Fresh out of college, Sam Gordon bought a one-way ticket to Tokyo for a chance to explore Japan’s exotic culture while teaching English at the nation’s largest language school. All it took to get the job was one simple interview.

The adventure, which began five years ago, has abruptly come to an end. His employer, Nova Corp., hasn’t paid him since September. The company closed its operations last week and filed for court protection, following a government crackdown on its business strategy. With $20 left in his bank account, the 28-year-old Mr. Gordon says he is living on his credit card.

“At least I have a big fridge and still have some food in it,” says Mr. Gordon. He doesn’t want to go home to Milford, Del., just yet, he says, because he’d have to borrow money for the plane ticket.

Mr. Gordon is one of more than 4,000 foreign-language teachers working for Nova to be slammed by the biggest scandal in Japan’s foreign community in years. The company, renowned in Japan for the hip-shaking pink bunny in its commercials, had been on a hiring binge, setting up recruitment offices in the U.S. and the United Kingdom and prowling college campuses offering jobs.

Nozomu Sahashi, the company’s quirky founder, was fired last week as president and has dropped from sight. Now, worrisome details are trickling out: The 56-year-old executive had quietly moved profits from publicly traded Nova to his private company, a court-appointed administrator alleged at a news conference. The administrators, who are scrambling to find a sponsor to help turn around Nova, showed reporters his lavish office, which has a Jacuzzi, a tea room and a secret bedroom.

Now, the Nova teachers are jobless and those who have lived from paycheck to paycheck are stuck in Japan. Some have been threatened with eviction from their apartments because Nova, which had provided housing and deducted the rent from teachers’ salaries, stopped paying rent months ago. In the past week, 300 Nova teachers have swarmed the usually orderly employment agency office in western Tokyo, called Hello Work, seeking jobs.

One labor union is planning to arrange for teachers in distress to give lessons in exchange for a Japanese bento-box meal. Alarmed that so many of its citizens are affected, the Australian government has struck a deal with Qantas Airways Ltd. to provide discounted one-way air tickets to Sydney.

“I’m not really looking for a new job because the market is just flooded with teachers,” says Matya Sheppard, a 23-year-old Canadian Nova teacher who is dipping into her savings to pay for food and other expenses.

“I have no one to talk to. I’m in limbo,” says Kristen Moon, a 23-year-old teacher from Philadelphia who fears she will lose her Tokyo apartment. Ms. Moon, who came to Japan in May for a “new experience” after graduating from college in New Zealand, is getting along by giving private lessons to several Nova students.

English-conversation schools are a big business in Japan. Millions of Japanese dream of speaking English. But the six years of language classes given in middle and high schools focus on grammar, not conversation, so few children learn to speak English well. The $3.5-billion-a-year foreign-language-education industry teems with more than 1,100 companies catering to about two million students, according to the Japan Association for the Promotion of Foreign Language Education.

The Osaka-born Mr. Sahashi, who founded Nova in 1981, used a particularly inviting pitch. He promised his clients native English teachers at half the price or less charged by rival schools. He touted lessons as cheap as a movie ticket, so students could drop by as casually as if they were going to a bar. There was one catch: To get the cheapest price — about $13.50 for a 40-minute class — students had to pay in advance for 600 lessons.

Armed with a wildly popular marketing campaign featuring a cheeky pink bunny mascot, Nova rapidly opened 900 schools, took on 400,000 students ranging from toddlers to businesspeople and dominated the language-school industry. The bunny, which shook its hips and, in TV commercials, came to the rescue of people who wanted to improve their foreign-language skills, became a nationwide phenomenon. It soon even appeared as a character in videogames. The school’s convenient locations and policy of letting students come in whenever they wanted to were also a hit. Sales reached $500 million in the year ended March 31.

To gather enough teachers, Nova set up nine recruiting centers in cities from Chicago to Sydney, according to the company’s recruiting Web site, now shut down, and posted ads on Internet job sites. Salaries offered were modest — between $2,000 and $2,600 a month — but the hiring process was simple, consisting mainly of a grammar test and short interview, teachers say. “We interview 100,000 foreigners every year,” wrote Mr. Sahashi in a Japanese magazine article this year.

Once they landed in Japan, teachers say they got straight to work. “It was trial by fire,” says Jerry Johnston, a 24-year-old Floridian who started teaching for Nova in July. Mr. Johnston, who was recruited at a career fair at Florida State University, said an experienced instructor watched him teach for a couple of days and corrected him when he spent too much time on any one part of the lesson plan. Then he was on his own.

Students, meanwhile, found it hard to book lessons because there weren’t enough teachers. And when students quit before attending all their prepaid classes, the school recalculated the lessons at a higher rate, thus reducing their refunds.

