Tokyo Barrister: Start the law firm bankruptcy

Chapter 659: Invisible Net (Part )

"It looks like picking up endless gold on the ground, doesn't it?" Miyakawa smiled helplessly. "Those large copper trading companies were just like crazy, scrambling to buy up the accounts receivable of small copper companies. At that time, the factoring business department of my father's law firm was almost going crazy."

"Do you think this business model is impeccable?" Miyakawa said. "At the craziest time, large copper trading companies even stopped doing their main business and became underground banks, specifically looking for financing from small copper companies."

Kitahara knew it very well.

There is no such thing as a free lunch.

A free lunch is always the most expensive.

If, as Miyakawa said, at the craziest time, large copper trading companies even stopped their main business, then this craziest moment is often the end of their prosperity.

With Kitahara's keen eyes, he immediately saw the flaws in this arbitrage model.

"If someone is willing to sell you a receivable of 100 yuan for 50 yuan, then most likely, the possibility of recovering the receivable of 100 yuan is small, and it is estimated that it has become a non-performing asset."

When Miyakawa heard that Kitahara had discovered the key to the problem so quickly, he couldn't help but secretly admire him even more. This was because it was his father and nearly a hundred lawyers in the firm who worked together to research and discover this problem.

"Yes, Kitahara. That's the thing."

The beautiful lawyer's voice continued, "Because those copper companies with good credit can make money too quickly by reselling accounts receivable, the demand for bank factoring business has greatly increased. Therefore, the bank in turn requires these copper companies to provide counter-guarantees. In other words, if these accounts receivable are not collected in the end, then the bank will hold these copper companies with good credit responsible."

"These large copper trading companies were blinded by the quick profits at the beginning. They thought that even if they occasionally assumed the guarantee responsibility for these accounts receivable, the amount of loss would be far less than the huge profits. Even if they provided guarantees to banks in return, it would still be a profitable business."

"So, this is the first step to collapse," Kitahara said.

Miyakawa nodded. "Later, some companies gradually discovered that something was wrong. The bad debt rate of the accounts receivable they acquired began to soar sharply. The guarantee liability they assumed to the bank gradually began to exceed the profit from reselling the accounts receivable."

"Until later, something happened," Miyakawa said. "A client came to my father's law firm. This client was a large copper trading company in Tokyo Bay. It also acquired the accounts receivable of many small copper companies and resold them to banks. As a result, the client was required by the bank to assume the guarantee responsibility because of the large amount of bad debts of the accounts receivable."

"The client felt something was wrong. Because they and our law firm had investigated these small copper companies beforehand, and would only purchase their accounts receivable after they met their requirements. How come the bad debt rate suddenly rose so fast?"

"So, my father and some team lawyers immediately investigated this. Later, we discovered a horrible fact."

"What facts?" Kitahara asked immediately.

"That is, many of the acquired accounts receivable are actually fake," said Miyakawa.

Just a few words caused a stir again.

"Falsification? Didn't your father, Attorney Imanishi, and others discover it during due diligence?" Kitahara had fought Imanishi in court before. He believed that Miyakawa's father was definitely a shrewd man. He would never fall for such an easy trick. This old fox couldn't fall for such a simple trap.

Miyakawa shook his head. "Kitahara, you can't even imagine it. All the materials about these accounts receivable are fake. Including these small copper companies that import copper from abroad. Those foreign companies are pretending to be them, or they directly registered a foreskin company abroad."

"The customs approval for copper imports was also fake. They even built a fake customs approval verification website themselves."

"Their office was also fake. In fact, it was rented by several people. They forged the office lease contract. When we finally tracked down the landlord, he had no idea that his office was sublet to these companies."

"The sales contracts they used to resell to domestic copper producers were also fake."

“They also impersonated the copper producer company, or registered a fake company.”

“The deposit payment records for the copper material sales contracts were also fake.” “After the deposit was transferred, it was actually taken away.”

"In short, all of this is fake. My father and the lawyers in the law firm could never imagine that all the materials in front of them would be fake!" Miyakawa said somewhat desperately.

Kitahara couldn't help but gasp after hearing this. They dared to form a chain of fraud to deceive the savvy lawyers. These scammers took advantage of the lawyers' blind confidence in their own profession, so that the lawyers were also fooled.

How courageous must the operator behind this be?

"And, Kitahara, you know what? At that time, the copper trading factoring business was so hot. A law firm could not handle a lot of factoring business, so law firms would subcontract some business to each other. Some due diligence on copper trading companies or witnessing business on copper materials would be assigned to law firms with less busy business. In this way, everyone would cooperate with each other."

"However, we did not expect that some of the witness documents provided by the law firms would be fake."

"My father and I were also looking through the documents provided to us by other law firms to find out how many of them were fake. We kept verifying. As a result, I found dozens of copper warehouse receipts that were apparently witnessed by lawyers but were actually fake," said Miyakawa.

Copper warehouse receipt?! Beiyuan couldn't help but sit up straighter, and a bad guess immediately emerged in his mind: "Could it be..."

"Yes, Kitahara, you guessed right. Eto Law Firm also helped us to witness the authenticity of the copper warehouse receipts." Miyakawa said.

The moment Miyakawa said that.

6◇9◇Book◇Bar

The world seemed silent.

It is difficult to describe in words how shocking it was to hear this news.

Even Kitahara was stunned. He had never thought that the copper warehouse receipt incident would involve the law firm of Miyakawa's family. Moreover, the Eto Law Firm was also involved.

"The current situation is that a large number of copper trading companies that have been sued by banks are preparing to sue Imanishi Law Firm. They accuse us of failing to detect these false accounts due to due diligence. The estimated amount of the lawsuit is very large. At present, the partners' meeting is urgently discussing how to deal with it."

Unexpectedly, the copper warehouse receipt pledge incident has affected Miyakawa.

Fate likes to play jokes.

When Kitahara wanted to push the girl in front of him away from the terrible whirlpool, in fact, they were both already in the same terrible abyss.

"The store is about to close." The clerk next to me reminded.

Kitahara woke up from his dream. He and Miyakawa had been sitting in this fast food restaurant until almost midnight.

The two men walked out of the station, and the atmosphere was unprecedentedly solemn.

If this is the case, Miyakawa will also be involved in the incident.

For some reason, the streets, which are usually bustling, are now silent and there is hardly any one in sight.

The night was eerily quiet.

Kitahara looked at Miyakawa who was walking beside him, and then looked up at the dark sky. He felt that there was an invisible giant net swallowing everything...

(End of this chapter)