This Business Guru's Key Credential: He Went Belly Up
By DONALD MACINTYRE Tokyo
Kannosuke Ide never anticipated that his bankruptcy would create a business opportunity. But four years after seeking court protection from creditors, he has become a leading bankruptcy consultant for small-company owners in Japan. After writing a book about his experiences three years ago, he started getting phone calls from distressed business people desperate for help. All told, more than 4,000 have phoned. Ide has turned out two more books and now makes a decent living dispensing advice. He has even received requests from broke businessmen who want to license his pen name--Naito Meia (as in "nightmare")--for a bankruptcy consulting franchise. Not bad for a guy who went bust. "I didn't mean to make a living out of this, but there are so many people who need advice," says the 52-year-old Ide, a stocky man with a graying moustache and a quick smile.
Ide learned the bankruptcy business the hard way. As his marketing company slipped deeper into debt in the early 1990s, he was forced to borrow from mob-related loan sharks. But when Ide couldn't repay their exorbitant rates, the lenders started hounding him. One morning, as he was walking across a parking lot to his car, a young hood with a scar on his cheek approached, saying "Good morning, Mr. President." The thug then pushed Ide into his car and forced him to drive around town to ask friends for cash to repay his debts (he owed the thug and other money lenders $174,000). He got another shock when a loan shark later kidnapped one of his employees, who called from a cell phone during the ordeal.
Ide sought court protection in December 1994 and was declared bankrupt the next month. Today he works out of a sparse office in Tokyo, trying to help others avoid the kind of bankruptcy nightmare he went through. Company owners, he says, tend to be ignorant about bankruptcy laws and the legal options open to them. Lawyers, with their high fees and demands for up-front payment, are little help. By the time an owner is desperate enough to call in the suits, he usually doesn't have enough money to pay them. The first lawyer Ide met demanded $74,000 for the bankruptcy paperwork. "He was arrogant to boot," says Ide.
For a fee, Ide now offers advice and steers clients to lawyers who tend to charge less and care more. But what's most needed, he says, is a change in attitude. Reducing the stigma attached to bankruptcy in Japan would make distraught businessmen less likely to turn to loan sharks or, in extreme cases, suicide. As Ide puts it: "Bankruptcy isn't a crime."
With reporting by Sachiko Sakamaki/Tokyo
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February 15, 1999
Japan: Dangerous Company
Loan sharks find easy pickings among cash-strapped businessmen, many of whom are too embarrassed to go bust
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