Clifford Chance is adding to its distressed debt capabilities in Tokyo. Gary Hand has joined the firm from Paul, Hastings, Janofsky & Walker and will head the Japanese real estate practice, advising international investment funds in the structuring of acquisitions and financings of hard asset portfolios in Japan, as well as advising on non-performing loans.

"Gary's recruitment will boost not only the distressed debt group, but the ongoing success of our Tokyo team, and the Asian finance and real estate practices in general," says Peter Kilner, finance partner in the firm's Tokyo office. "He will be a valuable addition to our firm."

The firm's track record in this area has been strongest in China, Korea and Taiwan. It advised on a portfolio auction for Huarong, the first of China's four asset management companies to sell distressed debts through the new approval process and advised one of the bidders to the Chaio Tung Bank NPL portfolio in Taiwan.

"We have been extremely busy on distressed debt and NPL work recently and I am delighted to welcome Gary to our group," says Evan Cohen, head of Clifford Chance's Asian distressed debt practice. "I am convinced that his skills and background will be well received by our clients and contribute to the success of the practice."

Opportunities for distressed debt specialists in Tokyo are on the increase as the once-sceptical Japanese come to terms with the buyout model as an efficient means of reviving failed companies. One of the hindrances to effective corporate rescue so far has been the cozy relationship between banks and companies.

More than 60% of Japanese corporate borrowing comes in the form of bank lending, which means that banks are often in the driving seat when it comes to business recovery. But an emphasis on relationships over profitability has slowed down the rehabilitation of the Japanese economy and opened the door to the buyout funds.

In October 2002 the government's financial reform package introduced a regime that accepts for the first time the contribution that the buyout model will have in future and outlined a clear commitment to reduce non-performing loans. The stage is now set for the vultures to repeat the successes they have had in Europe and the US.