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12 Int'l Insolvency Rev. 1 (2003)

handle is hein.journals/intvcy12 and id is 1 raw text is: Restructuring in Japan Shinjiro Takagi * Professorof Law, Dok/yo Universiy, Tokyo, Japan I. Three Reorganization Schemes There are three available schemes in Japan to reorganize distressed business cor- porations with excessive debts. They are; 1) an out of court workout in accordance with the Guidelines for the Workout which was established in 2001, referring to INSOL 8 Principles; 2), a civil rehabilitation proceeding under the Civil Rehabilita- tion Law which was enacted in 1999 abolishing the former Composition Law of 1927 and; 3) a corporate reorganization proceeding under the Corporation Reorga- nization Law which was enacted in 1951 and was the subject of major reform in December 2002. Also a Law Relating to Recognition and Assistance for Foreign Insolvency Proceedings was enacted in 2000 adopting many provisions included in the UNCITRAL Model Law on Cross Border Insolvency and thus effectively abolishing notorious terriotorialism. Still, reformation of bankruptcy laws is on the way and expected to be completed before the end of next year of 2003. As reor- ganization proceedings were expedited and streamlined by the enactments of the Civil Rehabilitation Law and Corporate Reorganization Reform Law, the remain- ing portion to be reformed in bankruptcy laws may include non-procedural matters including avoidance powers, rejection and assumption of executory contracts, prior- ity for wages and sovereign debts, subordination of insiders' rights and so on. Along with the law reforms, practices to deal with bankruptcy and reorganiza- tion cases are changing dramatically, led by the Tokyo and Osaka District Courts. Almost all courts in Japan are opening their gates wider to reorganization cases and the cases are being handled more expeditiously. *Shinjiro Takagi is the Professor of Law, Dokkyo University. He was admitted to the Japanese bar in 1963. After being in private practice for 25 years, he was appointed as a Judge of the Tokyo District Court. In 1995 he became the President and Chief Judge of Yamagata District & Family Court and in 1997 was appointed President and Chief Judge of Niigata Dis- trict Court. From 1998, he was the Presiding Judge of the Tokyo High Court (Court of Appeal). He retired the judgeship in 2000. After resuming private practice, he successfully reorganized several big corporations in- cluding Kyo-ei Life Insurance which was the world's largest ever bankruptcy filing. He was also the chair- person of the Committee for Guidelines of Multi- Creditors Out of Court Workout organized by the Japanese Bankers Association, Federation of Eco- nomic Organizations and other organization in 2001. In 2001, he was also appointed chairperson of the Advisory Committee regarding Reformation of Cor- porate Reorganization Law and other laws for the Ministry of Economy, Trade and Industry. He has written numerous books and articles regarding Japa- nese and American bankruptcy laws and civil proce- dures. He earned doctor of law degree in 2002. Copyright 0 2003 John Wiley & Sons, Ltd. Int. Insolv. Rev., Vol. 12:1 10 (2003) Published online in Wiley InterScience www.interscience.wiley.com). DOI: 10.1002/iir.106

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