Bankruptcy Act

Without delay after the commencement of bankruptcy proceedings, a bankruptcy trustee must evaluate the value of any and all of the property that belongs to the bankruptcy estate at the time of commencement of bankruptcy proceedings. In this case, the bankruptcy trustee may have the bankrupt attend the evaluation.

When they have completed the evaluation under the provisions of the preceding paragraph, a bankruptcy trustee must immediately prepare an inventory of assets and a balance sheet at the time of commencement of bankruptcy proceedings and submit them to the court.

If the total amount of property that belongs to a bankruptcy estate is less than the amount specified by the Rules of the Supreme Court, , with the permission of the court, a bankruptcy trustee may choose not to prepare and submit the balance sheet referred to in that paragraph, notwithstanding the provisions of the preceding paragraph.

A bankruptcy trustee may request a holder of a right of separate satisfaction to present the collateral subject to the right of separate satisfaction.

When a bankruptcy trustee seeks to evaluate the collateral referred to in the preceding paragraph, the holder of a right of separate satisfaction may not refuse it.

A bankruptcy trustee may, when they find it necessary, have the court clerk, court enforcement officer, or notary put a seal on the property that belongs to a bankruptcy estate or remove the seal.

The court clerk may close books relating to the bankruptcy estate upon the petition of a bankruptcy trustee when they find it necessary.

The court may issue a ruling ordering that the bankrupt deliver the property that belongs to a bankruptcy estate to a bankruptcy trustee upon a petition of the bankruptcy trustee.

The court must interrogate the bankrupt when issuing the ruling referred to in the preceding paragraph.

An immediate appeal may be filed against the order on the petition referred to in paragraph (1).

The ruling referred to in paragraph (1) does not become effective unless it becomes final and binding.

A bankruptcy trustee must submit a written report stating the following particulars to the court without delay after the commencement of bankruptcy proceedings:

the circumstances that have resulted in the commencement of bankruptcy proceedings;

the past and present status of the bankrupt and the bankruptcy estate;

whether there are circumstances that require a provisional order pursuant to the provisions of Article 177, paragraph (1) or officers' liability assessment order prescribed in Article 178, paragraph (1); and

other necessary particulars concerning bankruptcy proceedings.

Beyond what is prescribed in the preceding paragraph, as determined by the court, a bankruptcy trustee must report to the court the status of the administration and disposal of the property that belongs to the bankruptcy estate and any other particulars ordered by the court.

At a meeting for reporting the status of property, a bankruptcy trustee must report the outline of the particulars stated in the items of paragraph (1) of the preceding Article.

A bankruptcy trustee must report the status of the bankruptcy estate to a creditors' meeting as determined by a resolution at a creditors' meeting.

The following acts (excluding acts concerning the provision of security or extinguishment of debt) may be avoided in the interest of the bankruptcy estate after the commencement of bankruptcy proceedings:

an act conducted by the bankrupt with the knowledge that it would prejudice bankruptcy creditors; provided, however, that this does not apply when the person that has benefited from the act did not know at the time of the act that it would prejudice a bankruptcy creditor; or

an act that would prejudice bankruptcy creditors conducted by the bankrupt after the suspension of payments or filing of a petition to commence bankruptcy proceedings (referred to below as "suspension of payments, etc." in this Section) has taken place; provided, however, that this does not apply when the person that has benefited from the act did not know at the time of the act that the suspension of payments, etc. had taken place nor that the act would prejudice a bankruptcy creditor.

With respect to an act concerning the extinguishment of debt conducted by the bankrupt, if the value of the performance received by the creditor exceeds the amount of the debt extinguished by the act, and the act satisfies any of the requirements stated in the items of the preceding paragraph, the act may be avoided in the interest of the bankruptcy estate after the commencement of bankruptcy proceedings only with regard to the part other than the part equivalent to the amount of the extinguished debt.

A gratuitous act or an onerous act that should be deemed to be equivalent to a gratuitous act conducted by the bankrupt after or within six months prior to the suspension of payments, etc. may be avoided in the interest of the bankruptcy estate after the commencement of bankruptcy proceedings.

When the bankrupt has received reasonable consideration from the other party to an act after conducting the act of disposing of property, the act may be avoided in the interest of the bankruptcy estate after the commencement of bankruptcy proceedings, only if it satisfies all of the following requirements:

the act has the actual risk that the bankrupt would conceal, gratuitously convey, or otherwise dispose of the property in a manner prejudicial to bankruptcy creditors (referred to below as "concealing or carrying out other disposal") by realizing real property or otherwise changing the type of property through the disposal;

the bankrupt had the intention of concealing or carrying out other disposal of the money or any other property received as consideration for the act at the time of the act; or

the other party had the knowledge that the bankrupt had the intention of concealing or carrying out other disposal referred to in the preceding item at the time of the act.

For the application of the provisions of the preceding paragraph, if the other party to the act is any of the following persons, at the time of the act the other party is presumed to have known that the bankrupt had the intention of concealing or carrying out other disposal referred to in item (ii) of that paragraph:

if the bankrupt is a corporation, its director, company director, executive officer, inspector, company auditor, liquidator, or any other person equivalent to them;

if the bankrupt is a corporation, a person that falls under any of the persons stated in the following sub-items (a) through (c) in relation to the bankrupt:

a person that holds the majority of voting rights of all shareholders of the stock company that is the bankrupt;

the parent corporation when the majority of voting rights of all shareholders of the stock company that is the bankrupt are held by its subsidiary stock company or jointly by the parent corporation and its subsidiary stock company;

if the bankrupt is a corporation other than a stock company, a person equivalent to the persons stated in sub-item (a) or (b);

the bankrupt's relative or a person living together with the bankrupt.

The following acts (limited to acts concerning the provision of security or extinguishment of debt conducted with regard to an existing debt) may be avoided in the interest of the bankruptcy estate after the commencement of bankruptcy proceedings:

the act conducted by the bankrupt after becoming unable to pay debts or a petition to commence bankruptcy proceedings was filed; provided, however, that this applies only when the creditor had known either of the facts specified in the following sub-item (a) or (b) in accordance with the category stated in sub-item (a) or (b), respectively at the time of the act:

if the act was conducted after the bankrupt had become unable to pay debts:the fact that the bankrupt was unable to pay debts or suspended payments

if the act was conducted after a petition to commence bankruptcy proceedings had been filed:the fact that a petition to commence bankruptcy proceedings was filed; or

an act that is not included in the scope of the bankrupt's obligation or the time of performance of the act, which was conducted within 30 days before the bankrupt became unable to pay debts; provided, however, that this does not apply if the creditor did not know at the time of the act that the act would prejudice other bankruptcy creditors.

For the purpose of application of the provisions of item (i) of the preceding paragraph, in the following cases, the creditor is presumed to have known, at the time of the act stated in that item, the facts specified in the following sub-item (a) or (b) in accordance with the category of the case stated in sub-item (a) or (b), respectively (in the case stated in sub-item (a) of that item, both the fact that the bankrupt was unable to pay debts and the fact that the bankrupt suspended payments):

when the creditor is any of the persons stated in the items of paragraph (2) of the preceding Article; or

when the act stated in item (i) of the preceding paragraph is not included in the scope of the bankrupt's obligation or the means taken or time of performance of the act.

For the application of the provisions of the items of paragraph (1), after suspension of payments took place (limited to suspension that took place within one year prior to the filing of a petition to commence bankruptcy proceedings), the bankrupt is presumed to have been unable to pay debts.