Japan's Business Revitalization ADR: An Economic Savior or a Convenient Excuse to Avoid Bankruptcy?

Authors

Naoko Okamoto, Benjamin N. Cardozo School of Law

Abstract

This Note analyzes Japan's newly enacted "Business Revitalization Alternative Dispute Resolution" (ADR) and its effectiveness in revitalizing the Japanese economy. Due to ADR's economic and procedural ease, Business Revitalization ADR has been employed by companies undergoing revitalization processes and negotiating with creditors in extending debt payments. Nonetheless, ADR proceedings, specifically mediation between creditors and debtors, create only short-term economic value. Because of cultural characteristics of mediation and the nature of mediation in the business context in Japan, Business Revitalization ADR may be subject to abuse by companies that should have gone bankrupt. In fact, many companies may save themselves from going under by using this ADR system without having made the necessary fundamental changes to their flawed business operations. As a result, real damage to the Japanese economy may follow, not immediately, but years later when companies need to engage in another repayment extension.

Disciplines

Bankruptcy Law | Comparative and Foreign Law | Dispute Resolution and Arbitration | Law

Recommended Citation

Naoko Okamoto, Japan's Business Revitalization ADR: An Economic Savior or a Convenient Excuse to Avoid Bankruptcy?, 12 Cardozo J. Conflict Resol. 637 (2011).
Available at: https://larc.cardozo.yu.edu/cjcr/vol12/iss2/15