome in French and European courts. For the bondholders concerned, these traditional avenues are risky, costly and time-consuming. Currently, the only practical alternative is for the claimants to register and/or directly market their claims by e-mail to either email@example.com Why? For one thing, the figures don't add up to even a shadow of the some US$ 50 billion - at current rates - which were invested notably in Russian railways and which, for the French investors at the time, were thus evaporated in the Siberian steppe. For another, these were mostly private investors of French and other nationalities. The deal worked out secretly is the result of unrelenting pressure from the bond holders and their association's president who managed to keep French public opinion, parliamentarians and banks unswervingly on their side. Still, and to the surprise of almost all observers, the deal stealthily put into effect seems to mix state obligations with private ones and, on top of it, to discriminate against non-French nationals. The justification and legal basis of all this is doubtful at best.
On closer analysis, the Russian negotiators, while appearing to cave in to French pressure, seem to have won this one - some even say they clobbered their French counterparts. Indeed, some of France's ENArchs (the often aloft wizards who graduated from France's Temple of Administration) are seen to have managed to totally relieve Russia of a monster debt for a plate of lentils - comparatively speaking. In doing so, they have now caused the French victims of Bolshevik recklessness to be additionally spoliated by having the French State settling its debts on the back of these very victims. What may have escaped these ivory tower negotiators is that, not least, the Holocaust debate has revived and significantly sharpened the citizen's perception of and sensitivity for fundamental principles. And that a new cross-European alliance has come to life between the original victims of 70 years of Soviet expropriations and those who - for tapestry, nostalgia or investment purposes - had bought these "non-valeurs" privately or at the Bourse de Paris where they remained quoted until 1996, purportedly in deferrence to the fundamental principles at stake.
these interested parties may then appreciate a few essential facts.
Firstly, that their governments found it possible and indicated to resort
to the compensation of reciprocal claims - as successfully practised
since time immemorial. Secondly, that as a result of this, they may
thus no longer have only the Russian Government as their legal debtor.
And thirdly, that they may thus finally get even. Either directly
by themselves claiming compensation with their dues (e.g. taxes) to the
government. Or indirectly, i.e. by way of our debt exchange which
provides for their claim to be sold eventually - at a discount, of course
- to an investor who either is capable and willing to wait for the results
of the official procedure, or who is prepared to effectuate compensation
Related observations, considerations and explanations
The above Russian bond case illustrates what this electronic debt exchange essentially is all about. Following are some related observations, considerations and explanations. Eventually, this exchange is expected to evolve into what President Clinton publicly called for, i.e. a genuinely tax- and customs-free virtual market place for countless real goods and services. The above list is an example, reflecting real services, real claims and "misunderstandings". Private and public debts are, of course, nothing new on the market. If they haven't fallen due yet, various factors, more or less reliably, allow the investor to assess the chances of his money to flow back at the prescribed date - thus driving e.g. bond prices up and down. The more solvent the private or public debtor, the smaller the risk and the commission/discount for early cashing. Similarly, in the case of uncontested and not-yet-due bills on solvent debtors, factoring agents buy them up at a relatively small discount.
Not so in the case of junk bonds. And not so in the case of contested bills - even if they concern debtors who are not known to have liquidity problems.Characteristically, junk bonds entail higher risks and correspondingly higher yields/discounts. And in the case of contested bills, the market players - if any can be found at all - regularly talk about an effective write off, offering perhaps a 1 to 5% consolation price.This imbalance could be rightened somewhat - at least when the debtor is solvent - with the help of what may be called a junk debt exchange.
This is how it could work - not least for you:
Assume you owe a payment to a given creditor X.Nota bene: The manager of the debt exchange cannot guarantee anything and he cannot either be held responsible for any element of the claims thus published. Nevertheless, in the interest of all parties concerned, he makes a due diligence effort to withhold or withdraw publication of manifestly false or unfounded claims.
Before you pay X, you routinely check at the SIPA debt exchange whether X is listed as allegedly owing an overdue amount of money to someone. You found X on the SIPA debt list, you click on the entry mentioning X and - thanks to the net - you are in direct contact with that claimant, which we may call Y. If you have convinced yourself that Y's claim merits better treatment, you negotiate with Y - directly over the net or with our assistance - in order to buy his claim against your creditor X, or a suitable fraction of that claim, at a price you and Y can live with (perhaps 20, 50 or 80%, depending on the circumstances and the negotiating skills brought to bear).
