Article 10Foreclosure of enterprise mortgage is under the exclusive jurisdiction of the district court having jurisdiction over the location of the head office of the company.

Article 11Foreclosure of enterprise mortgage is effected by a petition of an enterprise mortgage holder.

Article 12A judicial decision with regard to the procedure for the foreclosure of an enterprise mortgage may be made without oral argument.

Article 13(1)Unless otherwise provided, a public notice made pursuant to the provisions of this chapter will be published in the Official Gazette and one or more newspapers specified by the court.

(2)The public notice under the preceding paragraph becomes effective on the date following its last appearance in print.

Article 14Interested parties in the foreclosure procedure mean the following persons:

Article 15In response to the petition by interested parties or ex officio, a court may have a trustee make a report on the property of a company, or the status of its management or realization.

Article 16Interested parties may make a request to a court clerk for the inspection or copy of the documents related to the foreclosure procedure.

Article 17(1)Except as otherwise provided for, the provisions of Part I through Part IV of the Code of Civil Procedure (Act No. 109 of 1996) applies mutatis mutandis to the foreclosure procedure, unless contrary to the nature thereof.

(2)The provisions of Article 10 through 12, Article 14 through 16, Article 18, Article 38, Article 42 and Article 183 in the Civil Execution Act (Act No. 4 of 1979) applies mutatis mutandis to the foreclosure procedure.

Article 18In addition to what is provided for in this Act, the necessary matters concerning the foreclosure procedure related to registration shall be specified by Cabinet Order and other matters concerning the foreclosure procedure shall be specified by the Supreme Court.

Article 19(1)The commencement of the foreclosure procedure is done by an order.

(2)An appeal against a disposition of execution may be filed against a judicial decision on a petition for foreclosure.

Article 20(1)In order to commence the foreclosure procedure, the court shall declare that the entire property of the company must be seized for the enterprise mortgage holder, concurrently with an order to commence the foreclosure procedure.

(2)The seizure becomes effective through the service of the order to a company.

Article 21A court must appoint a trustee concurrently with an order to commence the foreclosure procedure.

Article 22(1)A court must immediately give public notice of the following matters upon issuing an order to commence the procedure for the foreclosure:

(2)When the trustee or its indication is changed, the court must give public notice to that effect without delay.

(3)A person who has neglected to give the notification of paragraph (1), item (iii) must compensate for damages resulting therefrom to the company.

Article 23(1)When an order to commence the foreclosure procedure is issued, a trustee must file an application for registration of commencement of the foreclosure procedure and registration of the trustee to a registry office having jurisdiction over the location of the head office of a company without delay.

(2)The provisions of the preceding paragraph applies mutatis mutandis to registration of replacement of trustees or change of its indication in the case where the trustee or its indication was changed.

Article 24When an order to commence the foreclosure procedure is issued, a trustee must file an application for registrations of commencement of the foreclosure procedure without delay with regard to matters which can be registered in the property of a company.

Article 25Registration and license tax is not imposed on the registrations under the preceding two articles.

Article 26When an order to commence the foreclosure procedure is issued, a trustee must notify a debtor of a company without delay that claims of the company to the debtor were seized; provided, however, that this does not apply to a debtor who notified a trustee that the debtor assumes obligations.

Article 27(1)Seizure under Article 20 may not be asserted against a third party without knowledge until after the public notice under Article 22, paragraph (1) and the registration of commencement of the foreclosure procedure under Article 23, paragraph (1). Even after the public notice and the registration, the same applies to the case where the third party do not know seizure with justifiable reason.

(2)Even if a right on the property of a company is acquired without the company performing juridical acts after the public notice and the registration of the preceding paragraph, the effect of the acquisition may not be asserted in relation to the foreclosure procedure.

Article 28When an order to commence the foreclosure procedure is issued, enforcement, provisional seizure, provisional disposition based on claims or security right, or auction procedures for foreclosure of security right, or disposition of delinquency under the National Tax Collection Act (Act No. 147 of 1959), or disposition of delinquency governed by the same rules as the national tax collection, or property disclosure procedure which have been already initiated against the property of a company cease to be effective in relation to the foreclosure procedure.

Article 29(1)When an order to commence the foreclosure procedure is issued, the court may not issue another order to commence the foreclosure procedure.

(2)When another petition for foreclosure is filed after an order to commence the foreclosure procedure was issued, the petition is to have the effect of a demand for distribution by attaching the petition to a document related to the foreclosure procedure, and when creditors who received the order of commencement withdraws the petition for foreclosure or the order to commence the foreclosure procedure is revoked, an order to commence the foreclosure procedure is deemed to be issued as of that time.

