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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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