Tokyo Barrister: Start the law firm bankruptcy

Chapter 897 Jade City's Counterattack

"What method?!" Terada asked immediately.

Yucheng said, "If the bank's claims want to be paid first, there is another way, and that is to offset each other's claims."

This bankruptcy lawyer once again proposed a new idea - offsetting.

Yucheng produced relevant materials on the bankruptcy of Nippon Steel. "After the preliminary audit by the bankruptcy administrator, we noticed that Nippon Steel has been gradually divesting its redundant assets in recent years due to cash flow problems. For example, it sold some upstream minerals, factories, and some machinery and equipment."

"At the same time, due to the impact of US tariffs, although Nippon Steel has suffered heavy losses overall due to tariffs, there were still a large number of steel buyers rushing to buy before the tariffs came into effect. Therefore, Nippon Steel also had a large amount of accounts receivable."

"Currently, Nippon Steel's valuable receivables mainly consist of the above two parts, namely the monetary claims formed by the sale of corporate assets and steel products."

"What's next?" Shima Miho also urged. She also didn't want to see the strategic cooperation plan of Nippon Steel fail.

"If these claims are transferred to a bank, the bank can offset them. For example, Nippon Steel sold a factory and had a claim of 100 million yen against the buyer. At the same time, Nippon Steel also owed the bank a debt of 100 million yen."

"Then, the three parties can sign an agreement, stipulating that Nippon Steel will transfer this batch of debts or accounts receivable to the bank. For example, Nippon Steel stipulates that this debt is transferred for 100 million yen. Then, the bank will in turn owe Nippon Steel 100 million yen."

"Before, the bank had a 100 million yen claim against Nippon Steel. Now, the bank has a 100 million yen debt and a 100 million yen claim against Nippon Steel. So, they can offset each other. In this way, the bank has obtained the right to repay in disguise."

Yucheng spoke eloquently for about ten minutes in the conference room.

However, for a moment, not many people understood.

The issue of set-off in bankruptcy proceedings has always been very complex.

It is a difficult issue in bankruptcy law.

Even the knowledgeable Minister of General Affairs Terada was in the meeting room, but he was confused by Tamashiro's words.

"Can you explain it a little more clearly?" Terada asked.

Yucheng nodded:

"To put it simply, Nippon Steel owed the bank 100 million yen. So, Nippon Steel sold an asset worth 100 million yen to the bank. To obtain this asset, the bank had to pay Nippon Steel 100 million yen. This payment of 100 million yen could offset the 100 million yen that Nippon Steel owed the bank."

"The bank does not need to actually pay, and Nippon Steel does not need to actually repay the bank's loan, but the bank has obtained the right to receive priority repayment of Nippon Steel's assets in disguise."

According to Yucheng's explanation——

By offsetting each other, priority payment can be obtained in disguised form.

The bank representatives in the conference room all showed admiration. They had to admire this female lawyer for coming up with this method.

This method of offsetting each other has great advantages.

First, on the surface, Nippon Steel's assets were transferred to the bank at a fair price. For example, Nippon Steel's accounts receivable worth 100 million yen were transferred to the bank at a price of 100 million yen. Then, there is nothing wrong with this under the bankruptcy law. Because the price of this transferred asset is fair. Second, there is no cash flow. The credits and debts offset each other, and there is no cash transaction between the bank and Nippon Steel. This means that the bankruptcy administrator is basically unable to capture this transaction between the bank and Nippon Steel.

"I have done a preliminary calculation here." Yucheng said, "If all of Nippon Steel's accounts receivable are transferred to the bank at fair value, and then offset against each other, the bank will be given priority in repayment. Then the bank's claims will be guaranteed about 30%."

"At the same time, Nippon Steel has a large amount of fixed assets and inventory. These should be able to guarantee about 35% of the bank's claims. In this way, adding up the two sides, the bank has about 65% of the claims and can obtain priority repayment."

Yucheng finally reported this number.

65%.

This is a number that banks are willing to accept.

At least, not all the invested funds were wasted.

Moreover, a large portion of the bank's debt is interest.

This means that the bank can recover nearly 70% of the principal.

That was enough for the bank.

With this kind of guarantee, the bank can provide refinancing to Nippon Steel without any scruples, while continuing with its strategic investment plans with Future Space!
"Good! Very good!" Terada clapped his hands in the conference room. "It's time to teach those troublemakers a lesson!"

"If the restructuring plan goes smoothly, the workshop contractor's debt will be cut by at least 70%!!" Terada said directly.

After hearing Tamashiro's plan, Terada breathed a sigh of relief.

The bank representatives present also said that if Lawyer Yucheng's plan could be implemented, the previously interrupted financing arrangements could be restarted.

The worries of Nippon Steel's top management, Chairman Shibata, and Financial Director Nagai were also put down. These great lawyers in the field of bankruptcy law provided them with protection. At least, they no longer had to worry about their corruption being exposed.

After hearing the plan proposed by lawyer Tamashiro, Shima Miho calmed down a little. She soon realized that the plan proposed by Tamashiro could not only be used to ensure that the bank's creditors would be paid first, but also to transfer Nippon Steel's assets in disguise. The latter was the most important thing for the organization. The rare earth minerals held by Nippon Steel might be transferred to the future space in this way without anyone noticing.

Shima Miho immediately spoke in the conference room, "We are also interested in the divestiture of some redundant assets of Nippon Steel. Nippon Steel now has some overseas minerals and mines. We are also willing to bid to take over. At that time, we are willing to cooperate with Nippon Steel and the bank to sign a contract to transfer Nippon Steel's claims against us to the bank, so that the bank can offset their loans. Then, we are willing to take out a part of the income from the minerals and share it with the bank and Nippon Steel."

Miho Shima immediately added details about future space participation based on Tamashiro's plan.

Seeing that Shima Miho was willing to participate, everyone present couldn't help but feel excited again.

After being pushed into a corner by that lawyer Kitahara——

Now, under the leadership of Lawyer Yucheng, we can finally launch a thorough counterattack against the enemy!

(End of this chapter)