(3)When an order to commence the foreclosure procedure is deemed to be issued by the latter petition for foreclosure pursuant to the preceding paragraph, the previous trustee shall continue to be a trustee in the subsequent procedures.

Article 30(1)A trustee shall be appointed by a court. In this case, the court must hear opinions of the petitioner.

(2)A trust company (meaning a person who obtained the license set forth in Article 3 or Article 53, paragraph (1) of the Trust Business Act (Act No. 154 of 2004)), a bank, or any other judicial person may become a trustee.

(3)When it is necessary to perform its duties, the trustee may use an assistant.

Article 31The court may dismiss a trustee in response to a petition by interested parties or ex officio. In this case, the court must hear opinions of the petitioner and interrogate the trustee.

Article 31-2(1)a trustee, if necessary, may appoint one or more trustee representatives on its own responsibility in order to have them perform its duties.

(2)Permission of a court must be obtained for appointment of trustee representatives of the preceding paragraph.

Article 32(1)When an order to commence the foreclosure procedure is issued, a trustee shall manage the entire property of the company in order to secure it.

(2)A trustee may sell goods and securities the company has.

(3)A trustee may directly collect claims the company has.

Article 33A director, executive officer and auditor of the company must give a necessary explanation about the property of the company upon the request of a trustee.

Article 34A trustee must make an inventory of assets for the entire property of the company and submit its transcript to a court as specified by the Supreme Court.

Article 35(1)A trustee may appropriate company monies as payment for expenses and remuneration.

(2)A petitioner must temporarily pay expenses and remuneration upon a request of a trustee.

Article 36(1)The provisions of Article 76, Article 80, Article 85, Article 87, paragraph (1) and Article 90, paragraph (1) of the Bankruptcy Act (Act No. 75 of 2004) shall apply mutatis mutandis to a trustee, the provisions of Article 79 and Article 155 of that Act shall apply mutatis mutandis to management of the property of a company, and the provision of Article 87, paragraph (1) of that Act applies mutatis mutandis to a trustee representative. In this case, "they may perform their duties severally or the duties" in Article 76, paragraph (1) of that Act is deemed to be replaced with "its duties", "bankruptcy trustee" in Article 79 and Article 155 of that Act is deemed to be replaced with "trustee", "bankruptcy estate" in Article 79 and Article 80 of that Act is deemed to be replaced with "property of stock company", and "bankrupt" in Article 90, paragraph (1) of that Act is deemed to be replaced with "stock company".

(2)An appeal against a disposition of execution may be filed against an order under Article 87, paragraph (1) of the Bankruptcy Act which applies mutatis mutandis in the preceding paragraph.

Article 37(1)Realization of the entire property of the company (excluding monies; hereinafter the same applies in this Section) is conducted by package auction or sale by private contract.

(2)Package auction is made by selling the entire property of the company in a package by means of auction sale or bidding.

(3)Sale by private contract is made by selling the entire property of the company in a package or separately by appropriate means.

Article 38(1)In the case of package auction, a trustee must have an appraiser evaluate the entire property of the company and the subject property of a special security right.

(2)In evaluating the entire property of the company, an appraiser must evaluate it as one body.

Article 39An evaluated price of the entire property of the company under the preceding Article shall be a minimum auction price.

Article 40A trustee is to specify the date for auction and a court is to specify the date for successful bid.

Article 41A trustee must give public notice of the date for auction, whether by auction or by bidding, the date for successful bid and matters specified by the Supreme Court.

Article 42(1)The date for auction must be after the 14th day since the public notice given under the preceding Article.

(2)A trustee conducts the proceedings on the date for auction.

(3)A trustee must prepare a record of the auction on the date for auction.

Article 43(1)The date for successful bid may not be after the date on which 14 days have passed from the date for auction.

(2)A court conducts the proceedings on the date for successful bid.

Article 44(1)The entire property of the company is transferred to a successful bidder when the bid price is paid.

(2)In the case referred to in the preceding paragraph, the successful bidder succeeds the status as to permission, approval, license and any other dispositions made by administrative agencies for the company's business operation; provided, however, that the succession is subject to any other laws and regulations prohibiting or restricting the same.

Article 45(1)A trustee conducts a private sale subject to court approval.; provided, however, that it is limited to cases where a petition is filed by enterprise mortgage holders, creditors having a special security right, or a company, and the trustee obtains the consent of all of the enterprise mortgage holders, and as to the property subjected to the special security right, the consent of the creditors thereof is obtained.

(2)When a petition for approval referenced in the preceding paragraph is filed, the court may have an appraiser evaluate a sales price.

