レポート用紙(青)

Outlines of the Incident

 

Root

 

   This case was caused by LIVEX company.  LIVEX, president Mr. Takashi Chiba, was a medium size real estate developer at that time from 1980 to 1991.  It is root that LIVEX sold new financial goods, "Hotel Condominium Owners System", in those days.  LIVEX sold small sum share of a divided brand new hotel to a general consumer as financial goods in cooperation with the financial agencies.

 

 

Articles that LIVEX marketed

 

1983 Hotel B&B Hachiouji

1985 Hotel B&B Shibuya

1986 Hotel Sanjouen,  Sanjouen Medical Center

1987 Hotel B&B Shinjuku,  Hotel B&B Kiba

1988 College Town Hachiouji,   Hotel Arthur Sapporo,   

            LIVEX Medical  Club Sapporo

1990 President Hills Kamisohigaya

 

 

Sales method

 

  LIVEX advertised and notified its financial goods.  LIVEX arranged and held economic seminar by well-known people to promote its financial goods. LIVEX made potential customer list using seminar's audience information, such as name, address, etc.  Salespeople of the LIVEX sold its financial goods using the potential customer list.

Sales catch phrase was as follows:

"You will be an hotel owner with small down payment (10% to price) and long time financial loan".  "You can get monthly certain income (6% annual rate) as dividend payment generated from hotel business profit by trusting hotel operation company for all hotel operation".  "Loan security is only sufficient the financial goods.  The goods are marketable.  You can trade it anytime and in that case obtain capital gain". "You can receive tax reduction.  And it is useful for private pension as well".

 

 

Swindle commercial activity/ Bogus dividend

 

  LIVEX stopped the payment that was monthly guaranteed payment to the owners as dividend, in October 1991, when LIVEX was in financial troubles.  And LIVEX went bankrupt when dishonoring of the second times disclosed in April, 1992. LIVEX received the adjudication of bankruptcy on November 20, 1992.  And then, surprising fact was clarified.  LIVEX did not have own cash for operation.  LIVEX had managed precarious day-to-day operation with debt from financial agencies and loan of owners from financial agencies. LIVEX built luxury external appearance hotels one after another disregarding the profit. LIVEX sold them exceeding real power price. LIVEX used money of the owners' loan from the financial agencies for making up payment of LIVEX's debt  and dividend to the owners.  In short, it was "bogus dividend".

There were the hotels that the amount of guaranteed dividend accounted for 64 to 87 % of its revenue, even if the hotels' operation rate was 100 %. After all, the hotel management did not work in substantial operation ratio, such as 50 to 70 %. Further more, it is impossible to sell, because the value of the mortgage properties became only 1/20 to 1/10 low in real power.  As a matter of fact, it was not merchantable.  Therefore, LIVEX business was complete swindle commercial activity.

 

 

Responsibility of tie-up financial agencies

 

 Tie-up financial agencies:

        - ORIX

        - Chiyoda Life Insurance

        - Taiyo Mutual Life Insurance

        - APLUS

        - Asahigin Gurantee

  At first, the most of the owners did not know the name of LIVEX, and they doubted its business.  However, the owners trusted the first class financial agencies, such as ORIX, Asahi Bank, etc., who cooperated with LIVEX as tie-up financial loan.  And finally, they decided to make sales contract with LIVEX on its financial goods. If the tie-up financial loan was not prepared for the financial goods, "Hotel Condominium Owners System" was not come into existence.  The first class financial agencies put credibility into the system. The owners understood that the tie-up financial agencies investigated and analyzed  LIVEX business and "the Hotel Condominium Owners System" by using the agencies' expertise capability.  LIVEX salespeople emphasized that the system was joint business between LIVEX and the tie-up financial agencies. The tie-up financial agencies left loan contract with LIVEX, said LIVEX salespeople. In fact the tie-up financial agencies never showed up.  The loan money was transferred directory to LIVEX by the tie-up financial agencies at the same time as contracting.  And the owners guaranteed it.   In fact some people were sent from the tie-up financial agencies to LIVEX as director.

  As soon as LIVEX went  bankrupt, the tie-up financial agencies pressed the loan debtor/ the owners for the full payment of debt. However, it was very difficult for the loan debtor/ the owners to pay, because the loan payment had highly depended on the dividend guaranteed income that was completely stopped since October 1991. The loan debtor/ the owners gave up monthly payment within about half a year to one year.  And there is person who ran to commit suicide.

  Now, the tie-up financial agencies proposed to extend the repayment period to twice and to make the amount of monthly repayment to a half in order to suppress unity of the loan debtor and moving protest action.  However, the tie-up financial agencies insisted on complete collection of principal and interest from the debtor/ the owners. And the tie-up financial agencies kept their mouth shut about responsibility of cooperation with LIVEX's swindle commercial business.

It was  drastically changed for the owners from "Private pension of certain safety" to the large amount of financial loan debt for a long term.  The most of the owners, who was made aged and became life relied on little pension, could not endure the change.  

The owners fused and launched into the lawsuit of "Lender liability pursuit of the tie-up financial agencies" at the bar of justice.

 

 

It is a violation of the law and severe punishment now

 

   New law "Act of Real Estate Specific Joint Business" was passed in June, 1994. The act is to prevent similar real estate small sum sales incidents in nationwide one after another, such as the MARUKO lawsuit incident and the Olympic Construction lawsuit incident. The government had the prison sentence and prohibited attaching of tie-up financial agencies of this kind of real estate small sum sales.

  A defendant financial companies who cooperated with the LIVEX swindle commercial business, such as ORIX, Asahi Bank, APLUS, etc., roared "We were sliding safety before enforcing the act".

 

 

Annoying afterwards

 

  There were many cases that credit card application of the plaintiff's member was rejected by credit companies immediately after the lawsuit was raised.  As a result of investigation, we found that ORIX registered the personal information of the plaintiffs, as blacklist, at the Council of Credit and Trust Secret Service.  The plaintiffs were not multiple debtor.   Stop of the loan payment by the plaintiffs was an action of provisional measures until judgment of this trial.  It is natural that related companies keep from disclosing the credit information that affects the debt under lawsuit.  This was kept in COCO YAMAOKA incident.  Therefore, the plaintiff group made a strong protest with Mr. Miyauchi, chairman of ORIX, against the disclosure, for the purpose of withdrawal such annoying and threat on the debtor's credit information.  However, his answer was " The corporate policy can not be changed" as cold-hearted response.  It was the nature of "a loan shark".

                2001/3/25 ver.1

 



メモパッド I was Deceived Like This
メモパッド The Plaintiff Party who Acts
メモパッド The Progress of the Trial

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レポート用紙(青)