The final blow to Cool Japan. Spiber, which received ¥11 billion in investment, leaves ¥36 billion in debt and transfers its business to a new company owned by Masayoshi Son's eldest daughter through a second-company scheme

"The fate of the Cool Japan Fund has now run its course — Spiber's poor performance delivers the final blow." This was the verdict of Nikkei journalist Kei Kitayama writing for Toyo Keizai Online on March 19, 2026. Six days later, on March 25, a Nikkei Asia report revealed that Spiber — Japan's synthetic biology unicorn — had entered a private restructuring process, with its business to be transferred under a "second company scheme" to a newly established firm called "CRANE," founded by Maya Kawana, the eldest daughter of Masayoshi Son. This marks the first-ever private restructuring of a domestic unicorn company in Japan. The Cool Japan Fund had invested a cumulative approximately ¥11 billion in Spiber, making it the fund's single largest investment. The fund was already carrying accumulated losses of ¥38.3 billion, and with the addition of Spiber's impairment, it is widely expected to miss its accumulated loss reduction targets for a third consecutive fiscal year, raising questions about the fund's very survival. For the fiscal year ending December 2024, Spiber recorded net sales of ¥414 million against a net loss of ¥29.5 billion. Repayment of ¥36 billion in interest-bearing debt was mathematically impossible. The "second company scheme" employed in this case transfers profitable operations to CRANE while leaving the original Spiber entity — burdened with ¥29.5 billion in losses and ¥36 billion in liabilities — to be wound down. This approach has long been criticized globally as "socializing losses while privatizing gains." The following critiques — Allan Meltzer of Carnegie Mellon University's dictum that "capitalism without failure is like religion without sin — it doesn't work"; Luigi Zingales of Chicago Booth's observation that "easy reorganization mechanisms create moral hazard that encourages excessive risk-taking"; Mark Roe of Harvard Law's analysis that "Section 363 sales circumvent the normal Chapter 11 plan process and undermine creditor protections"; and Vanessa Finch of UCL's criticism that "pre-pack administration disadvantages unsecured creditors" — are academic and practical critiques directed at the second company scheme itself, entirely independent of this particular case. Elliott Management, led by Paul Singer, is known for its battles against this type of restructuring approach, consistently maintaining that "restructuring should not be used to selectively disclaim obligations to certain creditors." The Spiber case adds a new dimension to this classic debate: the context of a Japanese unicorn.

Summary

"The fate of Cool Japan Fund has run its course here — Spiber's poor performance delivers the final blow." This was the verdict of Nikkei journalist Kei Kitayama in Toyo Keizai Online on March 19, 2026. Six days later, on March 25, reporting by Nikkei Asia revealed that Spiber, Japan's synthetic biology unicorn, had entered a private restructuring process, with its business to be transferred via a "second company method" to a newly established company called "CRANE," founded by Maya Kawana, the eldest daughter of Masayoshi Son. This marks the first private restructuring of a domestic unicorn company in Japanese history. Cool Japan Fund had invested a cumulative approximately ¥11 billion in Spiber, making it the fund's largest single investment. The fund was already carrying accumulated losses of ¥38.3 billion, and with the addition of an impairment on Spiber, it is widely expected to miss its accumulated loss reduction targets for a third consecutive fiscal period — putting the very survival of the fund in question. Spiber's fiscal year ending December 2024 saw net sales of ¥414 million against a net loss of ¥29.5 billion. Repayment of ¥36 billion in interest-bearing debt was mathematically impossible. The "second company method" employed in this case transfers the profitable business operations to CRANE, while leaving the ¥29.5 billion in losses and ¥36 billion in debt with the old Spiber entity to be liquidated. This approach has long been criticized globally as "socializing losses while privatizing profits." The admonition of Carnegie Mellon University Professor Allan Meltzer — "Capitalism without failure is like religion without sin. It doesn't work" — the observation of University of Chicago Booth's Professor Luigi Zingales that "easy restructuring mechanisms create moral hazard that encourages excessive risk-taking," the analysis of Harvard University's Professor Mark Roe that "Section 363 sales circumvent the normal Chapter 11 plan process and undermine creditor protections," and the criticism of UCL's Professor Vanessa Finch that "pre-packaged administration disadvantages unsecured creditors" — all of these are academic and practical criticisms directed at the second company method itself, independent of this specific case. Paul Singer's Elliott Management is known for its battles against this type of restructuring approach, consistently holding the position that "restructuring should not be used to selectively repudiate obligations to certain creditors." The Spiber case adds a new dimension to this classic debate — that of the Japanese unicorn.

