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2017 (Ju) 761

2017.11.16
2017 (Ju) 761
Minshu Vol. 71, No. 9
Judgment concerning whether the rehabilitation debtor being insolvent at the time of a gratuitous act, or an onerous act that should be deemed to be equal to such an act, or becoming insolvent due to such gratuitous act, etc. is a requirement for exercising the right of avoidance pursuant to Article 127, paragraph (3) of the Civil Rehabilitation Act
Case concerning an object to rehabilitation claim assessment
Judgment of the First Petty Bench, dismissed
Tokyo High Court, Judgment of January 18, 2017
The rehabilitation debtor being insolvent at the time of a gratuitous act, or an onerous act that should be deemed to be equal to such an act, or becoming insolvent due to such gratuitous act, etc. is not a requirement for exercising the right of avoidance pursuant to Article 127, paragraph (3) of the Civil Rehabilitation Act.
Article 127, paragraph (3) of the Civil Rehabilitation Act



Civil Rehabilitation Act

Article 127

(3) Any gratuitous act, or any onerous act that should be deemed to be equal to such an act, conducted by the rehabilitation debtor after or within six months prior to suspension of payments, etc. may be avoided in the interest of the rehabilitation debtor's assets after the commencement of rehabilitation proceedings.
The final appeal is dismissed.

The cost of the final appeal shall be borne by the appellant of final appeal.
Concerning reason 2 for the petition for acceptance of final appeal filed by the counsels for the appeal, MOMOO Shigeaki and INUI Masayuki

1. On August 29, 2014, Yutaka Electric Mfg. Co., Ltd. entered into a joint and several suretyship contract with the appellant regarding a borrowing debt in the amount of 700 million yen owed by Glass One Holdings Co., Ltd. to the appellant (hereinafter referred to as the “Joint and Several Suretyship Contract”). On February 18, 2015, Yutaka Electric Mfg. Co., Ltd. filed a petition for commencement of rehabilitation proceedings, and then received an order for commencement of rehabilitation proceedings.

This case is an action brought by the appellant to oppose and require a change in a decision made in the above-mentioned rehabilitation proceedings in which the amount of a claim for performance of the joint and several suretyship obligation under the Joint and Several Suretyship Contract regarding which the appellant filed proofs of a rehabilitation claim was assessed to be zero yen. An issue of this case is whether the appellee, who is the rehabilitation trustee, can exercise the right of avoidance against the conclusion of the Joint and Several Suretyship Contract pursuant to Article 127, paragraph (3) of the Civil Rehabilitation Act.

2. The counsels for the appeal argue that, as the avoidance of acts stipulated in Article 127, paragraph (3) of the Civil Rehabilitation Act is one type of avoidance of acts prejudicing rehabilitation creditors, the rehabilitation debtor being insolvent at the time of a gratuitous act, or an onerous act that should be deemed to be equal to such an act (hereinafter referred to as a “gratuitous act, etc.”), or becoming insolvent due to a gratuitous act, etc. is a requirement for exercising the right of avoidance pursuant to the same paragraph.

3. The Court examines the argument. Article 127, paragraph (3) of the Civil Rehabilitation Act stipulates that the rehabilitation debtor can avoid any gratuitous act, etc. conducted after or within six months prior to suspension of payments, etc., defining the nature and timing of acts that are subject to the exercise of the right of avoidance pursuant to the same paragraph. In the text of the paragraph, however, there is no hint that the rehabilitation debtor being insolvent at the time of the above-mentioned act or becoming insolvent due to the above-mentioned act is a requirement. It should be construed that, as the acts of the rehabilitation debtor that are subject to the avoidance stipulated in the paragraph are done without compensation and have a highly significant risk of prejudicing the interests of the rehabilitation creditors, the purpose of the paragraph is to allow a special type of avoidance that solely focuses on the nature and timing of acts. Thus, it can hardly be said to be in line with the purpose of the paragraph to require the rehabilitation debtor to be insolvent at the time of an act that is subject to the avoidance or to become insolvent due to the act in addition to the requirements prescribed in the paragraph.

Therefore, it should be construed that the rehabilitation debtor being insolvent at the time of a gratuitous act, etc. or becoming insolvent due to a gratuitous act, etc. is not a requirement for exercising the right of avoidance pursuant to Article 127, paragraph (3) of the Civil Rehabilitation Act.

4. The determination by the court of prior instance that goes with along this conclusion can be affirmed as justifiable. The arguments of the counsels for the appeal cannot be accepted.

Accordingly, the Court unanimously decides as set forth in the main text.
Justice IKEGAMI Masayuki

Justice OTANI Naoto

Justice KOIKE Hiroshi

Justice KIZAWA Katsuyuki

Justice YAMAGUCHI Atsushi
(This translation is provisional and subject to revision.)