Thousands of Nova students complained to consumer-protection agencies. In June, the government effectively banned the sale of Nova’s key product: hugely discounted prepaid tickets. Nova quickly ran out of funds, and checks began to bounce in July. On Friday, the company filed for reorganization proceedings, the equivalent of Chapter 11 bankruptcy proceedings.

That has left students like Mari Matsunami with a bunch of prepaid tickets. “I hope a sponsor will come up and continue the operation so I can use up all the tickets,” says the 39-year-old accountant. Ms. Matsunami, who has taken English lessons at Nova for 10 years, says she believes her unused tickets are worth about $1,300.

Many Nova teachers, hoping to remain in Japan, are looking for other jobs. It hasn’t been easy, since most don’t speak Japanese.

http://online.wsj.com/article/SB119394083023779349.html?mod=googlenews_wsj

Foreign language teachers who suddenly lost their jobs when Japan’s largest language school operator closed have been forced to rely on food handouts from their former students in exchange for private lessons, teachers and union officials said Thursday. Impromptu lessons are being offered in parks and restaurants because teachers can’t afford classrooms, or even apartments, they said.

“We know teachers who don’t know where their next meal is coming from,” the president of the Nova Union of Staff and Teachers, Robert Tench, said at a press conference Thursday. “They are in desperate need.”

Some 4,500 foreign language teachers from all around the world lost their jobs with Japan’s largest language school operator, Nova Corp, on October 19.

In response to the sudden end to their livelihoods, the Nova Union of Staff and Teachers launched a “lessons for food” programme for the teachers who are on the verge of becoming homeless.

Natasha Steele, from Sydney, Australia, was fed by her student and came home with a bag full of pastries, enough to feed her for two weeks.

The 26-year-old teacher, who was recruited in Australia and arrived in Japan only 10 months ago, was recently evicted from company accommodation along with her two roommates.

One teacher from Canada lost her job and apartment nine days into her new life in Japan, while a Scottish teacher had to have her parents pay for a flight back home after only a month into her job.

The union also plans to launch a Nova relief fund where people can donate money to help the teachers thrown out of jobs and to request assistance from various embassies, including those of Australia, Britain, Canada, the United States and France.

Australia’s Qantas and British Airways have offered Nova teachers discounted return flights home. Many teachers have not been paid for two months and they cannot afford airline tickets, Tench said.

Last Friday their employer filed for bankruptcy. The scandal-tainted company was granted court protection under the Corporate Rehabilitation Law.

All schools in its network abruptly suspended operations a week ago, dumping thousands of teachers into Japan’s foreign language market.

Nova accumulated debts of about 43.9 billion yen (381.89 million dollars) when students cancelled lessons after the Ministry of Economy, Trade and Industry ordered the company to suspend some of its classes in June.

The ministry’s order came after it determined that the company had falsely advertised its services.

The scandal caused a rapid plunge in student enrollment. At its peak in 2005, Nova had 480,000 students learning English, French, German, Spanish, Italian and Chinese at branches nationwide.

Some 420,000 students, as well as instructors, were only informed about the temporary suspension of the schools through the media or notices posted in classrooms.

The company had already been in labour disputes with its employees for several years.

As the industry leader, Nova had a profound influence in the industry, driving down prices for lessons, standards of services and employment conditions, according to said Louis Carlet of the National Union of General Workers Tokyo Nambu, which represents Nova union.

Nova has said it aims to find a supporter for its rehabilitation within a month, but four Japanese firms have already showed reluctance to join with the troubled company, according to the Kyodo News Agency.

Meanwhile, Nova’s embattled president, Nozomu Sahashi, 56, has gone into hiding.

“Not paying wages is a crime under the Labour Law,” said Tench, who had been a teacher at Nova for 13 years.

http://www.earthtimes.org/articles/show/134491.html

Former Nova Corp. President Nozomu Sahashi admitted the language school chain withheld wages from thousands of employees, saying the now-defunct company could not raise sufficient funds, Osaka Labor Bureau sources said Friday.

The bureau interviewed Sahashi on suspicion of violating the Labor Standards Law and may seek criminal charges after questioning Nova’s current management team.

http://www.asahi.com/english/Herald-asahi/TKY200711020304.html

As English conversation school chain operator Nova Corp. filed for court protection from creditors under the Corporate Rehabilitation Law last week, schools that have contracts with Nova to dispatch assistant language teachers are scrambling to find substitute teachers or resorting to the use of CDs recorded by native speakers.

