Tokyo Barrister: Start the law firm bankruptcy

Chapter 886 The Frightening Possibility

"The binding meaning of precedents does not mean that the court must make judgments based on old cases without change." Kitahara said, "If judging based on precedents will lead to unfair consequences, or if the case being judged is different from the precedents, the court can make a different judgment from the precedents."

The Supreme Court's ruling was indeed unfavorable to Kitahara.

This is undeniable.

So, Kitahara was the first to say this.

Then, Kitahara continued, "The bank's new loan to repay old loan is actually a disguised extension! First of all, the purpose of the loan is already limited. After Nippon Steel obtains a new loan, it can only be used to repay the old loan."

"So, in this process, Nippon Steel actually did not obtain the right to use the funds. With ordinary commercial loans, debtors can use them to improve production equipment, pay employees' salaries, purchase raw materials, etc. However, the new loan obtained by Nippon Steel does not have any right to use it freely. From the beginning, its use was strictly limited!"

"And - more importantly!" Kitahara said, "Nippon Steel's cash flow situation has not been improved in any way because of the new bank loan. On the surface, the bank seems to have issued a loan. In fact, the bank's funds only moved through Nippon Steel's account for a while and then returned to the bank."

"May I ask, during this process, has Nippon Steel's cash flow situation improved at all? No - the cash flow is still tight, and the amount of cash left on hand has not increased."

"Secondly..." Kitahara looked at Tanimoto and continued, "The bank's claim is essentially still the original claim. The amount of the claim has not changed. However, this claim has changed from an unsecured claim to a secured claim. In this way, the bank obtains the right to priority payment, which infringes the rights of other creditors!"

"Are we going to ignore the facts and declare this guarantee legal just because the bank and Nippon Steel signed a new contract on the surface, but the money was transferred through another account?!"

Kitahara launched a counterattack.

From the perspective of substantive review, he proposed that "borrowing old for new" should be regarded as an extension of the debt, rather than a new debt.

Faced with such an unfavorable situation, the young lawyer was still able to make such a rebuttal, which was beyond the expectations of many people present.

Tanimoto listened to Kitahara's answer and laughed in his heart.

Sure enough, when faced with the court's ruling, one can only avoid the issue.

"Mr. Kitahara, what do you mean by signing a contract on the surface?" Tanimoto said, "The contract signed by both parties is written in black and white and is legally binding!"

"Borrowing new money to repay old debts is not simply a loan extension. On the contrary, it is a new debt agreement signed by the bank as a creditor and the enterprise as a debtor, after they have re-examined the debt situation. It has a fundamentally different effect from a simple loan extension!"

"Well! Lawyer Kitahara may not be familiar with banking business, so there is such a misunderstanding." Tanimoto did not forget to ridicule the young lawyer again.

Tanimoto thought Kitahara was doomed to lose.

He couldn't wait to see the panicked expression on the other side.

However, when he looked up, he found that Kitahara's expression was still calm.

Even when he was pushed to the edge of despair, he still looked like he didn't care! !

The corners of Beiyuan's mouth curled up slightly. Of course, he had another trick up his sleeve.

Although, he is not a bankruptcy lawyer.

However, Kitahara possesses the terrifying ability to launch a surprise attack from an unexpected place and defeat the opponent.

"Chief Judge," Kitahara said as he took out the materials. "What I have in my hand is part of the preliminary audit report of Nippon Steel by the current bankruptcy administrator. Of course, the assets of Nippon Steel have not been fully audited yet. However, the assets of the three major production bases have been audited."

"From these audit reports, it can be seen that Nippon Steel's assets have shrunk seriously, and many accounting violations have been discovered. For example, although the company purchased a second-hand production line, it recorded it as a brand new one in the accounting records, and inflated the payment for the goods, which led to Nippon Steel overestimating the service life and residual value of the equipment. At the same time, there were also several overseas buyers who cancelled their orders for manufactured steel, but did not record the inventory impairment, etc."

"These accounting irregularities have caused Nippon Steel's assets to be seriously overvalued. After squeezing out the water, Nippon Steel is likely to be insolvent!"

"So what does insolvency mean?" Kitahara changed the subject and continued.

The young man's words touched the nerves of everyone in the courtroom.

"The law clearly stipulates that bankrupt companies cannot set up new guarantees for unsecured debts." Kitahara said, "Nippon Steel is likely to be insolvent. This means that even if there are secured claims, they are not actually enough to be fully repaid. Therefore, in the case of insolvency, debts will become debts that cannot be covered by guarantees, whether they are new debts or old debts. In this case, the law should not recognize the effective establishment of bank mortgages!"

Kitahara launched an attack from another angle.

The rationality of revoking the bank mortgage can be demonstrated from the perspective that Nippon Steel is likely to be insolvent.

"We also have Supreme Court precedents to support this view," Kitahara said. "In its Civil Judgment No. 35 of Dahua 675, the Supreme Court determined that if a company that was insolvent provided a guarantee within one year before bankruptcy, it should be revoked because it jeopardized the creditors' right to equal compensation!"

Kitahara also submitted a Supreme Court case.

The situation changed again in an instant!

Insolvent?! Tanimoto didn't expect Kitahara to find a new angle to attack at the last minute! He also looked at the Supreme Court case submitted by Kitahara. Indeed, it was just as Kitahara said.

Thus, the legal view of both parties is -

There is support from prior case law.

However, Kitahara is still at a disadvantage. Although Kitahara has thrown out an insolvent enterprise and its external guarantees need to be revoked, after all, the bankruptcy administrator's complete audit report on Nippon Steel has not yet come out, and it is still unclear whether it is insolvent.

however--

Kitahara's rebuttal has injected uncertainty into the case.

Everyone present has discovered that—

The bank was not sure to win the lawsuit. If they failed to deal with the lawyer Beiyuan, the bank's mortgage rights might be revoked!

(End of this chapter)