(a) If a corporate debtor is in financial difficulty, is there an attitude of 'concealment' or 'denial' toward the admission or exposure of that financial difficulty?

Yes.

(b) If so, is the reason for this based on cultural or other factors?

Corporate debtors fear further financial difficulty which will arise when they admits it and creditors withdraw credits given to the debtors.

(c) Is it likely that a corporate debtor would:

(i) volunteer the fact of its financial difficulty to a lender or group of lenders; or

(ii) admit or concede it only if and when confronted by a lender or group of lenders?

Corporate debtors may volunteer the fact of its financial difficulty to its main bank.

(d) If a corporate debtor is in financial difficulty, is it likely that the corporate debtor would:

(i) do nothing;

(ii) seek expert assistance and advice; or

(iii) accept the appointment by a lender of an outside expert/advisor?

If a corporate debtor is in severe financial difficulty, it is likely that the corporate debtor would seek expert assistance and advice.

(e) If it was agreed between a lender and a corporate debtor that an expert/advisor would be appointed, is it likely that a corporate debtor would give the expert/advisor unrestricted access to all relevant financial and other information regarding the corporate debtor?

Yes.

(f) In that situation, is it likely that the financial and other information regarding the corporate borrower would be:

(i) complete; and

(ii) accurate (particularly regarding the valuation of assets and the assessment of liabilities)?

It largely depends on the management of the debtor company. Generally speaking, yes.

(a) Is it more common that the financial difficulty of a corporate borrower will be:

(i) volunteered by a corporate debtor; or

(ii) discovered by a lender (and, if so, how)?

is applicable. With respect to domestic transactions, the clearance system of promissory notes, bill of exchanges and checks is very relevant in this point. If non-clearance of promissory notes and etc. occur twice within 6 months, such a company is disqualified for issue of such instruments. This clearly means insolvency of the company. So if a company fails to clear one time, banks will become careful in dealing with such a company and may withdraw their credit from such a company. Under this situation, a corporate borrower tends to volunteer its financial difficulty to its main bank to request for financial supports before it fails to clear its promissory difficulty to its main bank to request for financial supports before it fails to clear its promissory notes and etc.

(b) If a lender becomes aware that a corporate debtor is in financial difficulty, is it likely that the lender would seek to investigate the financial crisis of the corporate debtor itself and employ an expert/advisor to investigate the financial position?

If such a lender is a main bank, yes.

(c) If so, is the expert/advisor likely to be:

(i) an independent professional; or

(ii) an 'in-house' employee of the lender?

is applicable.

(d) Is it likely that information regarding the financial position of a corporate borrower as discovered from the work of an expert/advisor would be:

(i) kept secret from other lender/s or creditors;

(ii) disclosed to other/selected lenders?

The disclosed information would be kept secret from other creditors unless the lender ask them to cooperate to help the corporate debtor.

(e) If there were 2 or more lenders (not in a syndicate) involved with the same corporate borrower, is it likely that they would:

(i) join together to share information and endeavour to work out a common approach to the financial problems of the corporate borrower; or

is applicable.

(ii) act secretly and independently of one another?

(f) If there was a group of lenders (whether in a syndicate or not) involved with the same corporate borrower, is it likely that one of them would offer or seek to be the leader on behalf of them all?

Yes.

(g) If so, is it likely that such a proposal would be agreed to by the other lenders?

Yes.

(h) Is it likely that local lenders would have employees who are experienced in informal work outs?

Yes.

(i) If there was foreign bank lending involved, is it likely that domestic lenders would:

(i) combine with; or

(ii) act independently of the foreign lender/s?

If foreign banks' exposure is significant, (i) is applicable.

(j) Is it likely that 'junior' or 'minor' lenders might seek to trade their debt?

Yes. But it may be difficult to find an appropriate transferee.