Teikoku Databank to scale down bankruptcy data.
Teikoku Databank Ltd. said Wednesday it will substantially scale down monthly data on corporate bankruptcies as a result of April's effectuation of the personal information protection law.
The new law has made it difficult to gather information on small businesses, the private credit research agency said.
Starting with May data to be released in June, monthly data will not include bankruptcies resulting from voluntary liquidation of companies.
Voluntary liquidation takes place when a company's promissory notes are dishonored twice, prompting a bank to stop doing business with it, or when the representative of a company concludes that it is insolvent.
Large companies are usually subjected to legal liquidation procedures, such as filing for court protection from creditors under the Corporate Rehabilitation Law, when they cannot meet liabilities. Voluntary liquidation often involves small businesses.
According to data released by Teikoku Databank the same day, voluntary liquidation accounted for approximately half of companies that went down with liabilities of more than 10 million yen, in April.
The decision to scale down bankruptcy data will have only limited effects on data about total liabilities because big bankruptcies usually go through legal liquidation procedures, Teikoku Databank said.
The agency began compiling bankruptcy information in 1964.
Meanwhile, Tokyo Shoko Research Ltd., another major credit research company, will continue to release monthly bankruptcy data including voluntary liquidation.
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|Publication:||Japan Weekly Monitor|
|Date:||May 23, 2005|
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