A total of 19,071 companies declared bankruptcy last year, leaving behind record debt of 23.987 trillion yen ($246 billion), up 77 percent from 1999, said the agency Teikoku Databank.

The previous debt record was set in 1998, when liabilities of failed companies reached 14.381 trillion yen.

The agency said debt was higher because of several high-profile failures, including retailer Sogo Co. and Kyoei Life Insurance, Japan's eleventh-largest life insurer.

Kyoei Life, which collapsed last October under debts totaling 4.6 trillion yen ($39 billion), was the country's biggest postwar bankruptcy yet.

A growing number of small and medium-sized businesses also failed after the government's policy of encouraging loans to the smaller companies ended.

Many businesses have had difficulty borrowing money from banks, which have reined in lending amid worries that Japan's recovery may be losing steam, the agency said.

For the month of December alone, bankruptcy cases rose 0.2 percent from a year earlier, though they fell 7.9 percent from November. Debts left behind by insolvent companies in December soared 111.9 percent from the same month a year earlier but were down 32.0 percent from November.

Japan is struggling to emerge from its most severe economic slowdown in decades. The economy is no longer shrinking and the government forecasts expect 1.5 percent growth this fiscal year. But many economists worry that slower growth in the U.S. could weigh on Japan's economy and lead to a rise in bankruptcies.

Tampa Bay Online

-- Anonymous, January 19, 2001