For purposes of this paper these terms will be defined as follows. A liquidation is a formal court administered sale of most or all of the assets usually in piecemeal fashion. At the end of the process, third parties would become owners of the assets. A rescue is a formal court administered rehabilitation, reorganization or restructuring in an attempt to preserve the concern as an on going income producing entity. The debtors remain in possession of the assets.
Creditors accept either a reduction or rescheduling of debts.
By way of contrast, both the United States and Western European countries have laws that allow both liquidation and rescue. United States is considered to be slightly more favorable to rescue than European systems. This is only a matter of degree and definition. For example, France favors complete liquidation but in the form of a sale of the business as an entity. As a general rule, work outs are the norm throughout Asia.