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Litigation

Japan

A number of Japanese courts have ruled on the issue of fair compensation for minority shareholders squeezed out in management buy-outs. In each case, minority shareholders faced with compulsory acquistion procedures using wholly callable shares sought adequate consideration of such shares. The decisions stress the importance of giving minority shareholders the opportunity to consider a buy-out.

The newly promulgated Act on the Civil Jurisdiction of Japan over Foreign States allows private parties and states better to predict whether they will be subject to the civil jurisdiction of the Japanese courts. In particular, private individuals seeking to engage in transactions with a foreign state will be better able to ascertain and avoid potential risks related to jurisdictional immunity.

Under the Financial Instruments and Exchange Law, a company that files a securities report containing a material false statement is liable to past and present shareholders for damages caused thereby. A number of recent judgments shed light on issues of civil liability for false statements in securities reports, especially on the method by which shareholders plead and prove the amount of damages.