Bankruptcy Act

When the court finds it necessary in order to secure a right of avoidance during the period after a petition to commence bankruptcy proceedings is filed until ruling on the petition is made, upon the petition of an interested person (or a temporary administrator if any temporary administrator is appointed) or by its own authority, the court may issue an order of provisional seizure, a provisional disposition, or any other necessary provisional order.

The provisional order under the provisions of the preceding paragraph may be issued with or without requiring the provision of security.

The court may change or reverse a provisional order under the provisions of paragraph (1) upon petition or by its own authority.

An immediate appeal may be filed against a provisional order under the provisions of paragraph (1) and a judicial decision on the petition referred to in the preceding paragraph.

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

The provisions of the preceding paragraphs apply mutatis mutandis when an immediate appeal referred to in Article 33, paragraph (1) is filed against an order dismissing a petition to commence bankruptcy proceedings.

When a provisional order under the provisions of paragraph (1) of the preceding Article (including as applied mutatis mutandis pursuant to paragraph (7) of that Article) is issued, if an order commencing bankruptcy proceedings is made, a bankruptcy trustee may continue the procedures for the provisional order.

If a bankruptcy trustee does not continue the procedures for the provisional order referred to in the preceding paragraph pursuant to the provisions of that paragraph within one month after an order commencing bankruptcy proceedings is made, the provisional order ceases to be effective.

When a bankruptcy trustee seeks to continue the procedures for the provisional order referred to in paragraph (1) pursuant to the provisions of that paragraph, if the whole or part of the security prescribed in paragraph (2) of the preceding Article (including as applied mutatis mutandis pursuant to paragraph (7) of that Article) does not belong to the bankruptcy estate, the bankruptcy trustee must substitute the whole or part of the security with another security by way of property that belongs to the bankruptcy estate.

The provisions of Article 18, and Chapter II, Section 4 (excluding Article 37, paragraphs (5) through (7)) and Section 5 of the Civil Provisional Remedies Act (Act No. 91 of 1989) apply mutatis mutandis to a provisional order issued for the proceedings to be continued by a bankruptcy trustee pursuant to the provisions of paragraph (1).

A right of avoidance is exercised by a bankruptcy trustee by filing an action, making a request for avoidance, or filing a defense.

The action and case of request for avoidance referred to in the preceding paragraph are subject to the jurisdiction of the bankruptcy court.

When making a request for avoidance, the requester must make a prima facie showing of the fact constituting the grounds for avoidance.

A judicial decision to uphold a request for avoidance or dismiss the request must be made by an order with its reason.

The court must interrogate the other party or any subsequent acquirer when making an order referred to in the preceding paragraph.

The proceedings for a request for avoidance are closed upon the closing of bankruptcy proceedings.

A person that is dissatisfied with an order to uphold a request for avoidance may file an action to oppose the order within an inalterable period of one month after the day on which the order is served.

The action referred to in the preceding paragraph is subject to the jurisdiction of the bankruptcy court.

A judgment rendered with regard to the action referred to in paragraph (1) approves, changes, or reverses the order referred to in that paragraph, except when the action is dismissed as unlawful.

When a judgment to approve an order stated in paragraph (1) becomes final and binding, the order has the same effect as a final and binding judgment. The same applies if the action referred to in the paragraph is not filed within the period prescribed in that paragraph or is dismissed without prejudice.

With regard to a judgment to approve or change the order referred to in paragraph (1), the court in charge of the case may declare a provisional execution as provided for by Article 259, paragraph (1) of the Code of Civil Procedure.

The court proceedings of the action referred to in paragraph (1) are concluded upon the closing of bankruptcy proceedings, notwithstanding the provisions of Article 44, paragraph (4).

A right of avoidance may not be exercised if two years have elapsed since the date of commencement of bankruptcy proceedings. The same applies when 10 years have elapsed since the date of the act to be avoided.

When an order commencing bankruptcy proceedings is made against a debtor that is a corporation, the court may issue a provisional order on the property of the corporation's director, company director, executive officer, inspector, company auditor, liquidator, or any other person equivalent to them (referred to below as "officer" in this Section), when it finds it necessary to do so upon the petition of a bankruptcy trustee or by its own authority with regard to a claim for damages based on the liabilities of , these officers.

When the court finds that there is an urgent need even during the period after a petition to commence bankruptcy proceedings is filed until an order on the petition is made, the court may issue a provisional order under the provisions of the preceding paragraph upon the petition of a debtor (or a temporary administrator if any temporary administrator is appointed) or by its own authority.

The court may change or reverse a provisional order under the provisions of the preceding two paragraphs.

An immediate appeal may be filed against a provisional order under the provisions of paragraph (1) or (2) or an order under the provisions of the preceding paragraph.

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

The provisions of paragraph (2) through the preceding paragraph apply mutatis mutandis if an immediate appeal referred to in Article 33, paragraph (1) is filed against an order dismissing a petition to commence bankruptcy proceedings.

When an order commencing bankruptcy proceedings is made against a debtor that is a corporation, the court may reach an assessment decision on the rights to seek damages pursuant to the liability of the officers (referred to below as "officers' liability assessment order" in this Section) upon the petition of a bankruptcy trustee or by its own authority by an order when it finds it necessary to do so,.

When filing the petition referred to in the preceding paragraph, the petitioner must make a prima facie showing of the fact constituting the grounds for the liability.

When the court commences proceedings for officers' liability assessment order by its own authority, it must issue an order to that effect.

When the petition referred to in paragraph (1) is filed or the order referred to in the preceding paragraph is issued, for the purpose of postponement of expiry of prescription and renewal of prescription, it is deemed that demand by litigation has been made.

The proceedings for officers' liability assessment order is closed upon the closing of bankruptcy proceedings (excluding cases in which an officers' liability assessment order has been already issued at the time of the closing of bankruptcy proceedings).

An officers' liability assessment order and an order dismissing the petition referred to in paragraph (1) of the preceding Article must state reasons for them.

The court must interrogate the officers in question when making a judicial decision prescribed in the preceding paragraph.

A person that is dissatisfied with an officers' liability assessment order may file an action to oppose the order within an inalterable period of one month after the day on which the person received the service of the order.

The action referred to in the preceding paragraph is subject to the jurisdiction of the bankruptcy court.

For the action stated in paragraph (1), a bankruptcy trustee must stand as a defendant if it is filed by an officer, and an officer must stand as a defendant if it is filed by a bankruptcy trustee.

A judgment rendered with regard to the action referred to in paragraph (1) approves, changes or reverses the officers' liability assessment order, except when the action is dismissed as unlawful.

A judgment that approves or changes an officers' liability assessment order has the same effect as a judgment to order performance in the case of enforcement.

With regard to a judgment that approves or changes an officers' liability assessment order, the court in charge of the case may, as provided for by Article 259, paragraph (1) of the Code of Civil Procedure, declare provisional execution.

If an action referred to in paragraph (1) of the preceding Article is not filed within the period referred to in that paragraph or is dismissed, the officers' liability assessment order has the same effect as the final and binding judgment to order performance.

The provisions of Article 663 of the Companies Act apply mutatis mutandis when an order commencing bankruptcy proceedings is issued against a debtor that is a corporation. In this case, the term "relevant liquidating membership company" in that Article is deemed to be replaced with "bankruptcy trustee".

When a silent partnership agreement terminates by reason that the proprietor has received an order commencing bankruptcy proceedings, a bankruptcy trustee may have the silent partner pay contributions up to the amount of loss to be borne by them.