The civil rehabilitation law is a law to support early rebuilding promptly and simply by proceeding bankruptcy procedures when individuals and small and medium enterprises fall into a management crisis. This law was established in December 1999 and came into effect in April 2000. In the management of a company, if the situation of excessive debt continues for a long time or if you send out bad bills many times, you may fall into a situation of company bankruptcy. And the bigger the company, the more the impact of debt to affiliated companies may spread. It is thought that you will go through the bankruptcy of the chain. Therefore, enterprises whose management can not go out can utilize the civil rehabilitation law. There is also a system that allows you to continue the project itself by utilizing this law. When applying for civil rehabilitation law and accepting it, you will have the opportunity to rebuild your business. The Civil Rehabilitation Law can also file a petition for procedures at the stage of bankruptcy, in principle the debtor can retain property management, disposal rights and management rights. In addition, it is characterized by the fact that the execution of save orders is fast and it is possible to prevent the diversification of assets.
Often using M & A to revitalize business
However, when the civil rehabilitation law is applied, it is very difficult to continue the business on its own. For this reason, many of the companies to which the civil rehabilitation law is applied seem to sell the company to other companies, M & A is done to major corporate groups, and there are many places to aim for regeneration under the umbrella of the group. For example, in Japan, major department stores and super chains have been stuck to management after the collapse of the bubble, and there were cases where it was applied by applying for civil rehabilitation law. Major department stores and super chain have dealings with many companies. Therefore it can not be easily crushed. Then, the Industrial Revitalization Organization introduced new management talent into the company and aimed for business revitalization. Sometimes management decisions are made to shut down unprofitable stores for business revitalization.