Companies Act

The exercise of voting rights by electronic or magnetic means is effected by using electronic or magnetic means to provide the convener with the information that is required to be entered in the voting form no later than the time prescribed by Ministry of Justice Order, with the approval of the convener and pursuant to the provisions of Cabinet Order.

If the agreement claim creditors are the persons who gave consent under Article 549, paragraph (2), the convener may not refuse providing the approval under the preceding paragraph without justifiable grounds.

Voting rights holders who exercised the voting rights by electronic or magnetic means pursuant to the provisions of paragraph (1) are deemed to have been present at the creditors meeting for the purpose of the application of the provisions of Article 554, paragraph (1) and Article 567, paragraph (1).

Agreement claim creditors may exercise the voting rights they hold without maintaining consistency. In these cases, the agreement claim creditors must notify the convener to that effect and of the reason thereof no later than three days prior to the day of the creditors meeting.

If an agreement claim creditor referred to in the preceding paragraph is not a person who holds the agreement claims on behalf of others, the convener may reject the inconsistent exercise of the voting rights held by relevant agreement claim creditor under the provisions of that paragraph.

Creditors meetings or conveners may demand that the following creditors are present at the meeting and hear their opinions. In these cases, a resolution must be passed to that effect at a creditors meeting:

creditors that hold security interest provided for in Article 522, paragraph (2); and

creditors who hold general liens and other claims that have general priority, claims that have arisen in relation to the liquidating stock company for the procedures for special liquidation or rights to seek from the liquidating stock company reimbursement of expense for the procedures for special liquidation.

If a resolution for the postponement or continuation is passed at the creditors meeting, the provisions of Article 548 (excluding paragraph (4)) and Article 549 do not apply.

The convener must prepare minutes with respect to the business of the creditors meeting, pursuant to the provisions of Ministry of Justice Order.

If an order is issued for the commencement of special liquidation, if the liquidators provided for in Article 492, paragraph (1) have completed the investigations of the current status of the property of the liquidating stock companies and have prepared the inventory of property (meaning the inventory of property provided for in that paragraph; hereinafter the same applies in this Article), the liquidating stock company must, without delay, convene the creditors meeting and report to relevant creditors meeting the outcome of the investigations of the status of the operations and assets of the liquidating stock companies as well as the summary of the inventory of property, and state its opinions regarding the policy and prospect of the implementation of the liquidation; provided, however, that this does not apply if the liquidating stock company regards it as appropriate to make the creditors aware of the content of the matters to be reported and relevant opinions by means other than the statement of the report and opinions to the creditors meeting.

A liquidating stock company may offer an agreement to the creditors meeting.

Terms and conditions regarding the change of some or all of the rights of agreement claim creditors (excluding the security interest provided for in Article 522, paragraph (2)) must be provided for in the agreements.

The terms and conditions that change some or all of the rights of agreement claim creditors must prescribe reductions of debts and extensions of terms and other general standards for the change in rights.

Any changes of rights under an agreement must be equal as between Agreement claim creditors; provided, however, that this does not apply if agreement claim creditors that will suffer detriment have given consent, if the equality will not be compromised even if it is otherwise provided with respect to minor agreement claims, or in other cases where the equality will not be compromised even if there are differences as between agreement claim creditors.

If a liquidating stock company regards it as necessary in preparing a draft agreement, it may seek the participation of the following creditors:

creditors that hold security interest provided for in Article 522, paragraph (2); and

creditors that hold general liens and other claims that have general priority.

Notwithstanding the provisions of Article 554, paragraph (1), in order to adopt an agreement at a creditors meeting, all of the following consents must be obtained:

the consent of a majority of the voting rights holders present at the meeting; and

the consent of persons who hold the voting rights in excess of two thirds of the total voting rights of the voting rights holders.

The provisions of Article 554, paragraph (2) apply mutatis mutandis to the application of the provisions of item (i) of the preceding paragraph.

If an agreement is adopted, the liquidating stock company must petition the court for approval of the agreement without delay.

If a petition under the preceding Article is filed, the court hands down the ruling approving the agreement except for the cases under the following paragraph.

