Bankruptcy Act

A bankruptcy creditor may receive a distribution from the bankruptcy estate as provided for by this Chapter.

A bankruptcy creditor must receive a distribution at the place where a bankruptcy trustee performs their duties; provided, however, that this does not preclude other provisions to be made by an agreement between a bankruptcy trustee and a bankruptcy creditor.

Distributions are to be made in the following order among bankruptcy claims and in the order of priority prescribed in Article 98, paragraph (2) among preferred bankruptcy claims referred to in item (i):

preferred bankruptcy claims;

bankruptcy claims other than those stated in the preceding item, the following item, and item (iv);

subordinate bankruptcy claims; and

consensually-subordinated bankruptcy claims.

With regard to bankruptcy claims eligible for distribution with the same priority, distribution is made in proportion to the amount of each claim.

After the ordinary period for investigation has expired or the ordinary date of investigation has ended and after realization has been completed for property that belongs to the bankruptcy estate, a bankruptcy trustee must make a distribution without delay under the provisions of this Section (referred to below as a "final distribution" in this Chapter and the following Chapter) to holders of filed bankruptcy claims except in the case prescribed in Article 217, paragraph (1).

A bankruptcy trustee must obtain permission of the court clerk in order to make a final distribution.

The court may set the time for making a final distribution in advance after hearing opinions of a bankruptcy trustee.

A bankruptcy trustee must prepare a distribution list stating the following particulars and submit it to the court without delay when permission under the provisions of paragraph (2) of the preceding Article is granted:

the name and address of a bankruptcy creditor that may participate in the procedure for a final distribution;

the amount of claim that may enter into the procedure for a final distribution; and

the amount available for a final distribution.

The particulars stated in item (ii) of the preceding paragraph must be stated by distinguishing each of preferred bankruptcy claims, subordinate bankruptcy claims, and consensually-subordinated bankruptcy claims from other bankruptcy claims, and with regard to preferred bankruptcy claims, the particulars must be stated in the order of priority prescribed in Article 98, paragraph (2).

With regard to bankruptcy claims secured by a revolving mortgage which pertains to a right of separate satisfaction, a bankruptcy trustee must state the claims in the distribution list even if the bankruptcy creditor that holds the bankruptcy claims does not prove to the bankruptcy trustee the amount of the claims for which payment cannot be received by exercising the revolving mortgage. In this case, the part of the amount of the bankruptcy claims on the day on which permission under the provisions of paragraph (2) of the preceding Article was granted, which exceeds the maximum amount, is to be the amount of the claims that may enter into the procedure for a final distribution.

The provisions of the preceding paragraph apply mutatis mutandis to a person that holds a mortgage prescribed in Article 108, paragraph (2) (limited to one that is a revolving mortgage).

Without delay after submitting a distribution list to the court pursuant to the provisions of paragraph (1) of the preceding Article, a bankruptcy trustee must give a public notice of the total amount of the claims that may enter into the procedure for a final distribution and the amount available for a final distribution, or give a notice of those particulars to holders of the filed bankruptcy claims.

The notice under the provisions of the preceding paragraph is deemed to have arrived at the time when the notice should have normally arrived.

When the time at which the notice given under the provisions of paragraph (1) should have normally reached each holder of the filed bankruptcy claims has passed, a bankruptcy trustee must notify the court to that effect without delay.

In order to participate in the procedure for a final distribution with regard to a denied or disputed bankruptcy claim (excluding those prescribed in Article 129, paragraph (1)) within two weeks from the day on which the public notice under the provisions of paragraph (1) of the preceding Article becomes effective or the day on which the notification is made under the provisions of paragraph (3) of that Article, the bankruptcy creditor that holds the denied or disputed bankruptcy claim must prove to a bankruptcy trustee the fact that the proceedings for assessment based on a petition for the finalization of the denied or disputed bankruptcy claim, the court proceedings of an action to oppose bankruptcy claim assessment, or the court proceedings of an action taken over pursuant to the provisions of Article 127, paragraph (1) are pending.

In order to participate in the procedure for a final distribution with regard to a bankruptcy claim that is a claim subject to a condition precedent or claim which may arise in the future, the bankruptcy claim is required to become enforceable within the period prescribed in the preceding paragraph (referred to below as the "period of exclusion concerning a final distribution" in this Section and Section 5).

In order to participate in the procedure for a final distribution, within the period of exclusion concerning a final distribution, a holder of a right of separate satisfaction must prove to a bankruptcy trustee the fact that the whole or part of the claim secured by a security interest prescribed in Article 65, paragraph (2) which pertains to the right of separate satisfaction is no longer secured after the commencement of bankruptcy proceedings, or prove the amount of the claim for which payment cannot be received by exercising the security interest, except in the case referred to in the following paragraph.

With regard to bankruptcy claims secured by a revolving mortgage that are stated in the distribution list pursuant to the provisions of the first sentence of Article 196, paragraph (3) (including as applied mutatis mutandis pursuant to paragraph (4) of that Article), except when the amount of the claims for which payment cannot be received by exercising the security interest is proven within the period of exclusion concerning a final distribution, the part of the amount of the claims that may enter into the procedure for a final distribution stated in the distribution list under the provisions of the second sentence of paragraph (3) of that Article (including as applied mutatis mutandis pursuant to paragraph (4) of that Article) is deemed to be the amount of claims for which payment cannot be received.

The provisions of paragraph (3) apply mutatis mutandis to a holder of a quasi-right of separate satisfaction.

In the following cases, a bankruptcy trustee must immediately correct the distribution list:

when the particular prescribed in paragraph (1) of the preceding Article is proved within the period of exclusion concerning a final distribution; and

when the particular prescribed in paragraph (3) of the preceding Article is proved within the period of exclusion concerning a final distribution.

The provisions of item (iii) of the preceding paragraph apply mutatis mutandis to a holder of a quasi-right of separate satisfaction.

A bankruptcy creditor that is dissatisfied with an entry in the distribution list may raise an objection to the court only within one week after the period of exclusion concerning a final distribution expires.

The court must order a bankruptcy trustee to correct the distribution list when it finds an objection raised under the provisions of the preceding paragraph well-grounded.