A group of investors owed money by failed cattle farm Agura Bokujo filed a suit against the government on Friday, seeking around ¥180 million in compensation.
Filing the action with the Utsunomiya District Court in Tochigi Prefecture where Agura was based, the group said the government's inaction contributed to the scale of their losses.
Lawyers for the group said it is made up of 86 people from eastern Japan, including Tochigi, Fukushima and Saitama prefectures, who entered into contracts with Agura in December 2007 or later.
The group alleges the government knew Agura was financially unstable before December 2007 but failed to order an inspection.
Furthermore, the group says, even after an inspection in January 2009 found the farm did not have enough cattle to complete its promised operations or enough money to pay dividends, the government allowed Agura to keep operating until it went bankrupt in August 2011.