In Japan, any out-of-court workout requires the unanimous consent of all creditors to a restructuring plan. On 4 October 2022, the Japanese government announced that it is considering introducing new out-of-court workout rules. Under the proposed new rules, a restructuring plan will be binding if a majority vote of creditors and confirmation of the court is obtained. Such a majority rule is a common feature amongst schemes of arrangement in many other countries.
As the new rule is anticipated to have a huge impact on the Japanese corporate restructuring practice, we need to keep a cautious and close watch on the upcoming bill to be submitted to the Diet by the government.
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