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Cool Japan Fund — "The Killing Blow"

On March 19, 2026, reporter Kei Kitayama of Toyo Keizai Online published an article titled "The Fate of the Cool Japan Fund Finally Runs Out — Spiber's Poor Performance Delivers the Killing Blow." The line "It is inevitable that losses for the fiscal year ending March 2026 will balloon significantly due to impairment write-downs on invested capital" makes clear that Spiber's out-of-court restructuring is not merely a failed investment for the Cool Japan Fund — it is a blow that threatens the very survival of the organization itself.

The Cool Japan Fund (formally: Japan Overseas Infrastructure Investment Corporation for Transport & Urban Development) had invested a cumulative approximately ¥11 billion in Spiber, making it the fund's single largest investment. The fund was already carrying accumulated losses of ¥38.3 billion, and the Spiber impairment will cause losses for the fiscal year ending March 2026 to expand significantly further. The fund had already missed its accumulated-loss-reduction targets for two consecutive fiscal years, and the Spiber impairment makes a third consecutive miss virtually certain. This could trigger a "mandatory business continuity review or integration."

Hitoshi Kinoshita (shoutengai) of Kumamoto Castle East Management Co., Ltd., published a piece on his note titled "Three Patterns of Dysfunctional Public-Private Partnership, as Seen in the Downfall of the Cool Japan Fund," declaring that Spiber's poor performance "delivered the killing blow to the Cool Japan Fund" and pointing to structural problems in public-private funds.

What Is Spiber — A Dream That Began with "Spider Silk"

Spiber Inc. is a biotechnology company headquartered in Tsuruoka City, Yamagata Prefecture, founded in September 2007 by Kazuhide Sekiyama (born January 2, 1983) and Junichi Sugawara. Both graduated from Keio University's Shonan Fujisawa Campus (SFC). Sekiyama enrolled in the Faculty of Environment and Information Studies in 2001, and in September 2004 began research on synthetic spider silk synthesis at Professor Masaru Tomita's Institute for Advanced Biosciences. He founded the company while still a doctoral student.

The company's core technology is "Brewed Protein" — a technology for producing structural proteins through microbial fermentation. Plant-based sugars such as dextrose derived from corn are fed to microorganisms to produce materials that do not depend on petrochemical resources. While the research originated with synthetic spider silk, the technology platform has evolved to encompass the design and production of diverse protein-based materials (fibers, resins, films, foams, coatings).

Spiber has been an iconic Japanese deep-tech startup and, as a regional bioventure, has been cited in the National Diet as a successful model of regional revitalization. It formed the core of Tsuruoka's identity as a biotech hub, employing approximately 200 people (many relocated from other prefectures, with roughly 10% holding foreign nationality) and operating a company-run nursery school, "Yamanoko Hoikuen."

¥100 Billion Raised, ¥36 Billion in Debt, ¥29.5 Billion in Net Losses

Spiber's fundraising history is grand in scale. In 2015, Goldwin invested approximately ¥3 billion. In 2018, the Cool Japan Fund injected approximately ¥3 billion. In 2021, Carlyle invested ¥10 billion, the Cool Japan Fund made an additional investment (cumulative approximately ¥11 billion), and Fidelity International and Baillie Gifford joined, bringing the company's valuation to ¥133 billion.

However, the financial statements for the fiscal year ending December 2024 were catastrophic. Against revenues of ¥414 million, operating losses stood at ¥4.8 billion. Net losses reached ¥29.5 billion, including ¥28 billion in impairments on the ADM joint-venture plant in Clinton, Iowa — which never became operational. Interest-bearing debt had ballooned to approximately ¥36 billion, and self-funded repayment by the December 2025 deadline was mathematically impossible.

