Following up the previous report from earlier this month on the raids conducted by Japanese regulators after discovering accounting irregularities with Atlus parent Index Corp's books, the company has officially filed for the Japanese legal equivalent of corporate bankruptcy protection known as "civil rehabilitation" and is defined below:
Civil Rehabilitation Law
The Civil Rehabilitation Law was introduced in April 2000, replacing the Composition Law. The Civil Rehabilitation Law may be applied to all corporations and individuals, including joint stock companies, limited liability companies, medical corporations and educational corporations. The purpose of the Civil Rehabilitation Law is rapid rehabilitation before a corporate failure becomes more serious.
It has since been confirmed that the company's debt load was much higher than the first reported 14.8 million yen from April and currently stands at 24.1 billion yen ($249 million) as a result of multiple failed business units around Index Corp after its acquisition spree and assorted debts, with the Atlus division being one of the few profitable divisions of the company. Index is currently seeking a partner to continue operations in the short-term so that Atlus is not directly affected.
Currently, all of the current Atlus Japan release slate is expected to be released on schedule after the Japanese Twitter account made the confirmation earlier today and the slate is unaffected by the civil rehabilitation proceedings, though Chairperson Masami Ochiai and President Yoshimi Ochiai have declared intentions to resign their current positions as a result of the decision to have the company enter into rehabilitation.
While the bankruptcy doesn't mean that the company will go away immediately and will continue for the foreseeable future, it does put Index in a tough spot to find another sponsor or partner to keep the company going in the short-term in order to keep Atlus going. Really hope they find a partner soon, as I would like to play Dragon's Crown sometime this year.
Update: ATLUS USA CEO Naoto Hiraoka has released the following statement regarding the parent company's issues via Japanator.
Currently, Index Digital Media, Inc. and the ATLUS brand are unaffected by the Index Corporation proceedings in Japan. We’re carrying on day-to-day activities, business as usual. Shin Megami Tensei IV and Dragon’s Crown are still releasing on July 16 and August 6 respectively, and we’re licensing and publishing third-party titles such as R.I.P.D: The Game and Daylight. We want to thank all of our fans for their outpouring of support.