Thereupon you merely notify X, preferably (but not indispensibly) before your debt falls due, that with regard to your debt to X you effectuate payment by compensation with the title you acquired for receiving payment on the debt of X to Y.With that, your debt is legally off your shoulder, regardless of whether X accepted or contested his debt to Y, and regardless of what discount you agreed with Y (1).
This is but one scenario why it may be in the interest of both debtor and creditorto utilize the services of an effective impartial debt exchange (e.g. for an indirect measurement of a debtor's market standing, or for buying back one's own debt at a discount). Such a market place for private and public debts is herewith opened for business. It works in both directions and - initially at least - it is free of any commissions and fees (2). It will be automated as soon as we will have resolved some technical problems.If you have a documented, uncontested or contested but bona fide money claim for goods or services received or rights exercised harmfullyby any private person, company or public institution in or outside of Switzerland,you can now submit this claim for registration on this provisional SIPA site,which is hosted by the Global Ivory Tower, by e-mailing to: firstname.lastname@example.org- your own return e-mail address,With your application, you accept the conditions of registration, as detailed on this site. You thereby declare on your honor as a netizen
- name & address of person/company/institution to be put on pillory,
- a nutshell description (max. 7 words) of the subject of the claim
(optionally: a short bookmark or earmark note),
- the amount due (in US$ or Swiss francs),
- whether it is overdue or not, and
- your preference for maintaining this exchange through ads or registration fees.
(a) that you own and can freely dispose of the submitted bona fide claim or parts thereof and
(b) that you will sell only what is yours and are prepared to negotiate a discount.
Your claim will then be published in the SIPA debt list within approx. 14 days, with the manager of the debt exchange reserving the right to refuse publication of a claim or to withdraw a claim from the list without giving any reason or entering into related communications.During the test period only notoriously solvent persons, companies and institutions will be listed, the UN representing a borderline case. In the event, the manager, by way of associated specialists, avails his good offices and related services, e.g. if professional assistance is needed for working out a fair discount, for arbitrating a case, or for obtaining a prompt and mutually satisfactory out-of-court settlement.
(1) It may well be that X has had good reasons for not paying. But then again: maybe not, and X just tried his luck. Since claimant Y may no longer have the time or be able to afford the lawyer and court costs, no judge is examining the merits of the case and, in the event, tell X to pay up.Decency - regrettably an increasingly rare bird - aside, why should X (a company or such immunity-covered persons as ambassadors, federal judges or other high "public servants") miss the given opportunity to save a few bucks - in the given case on the back of a goods and services supplier Y who usually happens to have a relatively shorter breath? Because someone, Z, may owe X a money debt which Z may be interested to settle at a discount. Because Z may see himself as being in a more favorable position than Y to get Y's claim honored by X. And because Z may have aquired from Y, at a discount, said claim which Z now can legally deduct from Z's debt and payment to X.All this is legally feasible because under Swiss law, e.g., the right to effectuate payment by compensationeven for non-admitted counter debts (articles 120 & 422 CO) would turn the table on X. For if X didn't agree with Z's deduction, X would have to take the legal initiative at his own risks and expense, and he would not have a legal remedy to get his claim against Z recognized and enforced - until the competent court would have positively and definitely decided in favor of X. This, in law and in effect, results for Y in an effective legal transfer of his burden of proof which Y thus can unilaterally impose on X - albeit at a cost (i.e. a lesser but prompt payment of his claim against X, reduced by the discount he agreed with Z). All the while, for Z, the discount thus obtained from Y is in effect to cover Z's risk that X may go to court and seek to proof that the claim Z bought from Y isn't due or is otherwise inoperable.
Although this exchange is inspired by the net philosophy of uninterfered
low-cost communications, developing
and maintaining this service involves costs which somehow must be defrayed.
If you need this service, you probably appreciate our concern for not wanting
to promote free-loading practices. As our investment the registration
will be free during the test period; evt. changes will be announced on
this site. We have not made up our mind on which financing method
to choose, and we expect
those who register their claim for publication to indicate their preference
and/or to suggest their own ideas of how to defray these costs.