Japan Reports 1,408 Bankruptcies in August : Economy: Private firm says number is highest in 10 years. Debt soared 65.9% from a year ago.

TOKYO — Japan had 1,408 bankruptcy filings in August, the highest number in 10 years, a private research company said Thursday.

The total debt of bankrupt Japanese companies soared 65.9% to $8.04 billion in August from a year ago, one of the highest levels this year, the Tokyo Commerce and Industry Research Co. said.

The surge in debt reflects a 30% jump in the number of bankruptcy cases in August, it said.

August’s debt was about double the levels marked in the previous three months, approaching those of March and April, which were swollen in the aftermath of the massive earthquake in the western port of Kobe in January.

The size of the debt total and the number of bankruptcies were boosted by the failure of 218 firms related to Osaka-based Nishiki Finance Co., which declared bankruptcy in early August.

Nishiki had made short-term loans to small firms, taking promissory notes as collateral, and suffered when the slump in the Japanese economy in the 1990s forced many of its clients into bankruptcy. It accumulated debts of $876 million.

But Nishiki’s was only the fourth-largest bankruptcy in terms of debt for August. The largest was that of Hyogo Credit Service, which had debts of $1.37 billion, the report said.

Hyogo Credit was related to the failed Hyogo Bank Ltd., which is to be liquidated. A new institution will take over its business under the direction of financial authorities.

The state of bankruptcy applies to insolvent companies in the process of liquidation or reorganization under court protection from creditors, the research company said.

In August, bankruptcies of large firms with debts more than $9.8 million fell by 15 cases from a year earlier to 51.

But smaller companies still face problems, especially as a result of the high yen, it said.

Major corporations, through restructuring, are able to be optimistic with the dollar at 95 to 100 yen, but smaller companies are limited in the amount of business rationalization they can do.