The court hands down a ruling rejecting the agreement in cases falling under any of the following:

if the procedures for special liquidation or the agreement violates any provisions of the act, and that deficiency cannot be remedied; provided, however, that this does not apply if, if the procedures for special liquidation violates provisions of the acts, the degree of relevant violation is minor;

if there is no prospect that the agreement will be fulfilled;

if the agreement was established by unlawful means; or

if the agreement is contrary to the general interest of the creditors.

Agreements take effect upon becoming final and binding of the rulings to approve.

An agreement is effective on behalf of the liquidating stock company and all agreement claim creditors, and binds them.

An agreement does not affect security interests provided for in Article 522, paragraph (2) held by creditors provided for in that paragraph, rights that agreement claim creditors hold jointly with guarantors of the liquidating stock company or otherwise with the liquidating stock company, against persons owing obligations, or collateral provided by persons other than the liquidating stock company for the benefit of the agreement claim creditors.

When a ruling approving an agreement becomes final and binding, rights of agreement claim creditors are changed pursuant to the provisions of the agreement.

Notwithstanding the provisions of the preceding paragraph, the effect of a change of rights under the provisions of the agreement as regards a claim in respect of foreign taxes subject to mutual assistance may be asserted only in relation to the mutual assistance under the provisions of Article 11, paragraph (1) of the Act on Special Provisions for Enforcement of Tax Treaties.

The details of an agreement may be changed if it is necessary for the implantation of the agreement. In these cases, the provisions of Article 563 through the preceding Article apply mutatis mutandis.

After the commencement of special liquidation, the court hands down a ruling on the conclusion of the special liquidation in response to petitions by liquidators, company auditors, creditors, shareholders, or investigators in the cases set forth below:

if the special liquidation has been completed; or

if the special liquidation is no longer necessary.

After the commencement of special liquidation, if the court finds, in the cases set forth below, facts on the part of the liquidating stock company that constitute cause for the commencement of bankruptcy proceedings, the court must make ex officio the ruling for commencement of bankruptcy proceedings in accordance with the Bankruptcy Act:

if there is no prospect of an agreement;

if there is no prospect that the agreement will be implemented; or

if reliance on the special liquidation is contrary to the general interest of the creditors.

After the commencement of special liquidation, if the court finds, in the cases set forth below, facts on the part of the liquidating stock company that constitute cause for the commencement of bankruptcy proceedings, the court may make an ex officio ruling for commencement of bankruptcy proceedings in accordance with the Bankruptcy Act:

if an agreement is not adopted; or

if a ruling to reject an agreement has become final and binding.

For the purpose of the application of the provisions of Article 71, paragraph (1), item (iv) and paragraph (2), items (ii) and (iii), Article 72, paragraph (1), item (iv) and paragraph (2), items (ii) and (iii), Article 160 (excluding paragraph (1), item (i)), Article 162 (excluding paragraph (1), item (ii)), Article 163, paragraph (2), Article 164, paragraph (1) (including the cases where that paragraph is applied mutatis mutandis under paragraph (2) of that Article), Article 166, and Article 167, paragraph (2) (including the cases where that paragraph is applied mutatis mutandis under Article 170, paragraph (2)) of the Bankruptcy Act if a ruling to commence bankruptcy proceedings has been made under the provisions of the preceding two paragraphs, the petition for the commencement of bankruptcy proceedings is deemed to have been filed at the time when the petition in each of the following items for the case categories set forth in each of relevant items were filed:

if there was a petition for the commencement of bankruptcy proceedings before the petition for the commencement of special liquidation in bankruptcy proceedings that became ineffective because the order to commence special liquidation becoming final and binding:relevant petition for the commencement of bankruptcy proceedings;

in cases other than the cases set forth in the preceding item:the petition for the commencement of special liquidation.

If a ruling to commence bankruptcy proceedings is handed down under the provisions of paragraph (1) or paragraph (2), claims that have arisen in relation to the liquidating stock company for the proceedings for special liquidation and rights to seek reimbursement of expense regarding the procedures for special liquidation from the liquidating stock company constitute preferred claims against the bankrupt's estate.