Corporate workout

Corporate workout refers to financial rescue of a firm that is outside formal bankruptcy and insolvency law.^[1] Also known as out-of-court debt restructuring, corporate workout practices aim to remedy or avoid foreclosure and bankruptcy.^[2] The debtors, creditors as well as the main shareholder and bondholders voluntarily participate in the workouts in order to make rearrangements concerning financial investments and rescheduling and restructuring debt. As a way of response to corporate crisis, corporate workout arrangements were widely seen in the aftermath of the Asian financial crisis in 1997.