Baillie Gifford Shin Nippon Trust downgraded its valuation of Spiber in its April 2025 annual report, disclosing that "two major shareholders are exploring the sale of their entire stakes." Fidelity Japan Trust PLC classified Spiber in a "liquidation pool" upon fund closure, notifying investors that "there is no assurance as to the value or timing of any proceeds from the disposal of Spiber."

The Successor Company Method — Its Mechanics and Global Criticism

The "successor company method" (daini kaisha hōshiki) employed in this case involves transferring profitable businesses, technology, personnel, and intellectual property to CRANE (the new company), while the old Spiber retains ¥29.5 billion in losses and ¥36 billion in debt for liquidation. In the English-speaking world, this is referred to as "hive-down restructuring," a "good bank / bad bank split," or the "successor company method," and is analogous to a Section 363 sale under Chapter 11 in the United States.

This method has been used repeatedly around the world, and has been repeatedly criticized. The crux of the criticism is the "socialization of losses and privatization of gains" — a structure in which the good assets go to the new company's owners while the bad assets (i.e., the debts) are imposed on creditors.

The late Professor Allan Meltzer of Carnegie Mellon University offered a pointed critique of such bailout-style restructurings in general: "Capitalism without failure is like religion without sin. It doesn't work." His argument is that mechanisms that protect management and investors who took excessive risks from the consequences of those risks destroy capitalism's capacity for self-correction.

Professor Luigi Zingales of the University of Chicago Booth School of Business has systematically argued that good bank / bad bank separation mechanisms generate moral hazard. "If managers know they can split the company and keep only the 'good' part, their incentive to manage debt conservatively is weakened" — an observation that applies directly to the process by which Spiber raised over ¥100 billion while allowing ¥36 billion in interest-bearing debt to balloon.

Professor Mark Roe of Harvard Law School has analyzed the problem of Section 363 sales (the American version of the successor company method) being used to circumvent the ordinary Chapter 11 plan process, thereby undermining creditor protections. In Section 363 sales — particularly when government support is involved — the debtor side effectively determines the terms, and creditors are left with little choice but to accept them.

Professor Barry Adler of NYU School of Law has pointed to the problem of Section 363 sales functioning as "sub rosa plans," gutting the creditor-protection mechanisms that Chapter 11 is supposed to provide.

Professor Vanessa Finch of UCL, in her book *Corporate Insolvency Law: Perspectives and Principles*, analyzed how pre-pack administration in the UK — the British equivalent of the successor company method — structurally disadvantages unsecured creditors. In particular, "connected party pre-packs," in which the management of the old company or their associates acquire the assets of the new company, have been criticized as a breeding ground for conflicts of interest. The independent review commissioned by the UK government in 2014 (the Graham Review, conducted by Teresa Graham CBE) recommended greater transparency in connected-party transactions.

Professor Anat Admati of Stanford University, in *The Bankers' New Clothes* (co-authored, 2013), criticized the good bank / bad bank separation structure in the financial sector for "socializing losses (with Bad Bank losses borne by taxpayers or creditors) while privatizing gains (with Good Bank profits accruing to new shareholders and management)."

Professor Simon Johnson of MIT Sloan (former IMF Chief Economist), in *13 Bankers* (co-authored, 2010), noted that similar hive-downs "allow the same management or related parties to acquire 'good' assets at low cost."

GM's "New GM" / "Old GM" Split — The Most Famous Case of the Successor Company Method

The most large-scale application of the successor company method was the 2009 GM (General Motors) case. Following its Chapter 11 filing, profitable operations were transferred to "New GM" (General Motors Company), while debts and unprofitable assets were left with "Old GM" (Motors Liquidation Company).

While this restructuring was praised as a model case, it also drew fierce criticism. Thomas Lauria of White & Case, representing unsecured bondholders with $27 billion in claims, argued it was "fundamentally unjust" that the UAW retiree medical benefit trust (VEBA), despite being in the same creditor class, received a far more favorable recovery rate. Professor Todd Zywicki of George Mason University, in a Wall Street Journal op-ed, criticized the GM and Chrysler restructurings for distorting Chapter 11's "absolute priority rule" — which holds that senior creditors must be fully repaid before junior creditors receive anything — for political motives.

