Bankruptcy Act

If a petition to commence bankruptcy proceedings is filed under special circumstances, and when the court finds that there is a risk that it would be impossible to achieve the purpose of the bankruptcy proceedings satisfactorily only by issuing a suspension order pursuant to the provisions of paragraph (1), item (i) or (vi) of the preceding Article, upon the petition of an interested person or by its own authority, the court may issue an order prohibiting all creditors from enforcement, etc. against a debtor's property, and a collection of national tax delinquency (including a disposition to be made by a procedure for making a disposal of national tax delinquency, and excluding a request for distribution; the same applies below), until an order is made on the petition to commence bankruptcy proceedings; but this applies only if the court issues a provisional order in advance or simultaneously under the provisions of Article 28, paragraph (1) or order for temporary administration prescribed in Article 91, paragraph (2) with respect to the debtor's principal property.

Upon issuing a stay order under the provisions of the preceding paragraph (referred to below as a "comprehensive stay order"), the court may exclude a certain range of enforcement, etc. or procedures for collection of national tax delinquency from the subject to the comprehensive stay order when it finds it appropriate to do so.

If a comprehensive stay order is issued, the procedure for enforcement, etc. and disposal of foreign tax delinquency which have already been initiated against the debtor's assets (limited to the procedures or disposals that are to be prohibited by the comprehensive stay order) are suspended until an order is made on the petition to commence bankruptcy proceedings.

The court may change or reverse a comprehensive stay order.

If an order for temporary administration prescribed in Article 91, paragraph (2) is issued, the court may order reversal of the procedure for enforcement, etc. or disposal of foreign tax delinquency which has been suspended pursuant to the provisions of paragraph (3) upon the petition of a temporary administrator, while requiring security to be provided when it finds it particularly necessary to do so for the administration and disposal of the debtor's property.

An immediate appeal may be filed against a comprehensive stay order, an order made under the provisions of paragraph (4) and a reversal order issued under the provisions of the preceding paragraph.

The immediate appeal stated in the preceding paragraph does not have the effect of stay of enforcement.

When a comprehensive stay order is issued, the prescription is not completed with regard to a bankruptcy claim, etc. (limited to a claim for which enforcement, etc. or procedure for collection of national tax delinquency is prohibited by the comprehensive stay order) until the day on which two months have elapsed from the next day on which the comprehensive stay order ceases to be effective.

The court may issue an order to cancel a comprehensive stay order only for that creditor upon the petition of the creditor, when it finds the comprehensive stay order is likely to cause undue damage to the creditor who filed the petition for enforcement, etc. after issuing the comprehensive stay order. In this case, the creditor may have enforcement, etc. against the debtor's property, and any procedures for enforcement, etc. initiated by the creditor before the issuance of the comprehensive stay order that have been suspended under the provisions of Article 25, paragraph (3) resume their process.

The provisions of the preceding paragraph apply mutatis mutandis if the court finds that a comprehensive stay order is likely to cause undue damage to a person that conducts a disposition to collect national tax arrears.

For the purpose of applying the provisions of Article 25, paragraph (8) to a person that obtains a cancellation order under the provisions of paragraph (1) (including cases as applied mutatis mutandis pursuant to the preceding paragraph; the same applies in the following paragraph and paragraph (6)), the phrase "the day on which the comprehensive stay order ceases to be effective" in Article 25, paragraph (8) is deemed to be replaced with "the day on which a cancellation order under the provisions of Article 27, paragraph (1) (including cases as applied mutatis mutandis pursuant to paragraph (2) of the Article) is issued".

An immediate appeal may be filed against a judicial decision on the petition stated in paragraph (1).

The immediate appeal stated in the preceding paragraph does not have the effect of a stay of enforcement.

If a petition to commence bankruptcy proceedings is filed, upon the petition of an interested person or by their own authority, the court may issue a provisional order that prohibits a disposal of the debtor's assets or any other necessary provisional order concerning the assets until a decision is made on the petition to commence bankruptcy proceedings.

