Insight

A Globalized Sprint: How Japan’s Insolvency Practice Is Expanding and Preparing for the Future

Emerging legal trends are a relished opportunity for reorganization, while natural disasters present an opportunity for innovation.

Interview with Nishimura & Asahi Law Firm
Best Lawyers

Best Lawyers

August 8, 2019 12:00 AM

For Hajime Ueno of Nishimura & Asahi—Japan’s 2020 “Law Firm of the Year” winner for Insolvency and Reorganization Law—the demands of a more globalized world are changing the nature of their practice and pushing the firm’s reach beyond Japan’s borders. In an interview with Best Lawyers CEO Phillip Greer, Ueno discusses working with the government after the devastating earthquake; the international demands transforming Japan’s business standards and insolvency practice; how the firm is undertaking niche practice areas; and their plans for a more successful future.

How do you see insolvency and reorganization law evolving in Japan in the coming years? Do you see any changes, improvements, or trends? Where do you see it evolving?

Hajime Ueno: Well, firstly I think the number of cases for insolvency will most likely, if not definitely, go up. It will increase this year or by the end of this year, and most likely sometime around the Olympics in Tokyo. With that as a preface, I think the practice in Japan is really stable and actually very speedy, perhaps contradictory to your perception.

Having said that, there is room for improvement. We are actually sensing judges in bankruptcy courts in Japan develop a sense of urgency to try and accommodate creditors from abroad or sponsors investing from abroad. Hopefully, we will see more judges with a globalized sense of the ways in which they handle cases, which should be a good way to welcome foreign investors. That's one way that Japan's practice could evolve.

Another is probably the obvious one: the technology. At least on the practitioner's side, we see changes coming in the sense that we will probably be adopting AI-related systems or solutions to accelerate certain matters, such as the claim analysis process, what the steps are, how we treat the creditors, and so forth.

Can you tell me about a landmark case from the last couple of years that your firm is especially proud of?

We have a number of cases that we take pride in, including cases relating to Toshiba, Takata, Sharp, Skymark Airlines as well as Japan Airlines, but we cannot discuss our practice without referring to TEPCO, the Tokyo Electricity Power Company, which faced financial difficulty following the Fukushima nuclear plant disaster more than eight years ago.

The company was a triple-A company. At one point, it was rated higher than the government itself, so the company was really a stable, blue-chip stock company, so to speak. But with the Fukushima disaster, overnight, literally overnight, it went into financial difficulty because no one was able to predict or accurately assess how much of the damage claims TEPCO would need to honor or be responsible for.

Although the banks did immediately provide the company with emergency loans and such, we still needed to find a way to keep the company alive. There were arguments that we could let TEPCO go bankrupt and either completely restructure it or liquidate it, in the sense that it did not manage the disaster in a proper way, and so on. Ultimately, the decision came down to the need to sustain the company in order to prioritize restitutions being made in a timely manner to the victims of the disaster, which we didn’t think liquidation would provide.

The firm’s other strength is that we are not shy about engaging in new practice areas. For example, crisis management was not a practice area for attorneys in Japan, but our firm was the first to enter that arena, and now it’s one of our largest practice areas.

We had to be creative. “We” meaning not just our firm but also the government. We actually needed to be creative to reorganize and sustain the company; normal insolvency protections didn’t allow us to pay the victims of the disaster in a timely manner, so we had to come up with a new regime to help the company pay damages to the victims, while seeking ways to financially sustain the company despite the significantly sized liabilities.

So, we adopted a new statute to provide a safety net to nuclear power companies. It allows nuclear power companies to “borrow” from a government fund, but it’s technically not a loan. Instead, companies borrow from the government to pay the victims, and then take, with government supervision, reorganization or restructuring steps, before eventually paying back the government.

It will be a long process, but TEPCO has gradually become more stable and is seeking ways to become competitive in the market again in recent years.

Are there any important policy changes locally or abroad that are going to impact insolvency or reorganization law? Anything in the pipelines you think will change up the practice?

