TOKYO -- The scandal-plagued operator of Japan's largest chain of private foreign language schools has filed for court protection from creditors, a court official said Friday.
Nova Corp. filed the request with the Osaka District Court on Friday morning under Japan's Corporate Rehabilitation Law, court spokesman Takeaki Tominaga said.
Following the court filing, the Jasdaq Securities Exchange for start-ups and venture companies suspended trading in Nova shares for the day and said the company will be delisted Oct. 27.
"This matter affects not only the students but foreign teachers and staff. I hope that the impact can be minimized," top government spokesman Nobutaka Machimura told reporters.
The Osaka-based foreign language conversation school chain has debts estimated at 43.9 billion yen (US$385 million; €269 million), according to Kyodo News agency.
Repeated telephone calls to Nova's headquarters met with busy signals Friday morning.
Nova's current plight began after consumers filed complaints claiming the company's advertisements about its services were misleading. The Ministry of Economy, Trade and Industry subsequently ordered it in June to suspend part of its business operations.
Amid the fallout from the scandal, the company - which promised in its advertisements a "study abroad experience at your local train station" - has been forced to shut down some of its schools due to a sharp decline in student enrollment.
A union representing foreign instructors working for Nova has said the firm has delayed wage payments to some 2,000 Japanese employees since July and to about 4,000 foreign instructors since September. October wage payments have been delayed indefinitely beyond the scheduled payment date of Oct. 15.
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