Copyright 2000 Jiji Press Ltd.
Jiji Press Ticker Service
June
19, 2000, Monday
HEADLINE:
Japan Building Project Goes Bust, Leaving 2nd Biggest Debt
DATELINE:
Tokyo, June 19
Japan Building Project Co. filed for court protection under the corporate revival law, declaring itself effectively bankrupt, Teikoku Data Bank Ltd. said Monday.
The failure of the Tokyo-based property broker left a debt of 560 billion yen, the second largest among this year's failures after the 966.3 billion yen in debt left by consumer finance firm Life Co. in May. It was also the largest ever to be dealt with under the new law.
The realtor, founded in 1969, expanded its business during a period of economic bubble with funding from Long-Term Credit Bank of Japan, Nippon Credit Bank and housing loan lenders.
As the bubble burst and the property market entered a long-term downtrend, the company felt a burden of heavy interest charges, and saw its debts grow quickly past its assets.
After the government put the two ailing banks under temporary state control for reconstruction, the realtor found it almost impossible to raise fresh funds.
The corporate revival law came into effect in April, enabling troubled companies to file for court protection from creditors before their businesses actually fail, so they can start reconstruction at an early stage.