A group of bondholders, represented by the Ethiopia Ad Hoc Bondholder Committee, has formally begun legal proceedings against the Ethiopian government for defaulting on a $1 billion debt. They sent a pre-action letter to the government, which has 14 days to respond. This lawsuit is unprecedented as it is the first time a country is being sued under the Common Framework, a set of guidelines established by the Group of 20 for debt restructuring during the pandemic. The lawsuit could disrupt Ethiopia's ongoing efforts to restructure $13 billion in external loans, as a court ruling in favor of the bondholders could mandate full repayment, conflicting with agreements made with other creditors. The dispute centers on a proposed value-recovery instrument that would pay bondholders more if Ethiopia's economy outperformed expectations, a proposal that has not been accepted by the official creditor committee co-chaired by China and France. Ethiopia defaulted on its only eurobond in December 2023, joining Chad, Zambia, and Ghana in seeking debt treatment under the Common Framework.