The number of corporate bankruptcies fell in October from a year earlier for the third straight month, but the amount of liabilities left by failed firms was at the second-highest level for October in the postwar period, credit research agency Teikoku Databank Ltd. said Friday.
The number of bankruptcies decreased 10.7 percent from a year earlier to 1,706, but the combined amount of liabilities reached 1.92 trillion yen, up 79.9 percent from a year before, the agency said.
In analyzing the nation’s bankruptcy trend, it said the number of corporate failures has been showing “wild fluctuations” and there is a possibility of more companies going under in the future.
In fact, 2002 will probably see the second-highest annual bankruptcy record in postwar history, Teikoku said.
The number of bankruptcies from the start of the year to the end of October reached 16,468, up 2.4 percent from the corresponding period in 2001 and the third highest for the first 10 months of any year since the war, it said.
However, fewer firms are going bust because of failure to make payments on promissory transactions, mainly because this method of doing business has decreased due to the ongoing credit crunch in Japan, while the number of firms filing for court protection from creditors is on the rise, it said.
In October, 253 retailers, 213 services-related firms and 86 real estate companies went under.
These industries posted the highest number of firms going bankrupt so far for the year.
Three listed firms went bust: Nisseki House Industry Co., Kotobuki Industry Co. and Foodsnet Corp.
“Recession-induced” bankruptcies totaled 1,293, or more than three-quarters of the total, the agency said. Those firms collapsed due to deepening deflationary effects, including falling sales or an inability to recover loans.
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