- Restructuring & Insolvency
New Act to Introduce Out-Of-Court Workouts with Majority Vote in Japan
A new law, called the “Early-Stage Business Restructuring Act” (“New Act”), which introduces a new out-of-court workout structure (“New Regime”) in Japan, was passed by Japan’s Congress on June 6, 2025 and is expected to come into effect by December 2026. The New Act enables a debtor company (“Debtor”) to perform an out-of-court restructuring by 75% majority vote (but only by a single class, so it will constitute an in-class cramdown) instead of unanimous consent of the creditors. Japan has several existing out-of-court workout structures, such as the Guidelines for Business Turnarounds of SMEs (“SME Turnaround Guidelines”) and turnaround alternative dispute resolution (“ADR”), which are formal, rules-based out-of-court workouts, but by nature are still purely consensual, negotiation-based workouts. Generally speaking, out-of-court workouts are conducted...To read the full article, please see the PDF file
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Restructuring & Insolvency Newsletter
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Authors
Marie TANAKA
- Counsel
- Tokyo
She mainly practices in insolvency and restructuring, as well as M&A and a wide range of general corporate matters. She has extensive experience in both cross-border (especially, the United States, Europe and Asia) and domestic cases. She has had a distinguished career advising a variety of clients such as debtors, creditors, sponsors, parent companies, and subsidiaries with regard to complex cross-border M&A cases and restructuring cases (including cases where Japanese companies were involved in US Chapter 11 cases). Even in complex or unprecedented cases, she has sought to achieve client objectives by establishing a creative structure or coordinating complex interests between parties. She has also advised clients concerning company dissolutions or liquidations, and dissolving cross-border JV businesses.
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Kotaro has engaged in many restructuring cases through not only formal insolvency proceedings but also out-of-court workouts. From 2019 to 2023, he provided legal advice on cross-border M&A, restructuring/insolvency, disputes, and other corporate matters (with a focus on those related to Singapore, Indonesia, Malaysia, and Philippines) from our Singapore Office by leveraging the knowledge and experience in local legal and commercial practices and the connection with local professionals.