Tokyo-based real estate company Hiei Sangyo has filed with the Tokyo District Court for special liquidation, becoming the sixth largest corporate bankruptcy this year with about 450 billion yen in liabilities, a private credit research institute said Monday.
Its two affiliates -- Hiei Tatemono and Hiei Finance Service -- have also collapsed, bringing the combined liabilities of the three companies to some 650 billion yen, Teikoku Databank said.
Capitalized by major construction company Tobishima Corp., Hiei Sangyo was established in 1964.
The firm expanded by actively investing in condominium and office building developments. In its business heyday, the company posted 108.6 billion yen in operating revenues in the business year through March 1984.
After the asset-inflated bubble economy burst in 1991, the Hiei Sangyo group languished under sluggish revenues and the weight of interest payments on huge borrowings.
In fiscal 1993, Hiei Sangyo incurred a capital deficit through a net operating loss of 64.6 billion yen.
The company mapped out a rehabilitation plan that called for focusing on rental and management of properties.
But the efforts did not lead to sweeping management rehabilitation and the company's capital deficit expanded to some 480 billion yen in fiscal 1998.
Hiei Sangyo, Hiei Tatemono and Hiei Finance Service all adopted a resolution in mid-May at shareholders' meetings that the companies would dissolve at the end of that month.
The companies filed with the court for special liquidation on Friday.