Corporate bankruptcies in Japan rose 12.4 percent in May from the previous year to 1,528 cases, marking the seventh consecutive monthly rise, a private credit research agency said Wednesday.
The figure exceeded 1,500 for the third straight month, Teikoku Databank said in a report covering failures involving liabilities equal to or greater than 10 million yen.
Liabilities left behind by the companies that failed in May totaled 1.67 trillion yen, up 3.9 percent from a year earlier, after declining for two straight months year-on-year.
The liability total is the largest for the month of May in the postwar era, surpassing the previous record high of 1.61 trillion yen registered in May 1999, it said.
Teikoku said the number of companies filing for court protection has been increasing since April, when a new law was introduced aimed at speeding up court-led corporate rehabilitation.
“Applications under the law will pick up from now on, spurring more bankruptcies,” it said.
A total of 40 companies applied for rehabilitation under the new law in May.
Including applications already filed in April, 110 companies are seeking rehabilitation under the law.
There were two failures by companies listed on the first section of the Tokyo Stock Exchange during the month — consumer credit firm Life Co. and hotel chain operator Dai-Ichi Hotel Ltd.
Failures by listed firms number six so far this year, already surpassing the annual total of five for 1999.
Life’s was the biggest failure this year, with liabilities of 966.3 billion yen, Teikoku said.
Of the total number of failures, 1,135, or 74.3 percent, were caused by recession-related factors such as slack sales and difficulties in collecting accounts receivable.
The number of companies that failed despite receiving loans under the government’s special loan guarantee system came to 328, topping 300 for the third straight month. Such bankruptcies total 3,556 since the data became available in October 1998, Teikoku said.
Bankruptcies stemming from the lending crunch reached 39, the highest this year, and surpassed 30 for the first time in four months, it added.