(3)When it is possible to repay the claims of enterprise mortgage holders and the creditors holding priority claims with sales proceeds of a part of the entire property of the company after withholding the executing cost, other property may not be sold.

Article 46The property subject to a special security right must be sold separately.

Article 47Sale without the approval under Article 45, paragraph (1) is void; provided, however, that this may not be asserted against a purchaser without knowledge or a subsequent acquirer.

Article 48When registered securities are sold, a trustee may carry out acts necessary for entry of a name change.

Article 49(1)When nominative claims are sold, a trustee must notify the debtors to that effect.

(2)When the notification referenced in the preceding paragraph is given, the successful bidder or purchaser may assert acquisition of nominative claims against a third party such as debtors.

Article 50The provisions of Article 59, Article 60, paragraph (2), Article 63, Article 65 through Article 68, Article 69 through Article 71, Article 72, paragraph (1) and (2), Article 74 through Article 76, Article 78 and Article 80 of the Civil Execution Act applies mutatis mutandis to realization. In this case, "the standard sales price under the provisions of paragraph (1) of the following Article" in Article 59, paragraph (5) of that Act is deemed to be replaced with "minimum auction price", "execution court" in Article 60, paragraph (2) of that Act is deemed to be replaced with "trustee", "standard sales price" in that paragraph and Article 71, item (vi) of that Act is deemed to be replaced with "minimum auction price", "minimum purchase price" in Article 63, paragraph (1) through (3) and Article 67 of that Act is deemed to be replaced with "minimum auction price", "court execution officer" in Article 65 and Article 67 of that Act is deemed to be replaced with "trustee", and "any other creditor(s) effecting a seizure (excluding creditors effecting a seizure who filed a petition for a compulsory auction or an auction after the time limit for a demand for distribution)" in Article 76, paragraph (1) of that Act is deemed to be replaced with "creditors who filed a petition for foreclosure".

Article 51When realization is completed, a trustee must deliver company money and submit a statement of expenses on execution of duties along with supporting documents, and a report on realization if the realization is conducted by way of private contract, to a court clerk on the date specified by a court.

Article 51-2creditors may make a demand for distribution to a court by the end of the date for successful bid in the case of realization by package auction or by the date of public notice which was specified by the court in the case of realization by sale by private contract.

Article 52A court must deduct expenses of the foreclosure procedure from the total amount of the proceeds of sale by package auction, monies delivered pursuant to Article 51 and monies which a trustee appropriated as payment for expenses and remuneration pursuant to Article 35, paragraph (1), and liquidate distribution firstly for enterprise mortgage holders and creditors having preference over them with the remaining portion for other creditors.

Article 53(1)The amount of distribution which creditors having a special security right should receive does not exceed an amount obtained by deducting the amount obtained by multiplying expenses of the foreclosure procedure by a ratio of the price of the property to the total amount of the preceding Article, from the price of the subject property of a special security right.

(2)The price of the subject property of a special security right is to be an amount obtained by multiplying the proceeds of sale by package auction by a ratio of the evaluated price of the property under Article 38, paragraph (1) to the evaluated price of the entire property of the company under that paragraph if realization is conducted by package auction, and a sales price if realization is conducted by sale by private contract.

Article 54(1)When distribution is implemented based on a distribution list of enterprise mortgage holders and creditors having preference over them, a trustee must file an application for the following registrations without delay:

(2)The expense required for application for registration of item (i) of the preceding paragraph is to be included in expenses of the foreclosure procedure and the expense required for application for registrations of item (ii) of the preceding paragraph is to be borne by successful bidders or purchasers.

Article 55The provisions of Article 84, Article 85, Article 86, paragraph (1) and paragraph (3), and Article 88 through Article 92 of the Civil Execution Act applies mutatis mutandis to distribution.

Article 56When a petition for foreclosure is withdrawn, the seizure under Article 20 is to be extinguished.

Article 57(1)Upon a petition of a company or ex officio, a court may order a trustee to deliver the property of a company for which sale is prohibited pursuant to Article 45, paragraph (3), to the company.

(2)With regard to the property which a trustee delivered to the company by an order of the court under the preceding paragraph, the seizure under Article 20 is to be extinguished at the time of the delivery.

Article 58When the foreclosure procedures are terminated by withdrawal of a petition for the foreclosure or revocation of the order to commence the foreclosure procedure, the court must give public notice to that effect immediately.

Article 59When the foreclosure procedures are terminated by withdrawal of a petition for the foreclosure or revocation of the order to commence the foreclosure procedure, a trustee must file an application for cancellation of registrations made pursuant to Article 23 or Article 24 without delay. The same applies to the property for which seizure is extinguished pursuant to Article 57, paragraph (2).