Restructuring in Asia has often been branded as band-aid reconstruction simply because of the seemingly less painful adjustments experienced by the Malaysian corporate and banking sectors. Critics are skeptical whether there has been any real restructuring when there is no pain suffered by investors and shareholders. This paper addresses concerns about the depth of corporate restructuring. Specially, it examines the issues of market stability–efficiency tradeoff, moral hazard, transparency and the impact of restructuring on resource allocation and the debt burden distribution. The arguments demonstrate how these concerns are mitigated through the CDRC (Corporate Debt Restructuring Committee) process. The paper also highlights the key challenges that must be addressed as a necessary follow-up to crisis management. As the economy rebounds and problems subside, there is a danger that the urgency to implement the necessary reforms to address structural shortcomings will no longer be a priority. These challenges include improvement of the insolvency system and strengthening the existing institutional framework by establishing a set of broad reforms including effective regulatory oversight.