Japan Bankruptcy Debt Sets Record
Monday, October 16th 2000, 12:00 am
By: News On 6
TOKYO (AP) â€” The liabilities left behind by corporate bankruptcies in Japan climbed 48 percent to a postwar high of 10.9 trillion yen ($100.9 billion) in the first half of this fiscal year, a research agency said Monday.
The debt surpassed the previous high of 9.19 trillion yen ($85 billion) in the second half of fiscal 1997.
Bankruptcies in the first half of fiscal 2000, which began April 1, rose 19.6 percent over the same period last year to 9,473 cases, the seventh-highest figure since World War II, the private Teikoku Databank said.
The surge was powered by the failure of 21 companies with liabilities of 100 billion yen ($9.3 billion) or more, including consumer credit company Life Co. and department store chain Sogo Co.
In September alone, bankruptcies rose 9.5 percent from the same month a year earlier month to 1,502 cases, marking the 11th straight month of increases. Debts left behind increased 17.6 percent to 774.2 billion yen ($7.17 billion), the agency said.
The data showed that Japan's weak economy continues to take a toll on the nation's businesses.
Of the first-half bankruptcies, 7,124 â€” or 75.2 percent â€” were caused by recession-related factors, such as slack sales and difficulties in collecting money owed.
Teikoku said things were not expected to improve, forecasting a total of more than 19,000 bankruptcies in the 2000 calendar year, matching the number in 1998, which was the second-worst year in the postwar era.
``The fear is increasing that from October to the end of the year, many companies will be hit by a further worsening in business conditions and will have trouble raising funds,'' Teikoku said.
The outlook does not look bright for liabilities either: Chiyoda Mutual Life Insurance Co. filed for protection from creditors in October. The insurer held 2.9 trillion yen ($26.9 billion) in debt, Teikoku noted.