Japanese methods of corporate re-habilitation - a comparison

Japanese methods of corporate re-habilitation – a comparison

January 24, 2010  |  Corporate Recovery
Diagram of minjisasei process

A diagram of the minjisaisei process with a happy outcome

Given that at the time of writing JAL is commencing the largest corporate rehabilitation in Japan it looks like a good opportunity to look at the process for tax purposes.

The Japanese legal framework includes three different process for corporate rehabilitation that can be tax preferred these being minjisaisei – 民事再生, kaishyakousei – 会社更生  and rehabilitation under [RCC].  It it important to understand how the differences between these methods can impact M&A or other transactions, with the main difference between that creditors to whom kaisyakousei are corporate creditors whose objective is the maintenance and rehabilitation of the company concerned.  In contrast the minjisaisei process has no such limitation and the objective is the preservation of the business or economic activity of the creditors concerned.  The table below compares minjisaisei – 民事再生- and kaishyakousei – 会社更生.

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