Japan's top language school goes bust

TOKYO, Oct 26, 2007 (AFP) - Japan's largest language school, Nova, filed Friday for bankruptcy protection, leaving thousands of foreign teachers without work or wages.

Nova's once ubiquitous blue-and-yellow signs, which famously advertised an experience akin to 'a study abroad trip' in the middle of Japan's crowded cities, were being taken down as the schools shuttered their doors.

The chain of schools has taught English and other foreign languages to hundreds of thousands of Japanese ranging from businesspeople to pensioners looking for a hobby.

It filed for protection from creditors at the Osaka District Court four months after the government ordered it to halt part of its operations over insufficient refunds to students who had cancelled contracts.

Nova came under intense public criticism over the scandal and has since struggled to keep remaining students. Many of its employees, including foreign teachers, have not been paid recently.

'Some people are just in despair. They don't know what they're going to do, what they're going to eat, how they're going to pay the bills,' said Bob Tench, a Nova teacher from Manchester, England.

Tench, who has been in Japan for 13 years and is involved with the teachers' union, said he had enough savings to stay, but that other language schools were flooded with applications from instructors.

'There are so many teachers looking for new jobs, but of course it's impossible except for the lucky few,' Tench said. 'It's a human tragedy caused by bad business practices.'

Teachers' blogs were also also rife with frustration.

'This whole situation has made me the most angry I've ever been in my life,' one writer fumed.

Nova had an estimated 400,000 students and 6,000 employees. Some 4,000 of the employees are foreigners -- many of them young people looking to spend a few years in Japan.

The foreign language school is burdened with debts amounting to 43.9 billion yen (385 million dollars), according to Japanese media.

With the company protected from creditors, a court-appointed trustee would sort out debts and seek sponsors to help rebuild Nova.

The trade and industry ministry in June slapped a six-month suspension on part of Nova's operations as it found refunds by the company to students who cancelled long-term contracts had been insufficient.

'Along with the students, there are foreign teachers and employees. This is a problem that will have an extremely wide impact,' chief government spokesman Nobutaka Machimura said.

'As the first and immediate step, we hope Nova will properly deal with it so that the damage will be minimal.'

Nova teachers received telephone calls early Friday asking them to stay at home. Others found out the news directly as they showed up at their schools and saw closed doors with the lights turned off.

The Australian embassy in Tokyo has opened a telephone support line for distressed nationals, including information on claiming unemployment compensation.

The British embassy said on its website that it was 'closely monitoring the situation' but that the assistance it could offer was limited.

Nova was founded in 1981 at the height of Japan's economic miracle by Nozomu Sahashi, who was keeping a low profile Friday.

Some students were ready to return to embattled Nova if it succeeds in making a turnaround.

One middle-aged man who has studied English at Nova for 10 years showed for class disappointed that the school was closed.

'Although there have been some really bad teachers, there have been reasonably good ones,' he said.

'I hope it will be able to restructure itself soon as I'm ready to continue my classes here.'