“The children were very much looking forward to learning real English as it’s actually used through songs and games from them,” said Shin Naito, headmaster of Yoga Primary School in Tokyo’s Setagaya Ward.

English classes with ALTs, who are native English speakers, are increasingly popular among schools, which are eyeing the introduction of compulsory English education at primary schools in the future. About 11,000 ALTs were dispatched through education boards to schools nationwide in the 2006 academic year.

The Setagaya Ward Board of Education contracted with Osaka-based Nova to dispatch ALTs to 64 public primary schools in the ward from the 2006 academic year. According to the contract, six teachers from Nova make the rounds of the schools to teach English. The board set aside a budget of 20 million yen for fiscal 2007.

As Nova’s nonpayment of wages came to the fore, the board decided to terminate its contract with Nova on Oct. 23 and started talking with Nova about conditions for the termination. The announcement of Nova’s filing for protection under the law was made while the two sides were still in negotiations. A Nova employee who was in charge of the talks with the board later telephoned the board and said the matter was no longer up to him and that the board should contact the court-appointed administrator.

Currently the board is approaching another firm to dispatch teachers. However, the timing–the middle of an academic year–is not convenient for such an arrangement. The board has no prospect to resume English classes at its schools with native speakers.

“We are consulting with our lawyer about how to deal with Nova,” said an official of the board.

===

Unpaid salaries case probed

The Osaka Chuo Labor Standards Inspection Office questioned former Nova Corp. President Nozomu Sahashi on Monday on suspicion of having violated the Labor Standards Law by failing to pay salaries to Nova employees, including foreign teachers, The Yomiuri Shimbun learned Thursday.

According to sources, Sahashi said he did his best to manage the firm’s cash flow, but failed as a result of a potential sponsor suddenly deciding against making a contribution.

Whether the firm had sufficient funds to pay salaries is expected to be the focal point of the bureau’s efforts to build a case against the school chain, Sahashi, or both.

The bureau plans to investigate the firm’s financial status from the time salary payments were delayed, with support from Nova administrators.

The bureau asked Sahashi several times in October to explain the circumstances behind the salary payment delays, and received a response Monday.

http://www.yomiuri.co.jp/dy/national/20071102TDY02304.htm

Failed NOVA Corp.’s thousands of unpaid teachers, hundreds of thousands of paying students left without classes and billions of yen in debt have been well-documented, but Shukan Asahi (11/9) notes an important question about the English conversation chain remains unanswered: What’s going to happen to the NOVA bunny?

NOVA grew to become Japan’s biggest English conversation chain, but its rapid growth became too hot to for it to handle, and the company is now in the hands of receivers after filing for protection from creditors.

Receivers have said they’ll give NOVA a month to find a savior and if it doesn’t happen, the company will go bankrupt.

While in its heyday, the NOVA bunny was one of the country’s most recognizable symbols, but what’s going to happen to it now?

“If NOVA can find a company to prop it up so that it can continue offering classes and doing business, the company’s trademark rights and intellectual property rights like the bunny will stay as they are,” a expert on commercial law tells Shukan Asahi. “But if NOVA goes bust and the company is broken up, all its assets have to be monetized and the proceeds forwarded to creditors. Rights to the bunny could well be sold off. That is, of course, if there’s anybody out there who wants to buy them.”

The NOVA bunny first appeared in a TV commercial the conversation class chain started airing in the autumn of 2002. It made an enormous impact among the cute-loving Japanese and was soon among the most highly rated commercials in the country.

Merchandising followed, first with the release of a CD that reached No. 12 on the Oricon chart — Japan’s equivalent of Billboard — then came soft toys, mobile phone straps, T-shirts; the whole kit and caboodle.

Within months, the NOVA bunny was one of Japan’s hottest properties. Like the company that spawned it, though, fate hasn’t been too kind to the NOVA bunny.

“When the bunny merchandise first came out, it was only sold to students of the chain, so it was regarded of something of a rare commodity and also served to boost student numbers. I wanted to buy a bunny doll myself, so checked out the prices on an online auction site and saw that they were selling for several thousand yen apiece,” Dokkyo University professor and economic analyst Takuro Morinaga tells Shukan Asahi. “The bunny was as cute as hell, but soon it was being sold everywhere and eventually turned up in game centers all across the country, losing that ‘rarity value’ that had made it so popular in the first place. I think, like NOVA itself, it wasn’t good for the bunny’s fortunes that it became too popular too quickly. It’s really unfortunate, but I think in terms of the value of intellectual property and commercial rights, it’s a bit much to expect anything from the NOVA bunny now.”

http://mdn.mainichi.jp/culture/waiwai/news/20071102p2g00m0dm012000c.html