NO&T Japan Legal Update
I. Restructuring Practices in Japan
As with restructuring in many other jurisdictions, it is common practice in Japan to elect a sponsor to provide finance to a failing business to assist with its rehabilitation. In many insolvency cases, the election of a sponsor is essential for a successful restructuring.
If a debtor must eventually commence an in-court restructuring procedure, the fairness and appropriateness of the election of the sponsor will be examined by the court. Questions surrounding the election of a sponsor may arise in the following common scenarios when: