CHAPTER III COMPOSITION CREDIT AND REPORT THEREOF

Article 42 (Composition Credit)

The property claim against the debtor out of a cause prior to the commencement of composition shall be regarded as composition credit.

Article 43 (Exclusion of Credit with General Priority)

A credit with general priority shall not be regarded as a composition credit.

Article 44 (Rightful Person of Separation)

A person, who may exercise the right of separation in case of bankruptcy, may exercise the right as a composition creditor up to the sum of credit which cannot be satisfied with the exercise of the right.

Article 45 (Claim Posterior to Composition Credit)

(1) Any of the following claims shall not be considered as composition credits:

1. Interest accrued after the commencement of composition;
2. Indemnification and penalty out of default after the commencement of composition;
3. Expenses of the intervention in the composition procedure; or
4. Fine, minor fine, cost of criminal procedure, forfeit and fine for negligence.

(2) The claims under the preceding paragraph shall be posterior to the composition credits.

Article 46 (Composition Credits Amount of Credits Bearing No Interest with Maturity)

If a credit is interest-free and the maturity date comes after the commencement of composition, the sum of the composition credits shall be sum of credits minus the legal interest of the composition credits from the commencement of composition to the maturity date.

Article 47 (Composition Credits Amount of Credits for Money Payable on Installments with Certain Sum)

The provisions of the preceding Article shall apply mutatis mutandis to the credits for money payable in installments with a certain sum and duration; provided, that if the total sum exceeds the principal to be interested equivalent to the money payable in installments with the legal rate of interest, the principal shall be considered as the sum of composition credits.

Article 48 (Sum of Composition Credits of Claim with Unfixed Maturity)

In case of Article 46 the amount appraised at the time of commencement of composition, if the maturity is not fixed, shall be the sum of composition credits.

Article 49 (Application Mutatis Mutandis of Provisions on Credits in Bankruptcy)

Articles 16 through 22 and 201 through 203 of the Bankruptcy Act shall apply mutatis mutandis to the composition credits. In such case, the commencement of composition shall be considered adjudication of bankruptcy.