The formal court-led corporate restructurings for reorganization are a civil rehabilitation and a corporate reorganisation. The Civil Rehabilitation Act and the Corporate Reorganisation Act respectively set out the procedures for commencement of the proceedings, rehabilitation/reorganisation plan, judicial management and liquidation.
There is no segregated bankruptcy court in Japan although some district courts in major prefectures have a specialised division. The Court of First Instance hears applications in relation to both the Civil Rehabilitation Act and the Corporate Reorganisation Act and also petitions for winding-up under the Companies Act and the Bankruptcy Act.
A creditor is entitled to apply for civil rehabilitation proceedings against a company if grounds for the commencement of bankruptcy proceedings exist.
Any creditor who holds a claim that, in value, is equivalent to 10 per cent or more of the capital of a company and any shareholder who has 10 per cent or more of a company’s voting rights is entitled to apply for corporate reorganisation proceedings if grounds for commencement of bankruptcy proceedings exist.