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The number of corporate bankruptcies fell 3.1 percent in July from a year earlier to 1,567, the first fall in four months, a private research institute said Tuesday.

The amount of liabilities left behind dropped 82.5 percent to 747.02 billion yen for the third consecutive monthly fall, remaining below 1 trillion yen for the second straight month but still the sixth largest for the month since the end of World War II, Teikoku Databank said.

The data cover bankruptcies with liabilities of 10 million yen or more.

The sharp fall in liabilities reflects the impact that the failure of department store chain operator Sogo Co. and its affiliates in July 2000 had on that year’s figures. In that month, overall liabilities were more than 4 trillion yen, Teikoku Databank said.

Recession-induced failures — those caused by poor sales and exports and growing nonperforming assets — totaled 1,223 cases, or 78 percent, topping 1,000 cases for the sixth consecutive month and matching the record high posted in November.

The number of venture firms going under rose by nine to 11 for the second straight monthly increase, a record high for any month this year. According to Teikoku Databank, this reflects investor caution about such startup firms following the burst of the information technology bubble.

The number of employees at the failed firms in July came to 14,916, exceeding 10,000 for the 19th consecutive month, it said.

The initiative taken by Prime Minister Junichiro Koizumi to promote the disposal of bad loans held by banks will inevitably lead to an increase in bankruptcies. The institute also said corporate earnings for the fiscal first half to Sept. 30 are expected to shed light on deteriorated earnings performances at major banks and thereby cast a shadow over the business outlook of major retailers and general contractors.

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