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The case highlights the expansion strategies of Daiei Inc, a leading Japanese retailer. This expansion was funded by acquiring huge debts, which led the company to face bankruptcy in the fiscal year 2001-2002. The case then describes the various efforts of Daiei to restructure and reduce its debt burden and explains why they were unsuccessful. It also describes the initiative taken by the Japanese government-owned Industrial Revitalization Corporation (IRCJ) to help Daiei turn around. The case then discusses the plans that IRCJ and the Marubeni-led consortium, which was selected as its sponsor, have for Daiei''s rehabilitation. It explores the future prospects for Daiei in the light of the recent developments and also throws light upon the possible harm to the Japanese economy if IRCJ fails to deliver the desired results in the proposed time frame. The case is structured to enable students to: (1) study the domestic expansion strategies of a retailing company; (2) gain insights into the various aspects of financial restructuring in the case of a debt-ridden company; (3) examine how a retailing company took advantage of various political and economic situations to expand significantly; (4) examine the various debt restructuring initiatives taken up by a company to become profitable and the help offered by other parties in its efforts towards rehabilitation; (5) critically analyse IRCJ''s plans to turn around Daiei; and (6) study the recent trends in the Japanese retailing industry and analyse the possible implications of Daiei''s rehabilitation on the Japanese economy. The case is aimed at MBA/PGDBA students, and is intended to be part of the strategy and general management curriculum.