Corporate bankruptcies were off 7.4 percent in February for the second straight month of decline on a year-on-year basis, but liabilities left by the failed firms jumped 20.6 percent, Teikoku Databank Ltd. said Friday.

The private credit-research agency said there were 1,586 business failures, with combined liabilities of 1.53 trillion yen, the largest amount for a February since World War II.

The number of bankruptcies shows wild fluctuations with the potential to increase, Teikoku Databank said in a monthly report covering failures involving firms with liabilities of 10 million yen or more each.

Corporate bankruptcies from April 2002 through last month totaled 17,360 cases, with the number expected to top 19,000 for all of fiscal 2002.

The amount of debt swelled following the bankruptcies of Japan Golf Promotion Inc., Japan’s largest golf course operator, with debts of 332.2 billion yen, and the Huis Ten Bosch theme park in Nagasaki Prefecture, with debts of 228.9 billion yen.

One listed firm went bust in February.

Raw silk company Kobe Kiito Co., listed on the first sections of the Tokyo and Osaka stock exchanges, filed for court protection from creditors Feb. 20 under the Corporate Rehabilitation Law.

Recession-induced bankruptcies numbered 1,252, accounting for 78.9 percent of the total. Failures of companies that had been in business for 30 years or more totaled 401, accounting for 25.3 percent of February’s bankruptcies.

Tohato goes under

Confectioner Tohato Inc., with estimated liabilities of 46 billion yen, filed for protection from creditors Friday at the Tokyo District Court, company officials said.

The application was filed under the civil rehabilitation law, which is designed to expedite court-guided corporate revival procedures.

While Tohato’s core food business performed relatively well, it collapsed under the weight of debts accumulated as a result of excessive investments in golf courses during the bubble era a decade ago, industry analysts said.

Tohato, which is unlisted, was established in 1952 and employs 400 people.

It posted sales of 23 billion yen in the business year that ended in March 2002.

Among the firms believed to be interested in rescuing Tohato are toy maker Bandai Co. and trading house Marubeni Corp., industry sources said.

In a time of both misinformation and too much information, quality journalism is more crucial than ever.
By subscribing, you can help us get the story right.