We are cautiously monitoring the impact that the trade war between the U.S. and China would have on the Japanese economy, or the corporate world, in a way that could force some Japanese companies to seek insolvency protection as well. It might be kind of like a butterfly effect, from your view, but there are many difficulties arising from the trade war between the U.S. and China.

How does your firm, and specifically this practice, stay agile against its competitors?

Well, one thing is that we have a very good or maybe even ideal, mix of generations among attorneys within our group. There are, obviously, other notable or really respected insolvency practitioners in Japan, and we really respect them. But, they don’t necessarily have the younger generations of attorneys within their practices. We have younger generations of attorneys, practitioners who are becoming leaders of their generations.

We are also one of the few, very few, firms that really are trying to become a global insolvency group, in the sense that we are really trying to be upfront and up to speed on what is happening in the insolvency and reorganization landscape outside of Japan.

Is there anything else that you haven't mentioned for this practice area or for other groups of the firm, that you're particularly proud of, that you'd like to say?

Japan is, unfortunately, a shrinking economy because Japan’s population is declining. So, Japanese companies will need to go outside Japan’s borders. Japan’s insolvency practice will expand in the global arena to the point that every single insolvency case involving Japan or Japanese companies will have cross-border components maybe five years from now. We are keenly aware of the need to stay up to speed with what is happening outside of Japan, and we want recognition outside of Japan, too. That’s been one of our main areas of focus.

Other than that, the firm’s other strength is that we are not shy about engaging in new practice areas. For example, crisis management was not a practice area for attorneys in Japan, but our firm was the first to enter that arena, and now it’s one of our largest practice areas. Other firms are trying to catch up, too.

Another example is our close relationship with the government on World Trade Organization (WTO)-related work. Because our work here is for the government, it doesn’t allow us to make big profits and the like, but we still handle quite a lot of WTO-related cases. Our close work with the government has helped attract other private clients.

Overall, our firm’s readiness to engage in new, sometimes niche, areas of law that have the potential of growing and expanding, has been one of our great strengths.

Related Articles

Solving Insolvency


by Best Lawyers

Markus Fellner discusses emerging trends in insolvency and reorganization law and the work his firm has done with the visually impaired.

An Interview With Fellner Wratzfeld & Partner

An Interview With Norton Rose Fulbright


by Best Lawyers

Australia’s 2020 “Law Firm of the Year” in Insolvency and Reorganization Law

An Interview With Norton Rose Fulbright

A Consumer's Guide to Business Litigation: Protecting Your Rights and Interests


by Best Lawyers

Business litigation is not limited only to organizations. It’s a potentially useful option for consumers as well. Learn more about business litigation below.

Three animated businessmen review a contract on top of a magnifying glass

Return the Favor When Bidding


by Denys Myrgorodskiy

Denys Myrgorodskiy, the managing partner of Dynasty Law Firm, looks at the process of withdrawing insolvent banks from the market in Ukraine and its potential consequences.

New Bank Fraud Laws in Ukraine

How PLMJ's Unique Structure Shapes Its Insolvency Practice


by Best Lawyers

A leading attorney with the 2019 "Law Firm of the Year" winner for Insolvency and Reorganization Law in Portugal speaks to Best Lawyers CEO Phillip Greer.

PLMJ "Law Firm of the Year" Interview

An Interview With Eberhard Braun of Schultze & Braun


by Best Lawyers

The 2019 "Law Firm of the Year" winning firm was recognized in Germany for Restructuring and Insolvency Law.

Eberhard Braun Interview

Well-Managed Insolvencies Usually Make a Difference


by Gelu Maravela, Mirela Metea, and Dana Rădulescu

From both a legal and business perspective, the critical period in any insolvency proceeding is the observation period, which is the period between the opening of the insolvency and the approval and implementation of a reorganization plan.

Well-Managed Insolvencies

Is Your Contractual Partner Insolvent or under Criminal Investigation?


by Violeta Saranciuc and Cosmin Vasile

This is how it may affect your ongoing dispute.

Contractual Partner

Trending Articles

2025 Best Lawyers Awards Announced: Honoring Outstanding Legal Professionals Across the U.S.


by Jennifer Verta

Introducing the 31st edition of The Best Lawyers in America and the fifth edition of Best Lawyers: Ones to Watch in America.

