Distressed Investment Summit
, Nov. 17, 2009 — During a recent summit on distressed investments in Tokyo, Hideyuki Sakai
, managing partner of Bingham’s Tokyo office, discussed the current trends in restructuring in Japan. In Japan, restructurings are not driven by creditors, as they are in the U.S., but instead an appointed trustee controls what information about the company is made public or given to creditors. Under this arrangement, stakeholders work out an understanding that is then presented to creditors as a “take-it-or-leave-it” proposition. Although creditors are assured of getting their coupons paid, there have been cases where they were forced to take smaller reimbursements. In Japan, there is no precedent as to whether such events constitute a default for holders of credit-default swaps. According to Sakai, some creditors have been able to avoid this by banding together to veto plans forwarded by trustees, which results in liquidation.