The court may change or reverse a provisional order issued under the provisions of the preceding paragraph.

An immediate appeal may be filed against a provisional order issued under the provisions of paragraph (1) and an order issued under the provisions of the preceding paragraph.

The immediate appeal stated in the preceding paragraph does not have the effect of a stay of enforcement.

Pursuant to the provisions of paragraph (1), if the court has issued a provisional order prohibiting a debtor from making payments to a creditor or conducting any other act with the creditor to extinguish the debtor's debt, the creditor may not assert the effect of the payment or any other act to extinguish the debt, which is made or conducted in violation of the provisional order in relation to the bankruptcy proceedings; provided, however, that this applies only if the creditor knows the fact that the provisional order was issued at the time of the act.

A person that has filed a petition to commence bankruptcy proceedings may withdraw the petition only before an order commencing bankruptcy proceedings is made. In this case, after a suspension order under the provisions of Article 24, paragraph (1), comprehensive stay order, provisional order under the provisions of paragraph (1) of the preceding Article, order for temporary administration prescribed in Article 91, paragraph (2) or provisional order under the provisions of Article 171, paragraph (1) is issued, a permission of the court is required.

If a petition to commence bankruptcy proceedings is filed and the court finds a fact constituting the grounds for the commencement of bankruptcy proceedings, it issues an order commencing bankruptcy proceedings, except in the cases listed in the following items:

when expenses for bankruptcy proceedings are not prepaid (excluding cases in which temporary payment of the expenses is made from the national treasury pursuant to the provisions of the first sentence of Article 23, paragraph (1)); or

if the petition to commence bankruptcy proceedings is filed for an unjust purpose or it is not filed in good faith.

The order issued under the preceding paragraph becomes effective from the time when it is issued.

The court must appoint one or more bankruptcy trustees and specify the following particulars upon issuing an order commencing bankruptcy proceedings:

the period during which a proof of a bankruptcy claim should be filed;

the date of a creditors' meeting that is to be convoked to report the status of the debtor's property (referred to as a "meeting for reporting the status of property" in paragraph (4), Article 136, paragraphs (2) and (3) and Article 158); and

the period for conducting an investigation of bankruptcy claims (or the date for conducting an investigation of bankruptcy claims in the case referred to in Article 116, paragraph (2)).

Notwithstanding the provisions of item (i) and item (iii) of the preceding paragraph, the court may choose not to specify the period stated in item (i) of that paragraph and the period and date stated in item (iii) of that paragraph when it finds that the bankruptcy estate is likely to be insufficient for paying expenses for bankruptcy proceedings.

In the case referred to in the preceding paragraph, if it finds that the bankruptcy estate is no longer insufficient for paying expenses for bankruptcy proceedings, the court must promptly specify the period stated in paragraph (1), item (i) and the period or date stated in item (iii) of that paragraph.

Notwithstanding the provisions of paragraph (1), item (ii), if it finds it inappropriate to convoke a meeting for reporting the status of property while taking into consideration the number of known bankruptcy creditors and any other relevant circumstances, the court may choose not to specify the date stated in paragraph (1), item (ii).

In the case referred to in paragraph (1), if there are 1,000 or more known bankruptcy creditors and it is found appropriate, the court may issue an order not to give a notice to bankruptcy creditors under the provisions of paragraph (3), item (i) of the following Article, as applied mutatis mutandis pursuant to the main clauses of paragraph (4) and paragraph (5) of that Article, and the provisions of the main clause of Article 33, paragraph (3) and the main clause of Article 139, paragraph (3) (in the case referred to in the main clause of Article 139, paragraph (3), creditors with voting rights prescribed in the main clause of Article 139, paragraph (3); the same applies in paragraph (2) of the following Article), and not to summon, on the date of a creditors' meeting, bankruptcy creditors that filed a proof of a bankruptcy claim pursuant to the provisions of Article 111, Article 112 or Article 114 (referred to below as "holders of filed bankruptcy claims").