Digital map of the United States illuminated by numerous bright lights

Unveiling the 2025 Best Lawyers Awards Canada: Celebrating Legal Excellence


by Jennifer Verta

Presenting the 19th edition of The Best Lawyers in Canada and the 4th edition of Best Lawyers: Ones to Watch in Canada.

Digital map of Canadathis on illuminated by numerous bright lights

Legal Distinction on Display: 15th Edition of The Best Lawyers in France™


by Best Lawyers

The industry’s best lawyers and firms working in France are revealed in the newly released, comprehensive the 15th Edition of The Best Lawyers in France™.

French flag in front of country's outline

Presenting the 2025 Best Lawyers Editions in Chile, Colombia, Peru and Puerto Rico


by Jennifer Verta

Celebrating top legal professionals in South America and the Caribbean.

Flags of Puerto Rico, Chile, Colombia, and Peru, representing countries featured in the Best Lawyers

Unveiling the 2025 Best Lawyers Editions in Brazil, Mexico, Portugal and South Africa


by Jennifer Verta

Best Lawyers celebrates the finest in law, reaffirming its commitment to the global legal community.

Flags of Brazil, Mexico, Portugal and South Africa, representing Best Lawyers countries

Announcing the 13th Edition of Best Lawyers Rankings in the United Kingdom


by Best Lawyers

Best Lawyers is proud to announce the newest edition of legal rankings in the United Kingdom, marking the 13th consecutive edition of awards in the country.

British flag in front of country's outline

Prop 36 California 2024: California’s Path to Stricter Sentencing and Criminal Justice Reform


by Jennifer Verta

Explore how Prop 36 could shape California's sentencing laws and justice reform.

Illustrated Hands Breaking Chains Against a Bright Red Background

Announcing the 16th Edition of the Best Lawyers in Germany Rankings


by Best Lawyers

Best Lawyers announces the 16th edition of The Best Lawyers in Germany™, featuring a unique set of rankings that highlights Germany's top legal talent.

German flag in front of country's outline

Celebrating Excellence in Law: 11th Edition of Best Lawyers in Italy™


by Best Lawyers

Best Lawyers announces the 11th edition of The Best Lawyers in Italy™, which features an elite list of awards showcasing Italy's current legal talent.

Italian flag in front of country's outline

Tampa Appeals Court ‘Sends Clear Message,” Ensuring School Tax Referendum Stays on Ballot


by Gregory Sirico

Hillsborough County's tax referendum is back on the 2024 ballot, promising $177 million for schools and empowering residents to decide the future of education.

Graduation cap in air surrounded by pencils and money

Find the Best Lawyers for Your Needs


by Jennifer Verta

Discover how Best Lawyers simplifies the attorney search process.

A focused woman with dark hair wearing a green top and beige blazer, working on a tablet in a dimly

Key Developments and Trends in U.S. Commercial Litigation


by Justin Smulison

Whether it's multibillion-dollar water cleanliness verdicts or college athletes vying for the right to compensation, the state of litigation remains strong.

Basketball sits in front of stacks of money

Woman on a Mission


by Rebecca Blackwell

Baker Botts partner and intellectual property chair Christa Brown-Sanford discusses how she juggles work, personal life, being a mentor and leadership duties.

Woman in green dress crossing her arms and posing for headshot

Best Lawyers Celebrates Women in the Law: Ninth Edition


by Alliccia Odeyemi

Released in both print and digital form, Best Lawyers Ninth Edition of Women in the Law features stories of inspiring leadership and timely legal issues.

Lawyer in green dress stands with hands on table and cityscape in background

The Human Cost


by Justin Smulison

2 new EU laws aim to reshape global business by enforcing ethical supply chains, focusing on human rights and sustainability

Worker wearing hat stands in field carrying equipemtn

Beyond the Billables


by Michele M. Jochner

In a recently conducted, comprehensive study, data reveals a plethora of hidden realities that parents working full-time in the legal industry face every day.

Women in business attire pushing stroller takes a phone call