The number of "third sector" bankruptcies has reached 17 this year, surpassing the annual record of eight set the previous year, a private credit research agency said Monday.
The liabilities of the 17 firms -- entities established jointly by local governments and private firms -- total a record 369.3 billion yen and are up from 204.9 billion yen the previous year, Teikoku Databank said.
The 17 companies include 12 in the leisure and resort facilities market, which experienced a boom in during the asset-inflated bubble of the late 1980s.
The steep increase in liabilities was caused by the failure of Phoenix Resort Co., which went belly up with debts of 276.2 billion yen in February.
Third-sector failures will continue because many of the companies have lax business plans, Teikoku Databank said.
Eight of the 17 companies applied for court protection from creditors under the fast-track corporate rehabilitation law, which took effect in April last year. Phoenix, operator of the giant Seagaia resort complex in Miyazaki Prefecture, is trying to rehabilitate itself under the conventional corporate rehabilitation law.
Fuji Seiko shuts doors
Fuji Seiko Co., a Tokyo company that sells and installs vault doors, applied to the Tokyo District Court for voluntary bankruptcy on Monday, a private credit research institute said.
The company, which is not tied to super-hard tool maker Fuji Seiko Ltd. listed on the Second Section of the Nagoya Stock Exchange, went down with liabilities of some 40 billion yen, Tokyo Shoko Research said.
Because financial institutions have been shutting down and combining operations in recent years, Fuji Seiko saw its sales fall to 14.5 billion yen in the year through September 2000 from a peak of 20.4 billion yen in the business year that ended in September 1993.
A loss of around 20 billion yen from financial derivatives trading was another reason the company filed for voluntary bankruptcy.