Spurred by a string of soured deals and growing confidence in the legal process for creditors in Asia, funds are increasingly going after companies that haven't met financial obligations and pushing for a legal solution - such as liquidation.

One recent example is China Taizinai, a Chinese yogurt drinks maker now in liquidation which has a long line of creditors starting with UK-based private equity firm Actis. Other deals include China Sun Bio-Chem Technology Group Company, a Chinese corn starch producer also in liquidation, and Bio-Treat Technology, a Chinese wastewater treatment company that defaulted on its repayment of US$206m in convertible bonds. Convertible bondholders, including Morley Fund Management, Merrill Lynch and Citigroup, ended up taking a steep haircut.