Bankruptcy offers real hope to Japanese business

[Taro Toporific]

Bankruptcy law change a boon for businessYomiuri / Oct 2
The new Bankruptcy Law, aimed at simplifying and quickening bankruptcy procedures for companies and individuals, will come into effect on Jan. 1. ...
....The original law was enacted in 1922 and was modeled on Germany's bankruptcy law. In some respects it reflects the European view of bankruptcy as something that should be punished. For example, the law stipulated that bankrupt individuals should be placed on a police watch list...
"With the Bankruptcy Law now more reconstruction-oriented and focused on corporate rehabilitation, and with the liquidation-oriented also better integrated, we've got a legal system comparable to anything in the West," an official at the ministry's Civil Affairs Bureau said.

[Mulboyne]

Well, we just need to see how the courts deal with it. It could be very good news. There is a lot of money ready to pounce if the liquidation process is clarified.

Business Week via Yahoo: Giving Japan A Workout
According to Ernst & Young, so far this year foreign investors have spent $14 billion buying nonperforming Japanese assets, up from $7.3 billion in 2003. "Last year was our biggest year ever in terms of investing in Japan, but right now is the peak," says Chol-Ho Kim, an executive vice-president at GMAC Commercial Mortgage Japan in Tokyo, a branch of U.S. auto manufacturer General Motors Corp. (GM), which has invested more than $1 billion in Japan's nonperforming loans. "The market is gushing with deals," says Kim.
That $14 billion also understates the impact of the gaijin. Considering that the workout firms pay a fraction of face value for these distressed assets, foreigners have acquired debts with a paper value approaching $100 billion in the past two years alone -- a significant portion of Japan's total burden of bad debt.