Elliott Management, led by Paul Singer, is the hedge fund best known for fighting this type of restructuring. In Argentina's sovereign debt restructuring, Elliott maintained for more than a decade the position that "restructuring should not be used to selectively deny obligations to specific creditors," ultimately achieving full recovery. Elliott took a similar stance on creditor rights in the Delphi restructuring.

Spiber's Successor Company Method — Specific Criticisms

Specific criticisms have also been directed at the Spiber case.

The commentator known as "turning point" published an analytical piece on note titled "[Structural Critique] Spiber Out-of-Court Restructuring Edition — The Fairness of the Successor Company Method," raising a core concern: "What is happening here is not primarily about saving the technology — it is about deciding where to leave the debts that have accumulated in the old company, and who bears which burden." The writer pointed out that out-of-court restructuring provides insufficient creditor protection compared to legal insolvency proceedings (civil rehabilitation or corporate reorganization), and that CRANE's structure benefits at the expense of creditors.

Venture capitalist maru, in a note titled "The Price of a Moonshot: The Truth Behind Unicorn Spiber's Financial Crisis," analyzed the trajectory from fundraising to financial crisis. Nagi, in a note titled "The Reality of Dream Unicorn Spiber's Massive Losses??," critically examined the gap between unicorn valuation and reality. Ezure Management, in a piece titled "Spiber's Management in Danger," noted that "the cash flow situation is serious" and flagged the reality that the American factory never became operational.

In Japanese legal academia, debate has persisted over whether the successor company method can be subject to the right to rescind fraudulent acts under Article 424 of the Civil Code — the right of creditors to rescind asset transfers made for unjustifiably low consideration. However, proving intent is difficult, and this mechanism has limited practical efficacy as a check. In JAL's (Japan Airlines') 2010 corporate reorganization, then-ANA President Shinichiro Ito publicly criticized the process, stating: "JAL is wiping its debts clean and then competing with an unencumbered balance sheet — this is not a fair competitive environment." The same criticism applies to Spiber: if CRANE continues operating with the same technology, personnel, and facilities while freed from ¥36 billion in debt, the parallel argument stands.

Maya Kawana (CRANE Representative) — Masayoshi Son's Eldest Daughter

Maya Kawana, who leads CRANE, was born in 1981. She spent all 16 years of her primary and secondary education — from Keio Yochisha Elementary School through university — within the Keio system, graduating from the Faculty of Economics. She and Sekiyama are said to have been childhood friends since Keio Yochisha. In 2004, she joined the investment banking division of Goldman Sachs Japan, where she spent approximately five years working on global offerings and M&A advisory. In December 2019, she founded BOLD Inc., focusing on brand investment in the fashion and apparel sector.

The strategic intent behind Kawana's decision to publicly disclose that she is the eldest daughter of Masayoshi Son is clear: to signal to the banking consortium and creditors a "long-term growth orientation," rather than a short-term exit via IPO or acquisition. However, the structural similarity to what MIT's Professor Johnson criticized as "related parties acquiring 'good' assets at low cost" cannot be dismissed. Given that Kawana and Sekiyama are Keio Yochisha alumni, and that Kawana's BOLD Inc. specializes in fashion and apparel investment (Spiber's primary market), the "connected party pre-pack" concern highlighted by UCL's Professor Finch comes into sharp relief.

The "Curse" of Synthetic Spider Silk — Zero Companies Have Reached Commercialization

There is no guarantee that Spiber's technology will reach commercialization under CRANE's new structure. Professor Randy Lewis of Utah State University, a world authority on spider silk research, flatly stated in an interview with *Chemical & Engineering News*: "Even with a complete fermentation and purification process, you will never be able to manufacture spider silk for $10–15 per kilogram."

Canada's Nexia Biotechnologies burned through over $110 million before collapsing. Both DuPont and BASF withdrew. U.S.-based Bolt Threads pivoted away from synthetic spider silk after raising over $400 million, with its valuation falling 94% in two years. Across synthetic biology broadly, high-profile failures have multiplied — Ginkgo Bioworks saw its valuation plummet from $15 billion to under $1 billion.

