The Tokyo District Court on Friday ordered two Fukuoka subsidiaries of struggling retailer Daiei Inc. to repay 1.38 billion yen in overdue loans to a Cayman Islands investment firm.
The court supported Park Credit Management Co.’s demands that K.K. Fukuoka Dome and K.K. Fukuoka Daiei Real Estate repay the sum.
In charge of both the Fukuoka Dome stadium and the adjacent Sea Hawk Hotel and Resort and commercial complex, the subsidiaries borrowed 1.4 billion yen from the failed Chiyoda Mutual Life Insurance Co. from 1995 to 1997.
Claims on the loans were sold in 2001 to the Cayman firm, after Chiyoda went bust in October 2000. But the Daiei firms repaid only 36 million yen of the total.
The firms had argued that they reached an agreement with some 40 creditors to reschedule repayments, but presiding Judge Mitsuru Sakai dismissed the existence of such an accord, citing the lack of any documentation for such a huge amount of loans.
“The other financial institutions must be refraining from requesting a return just in consideration of business relations” with the Daiei group, Sakai said.