Fukushima resort developer files for protection with court

Kyodo

Bandai Resort Kaihatsu, a developer of resort facilities in a mountainous area in Fukushima Prefecture, sought court protection from creditors Wednesday at the Tokyo District Court.

The company, which developed the Alts Bandai ski resort featuring hotels and a golf course, asked the court to grant it protection under the fast-track Civil Rehabilitation Law.

The developer is capitalized at 1.2 billion yen and has a combined debt estimated at 95 billion yen.

After its inauguration in 1987, East Japan Railway Co. (JR East) and other concerns stepped in to help boost Bandai Resort Kaihatsu’s capital. Later, the developer and the Bandai town government jointly established Bandai Shimizudaira Kaihatsu to oversee the administration of its resort facilities.

Bandai put up 56 percent of the corporate administrator’s capital and the remainder was put up by the developer. The administrator was dubbed a “third-sector entity” due to capital participation by both public and private sector entities.

But the burst of the asset-inflated bubble economy in the early 1990s forced various corporate capital contributors to put an end to their financial involvement in the project, drawing the curtain on plans to expand the resort facilities.

Sales of golf course memberships also weren’t up to par, adding to the developer’s solvency woes.

In a related development, Sumitomo Trust & Banking Co. said its 79.5 billion yen in outstanding loans to the developer may become irrecoverable, or at the very least repayment may be delayed. , as a result of the invocation of the Civil Rehabilitation Law.

The bank said the developer’s court action will not force it to downwardly revise its projections for first-half and full-year financial results for 2002, pointing out that it had already put up an adequate amount of loan-loss reserves.

Meanwhile, Fukushima Bank said its outstanding loans of 288 million yen to the developer may become irrecoverable.

Fukushima Bank said the court action will not force it to revise its projections for interim results for 2002, as the claims are fully covered by loan-loss reserves and the collateral put up by the developer.