What measures are taken when an application for corporate rehabilitation proceedings is filed?

When an application to commence corporate rehabilitation proceedings is received, the court first orders the advance payment of the costs necessary for the corporate rehabilitation proceedings and conducts an examination of the representative.

Ordinarily, to prevent the risk that the debtor will run the business recklessly or divert or conceal assets before the decision to commence rehabilitation proceedings, the court decides on a preservative measure over the property.

Accordingly, until the decision to commence corporate rehabilitation proceedings, the debtor may be issued orders such as a prohibition on repayment, a prohibition on disposing of property above a certain amount, a prohibition on borrowing money, and a prohibition on hiring officers and employees.

In addition, the court may suspend individual compulsory execution against the debtor's property, or issue a comprehensive prohibition order that prohibits future compulsory execution against all rehabilitation creditors and rehabilitation security holders.

Finally, an application to commence corporate rehabilitation proceedings may be withdrawn until the decision to commence, and once a preservative measure, a suspension order, or a comprehensive prohibition order has already been issued, withdrawal is possible only with the court's permission.

We recommend that you confirm the detailed matters related to corporate rehabilitation proceedings through a consultation with an attorney.