Bankruptcies in October drop for 22nd straight month.

TOKYO, Nov. 15 Kyodo

The number of corporate bankruptcies in Japan fell 23.3 percent in October from a year earlier to 1,064, dropping for the 22nd month in a row, a private-sector corporate credit research agency said Monday.

Combined debts left by failed companies decreased 20.0 percent to 680.4 billion yen, Teikoku Databank said in its monthly report on failures with debts of 10 million yen or more.

The agency attributed the falling bankruptcies to the government-backed credit guarantee systems for small and midsize enterprises, and corporate revival programs under the Industrial Revitalization Corp. of Japan.

However, it cautioned that bankruptcies are not declining because of an autonomous recovery of businesses, adding it is necessary to keep tabs on such negative factors as a slowdown in the U.S. and Chinese economies, the higher yen, and soaring crude oil and materials prices.

The number of failures in which companies were forced to discontinue business under court-supervised proceedings came to 421, making up the second-highest level ever of 39.6 percent of the October bankruptcies.

In other bankruptcy cases, companies are allowed to continue operations in procedures involving debt waivers and cutting the workforce.

The number of companies that went into bankruptcy voluntarily came to 594, down 26.7 percent, marking the first decline below 600 since January 1991.

No listed companies went bankrupt in the month for the first time in nine months.

By industry, declines in the number of bankruptcies in the construction and wholesale industries stood out, with respective falls of 22.8 percent to 321 cases and 23.0 percent to 164 cases.

Of the October total, 792 companies, or 74.4 percent, collapsed due to recession-linked factors, including poor sales and an inability to pay off bank loans.

Failures of companies that have been in business for 30 years or longer numbered 287, accounting for 27.0 percent of the total.