2006 Fiscal Year Final Research Report Summary
Legal Issues on Reorganizations of Corporations whose Liabilities are over Assets
| Project/Area Number |
16530054
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| Research Category |
Grant-in-Aid for Scientific Research (C)
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| Allocation Type | Single-year Grants |
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| Section | 一般 |
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| Research Field |
Civil law
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| Research Institution | Nagoya University |
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Principal Investigator |
NAKAHIGASHI Masafumi Nagoya University, Graduate School of Law, Professor, 大学院法学研究科, 教授 (00237372)
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| Project Period (FY) |
2004 – 2006
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| Keywords | Insolvency / Reorganization / Mergers and Acquisitions / Canada Law |
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| Research Abstract |
It has been discussed whether a corporation whose amount of liabilities are over the amount of assets can be a party of reorganization enabled by the Corporate Act in Japan, e.g., merge, share exchange, corporate divestiture. The arguments tend to be too theoretical so far. This research pursues more sophisticated and practical arguments, considering the necessity of such reorganizations in the practical world.
The result is that there are no reasons to prohibit such kind of reorganization, if stakeholders would be protected properly. This way of thinking is founded in Canada as well. It should be permitted to consider synergies the reorganizations would bring to the party corporations. Especially, in corporate divestiture, even insolvency corporations can launch such transactions if no creditors would be worse off.
As a fruit of this research, I have already published several articles to insist the above analysis, and I am ready to publish another couple of articles in the near future.
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