Biomaterials media outlet SEVENTIETWO analyzed the situation as follows: "A growth strategy premised on mass production requires enormous capital expenditure before reaching monetization, and the companies could not withstand the capital consumption in the interim."

Impact on Tsuruoka

Spiber was the core of Tsuruoka City's identity as a biotech hub, and the majority of its approximately 200 employees had relocated from other prefectures. The more-than-20% workforce reduction in December 2025 and the out-of-court restructuring symbolize the shaking of a regional revitalization model. The fact that CRANE will be based in Tsuruoka can be read as a signal of continued commitment to the region, but whether the scale of employment and R&D investment will be maintained remains unknown.

Impact on the Industry

First, debate over the fairness of the second-company method intensifies domestically. The criticisms from Professor Meltzer, Professor Zingales, Professor Roe, Professor Finch, and Professor Johnson were academic in nature, but with the concrete case of Spiber now at hand, there is potential for this to develop into a practical debate questioning how insolvency proceedings should work within Japan's startup ecosystem.

Second, a fundamental reassessment of the investment thesis for deep tech and biomaterials. The losses sustained by Carlyle (¥10 billion), the Cool Japan Fund (¥11 billion), Fidelity, and Baillie Gifford drive home the lesson that estimates for the return horizon on biomaterials startups predicated on mass production were far too optimistic.

Third, governance problems within public-private funds. The Cool Japan Fund's three consecutive years of missing targets will trigger a policy debate questioning the very continued existence of the fund. The transparency of investment decisions made with public money, and the mechanisms for holding decision-makers accountable, are once again called into question.

Fourth, concerns over moral hazard. As Professor Zingales points out, the existence of the second-company method as a "safe escape hatch" risks giving startup executives an incentive to tolerate excessive risk-taking. Raise ¥100 billion, accumulate ¥36 billion in debt, post ¥29.5 billion in net losses — and then "start over" with a new company called CRANE. If this structure becomes a model case, Professor Meltzer's warning will take on an ever more realistic dimension.

References: Nikkei Asia, "Daughter of SoftBank's Son to support Japanese unicorn Spiber" (December 2025); The Carlyle Group, "Strategic Partnership with Spiber" (September 2021); Baillie Gifford Shin Nippon Trust Annual Report (April 2025, Spiber valuation downgrade); Fidelity Japan Trust PLC Half-Yearly Report (Spiber classified to Liquidation Pool); Chemical & Engineering News, "Can Spiber make spider silk-like materials a reality?" (ACS); Prof. Randy Lewis (Utah State University) interview on spider silk economics; CNN Business, "Meet the Japanese spider silk startup behind North Face's $1,300 parka" (May 2022); Science.org, "Synthetic biology meets tough times"; Luxeplace, "Bolt Threads valuation crash 94%"; Iowa Economic Development Authority Spiber/ADM incentives disclosure; Agri-Pulse, "Iowa incentives support ADM-Spiber efforts"; SEVENTIETWO, "Spiber Out-of-Court Settlement, the Limits of the Mass Production Model" (March 2026); turning point (gifted_mango8323), "[Structural Critique] The Fairness of the Second-Company Method" (note); tech venture capitalist maru56, "The Cost of a Moonshot" (note); Kinoshita Hitoshi (shoutengai), "The End of the Cool Japan Fund" (note); Prof. Luigi Zingales (Chicago Booth) on moral hazard in restructuring; Prof. Mark Roe (Harvard Law) on Section 363 sales; Prof. Barry Adler (NYU Law) on sub rosa plans; Prof. Vanessa Finch (UCL), *Corporate Insolvency Law*; Prof. Anat Admati (Stanford GSB), *The Bankers' New Clothes* (2013); Prof. Simon Johnson (MIT Sloan), *13 Bankers* (2010); Prof. Allan Meltzer (Carnegie Mellon) on capitalism without failure; Teresa Graham CBE, *Graham Review of Pre-pack Administration* (2014); Todd Zywicki (George Mason University) on absolute priority rule violations; Thomas Lauria (White & Case) GM bondholder representation; Paul Singer / Elliott Management creditor rights advocacy; GM Section 363 Sale (Motors Liquidation Company, 2009); JAL Corporate Reorganization (2010) and ANA CEO Shinichiro Ito criticism