In 1983, Peru was in dire economic straights, plighted by social turmoil and guerilla terrorism and saddled with an unmanageable amount of external debt. The nation began a long process of negotiations with creditors, eventually restructuring its debts in 1996. Original loans were swapped for Brady Bonds, tradable bonds issued in the original amount of the loans. 

Around the same time, Elliott Associates, a hedge fund run by Paul Singer and based in New York City that is at the center of the current high-profile Argentina debt dispute, purchased $20.7 million worth of defaulted loans made to Peru for a deeply discounted $11.4 million. Elliott Associates, holding the only portion of Peru's debt remaining outside the restructure, immediately sued the nation and its Banco de la Nacion del Peru in a New York court for the original amount of the loan plus interest. Elliott won a $58 million settlement and made a $47 million profit - a 400% return.

Elliot then filed an injunction to prevent Peru from paying off its restructured debt without also paying Elliott, successfully arguing that Peru had violated the "pari passu" clause, which states that no creditor could be given preferential treatment. Unable to make payments on its debt, Peru once again found itself facing default and was forced to settle with Elliott in order to continue honoring its debts and remain in good international standing. Elliot pioneered this litigate-into-submission strategy that allows these vultures to collect astronomical profits on countries in economic stress, and as seen with Argentina, has managed to continually capitalize on the strategy’s success.