Before its bankruptcy, Nova employed approximately 15,000 people across a group of companies that supported the operations of and extended out from the "Intercultural Network" of its language schools.

The scope of its business operations reached its peak in February 2007 following a rapid expansion of its chain to 924 Nova branches plus a Multimedia Center located in Osaka.

Nova, known for high-priced lesson packages[3] and later plagued by lawsuits and negative publicity, began to decline in earnest almost immediately after the Ministry of Economy, Trade and Industry placed a six-month ban against soliciting new long-term contracts from students on the company on 13 June 2007.

It took roughly eight months for the company to reach the point where it filed for bankruptcy protection on 26 October 2007, whereupon the trading of its stock was suspended and was delisted on 27 November 2007.

Sahashi originally established the company with two high school graduates from Sweden and Canada whom he met via a friend who was studying abroad in Paris.

[16] In November 1996, Nova's initial public offering[11] was met with several demonstrations in front of Nomura Securities and the Tokyo Stock Exchange.

[24] Nova President Nozomu Sahashi, missing since before his dismissal, was officially replaced by three board members, including co-founder Anders Lundqvist.

The government did set up a special consultation booth briefly at the Hello Work public employment office in Shinjuku in Tokyo for Nova instructors seeking advice[3] but maintained its distance as its position was that the bankruptcy of Japan's biggest foreign language school chain was a private sector matter.

An investment company led by Masaki Inayoshi, who formerly served as chairman of G.communication, purchased the subsidiary of the Nagoya-based firm that ran both GEOS and Nova.

[33] Prior to its 2007 bankruptcy, the language school chain aggressively operated extensive advertising campaigns in print and on television and had a very high profile and strong brand recognition.

The students said they had purchased hundreds of tickets when joining the school, but found it impossible to use them all by the expiry date due to inflexible scheduling procedures.

Nova agreed to a proposal by the Damage Relief Committee to repay a total of 3.8 million yen and said the dispute had been the result of a misunderstanding.

"[52] On 11 December 2005, an Australian who had been teaching in an Osaka Nova branch reached an out-of-court settlement of ¥400,000[53] and a letter of commendation after claiming that the policy had interfered with his life.

[59] On 14 February 2007, the Ministry of Trade, Economy and Industry and the Tokyo Metropolitan Government conducted on-the-spot inspections at Nova Headquarters in Osaka and several other branches.

[60] Officials said that several Nova schools failed to give full refunds to students who canceled their remaining lessons after paying in advance.

[65] During the February office inspections the Ministry discovered a memo in which Sahashi stated there was no need to stop pushing sales despite difficulties meeting student reservations due to teacher shortages.

[70][71] The ruling prompted the Ministry of Trade, Economy and Industry to revise the regulations for the specified commercial transaction law to prevent a recurrence of trouble.

[69] Industry minister Akira Amari also admitted on 22 June 2007 that he met with Yasuhide Nakayama earlier that year in February shortly after his ministry began investigating the school.

[73] On 13 June 2007, the Ministry of Economy, Trade and Industry imposed a six-month ban on Nova from soliciting, accepting or finalizing new contracts for long-term courses that last for over a year or 70 hours.

[77][85] Sahashi also said that the company would not need assistance from financial organizations[80] During its annual stockholder meeting in June, he apologized for causing the disciplinary action by the government[85] and told the shareholders, "We'd like to regain your trust as soon as possible".

[91][92] The Asahi Shimbun reported on 11 September 2007, that Nova had made a request to an asset management consulting company, requiring them to return an outstanding amount of 8 million shares that were loaned to them on 30 July 2007.

Nova had previously used the asset management consulting company to arrange short term financing with an 11 million share stock loan on 29 July 2007.

[94] Commenting on its temporary possession of Nova shares, BNP said it had been the result of the asset management consulting company exercising its option.

[95] A decline in the stock price following the release of Nova's 2008 fiscal year first quarter financials[90] was preceded by news of a delay in payment of wages and bonuses to some employees.

The Unions also filed complaints reporting that Nova had withheld member's rent payment and the landlords had tried ask teachers to leave repeatedly.

[104] On 23 October, the Osaka Labor Standards office accepted a demand by Nova instructors to investigate criminal charges against Sahashi over delayed and unpaid wages.

[105] One example of the employment fallout after the collapse was the experience of small private school in Higashinari Ward of Osaka, which said 400 people applied in October for a single job opening.

[106] On 26 October 2007, Nova's stock was delisted and all branches closed, following an emergency board meeting that removed Sahashi from his position as head of the company.

[108] Foreign staff risked losing company-sponsored housing after Nova stopped paying their rent, which they did well before the official announcements of impending bankruptcy.

[112] In October 2008, approximately a year after the collapse, 24 former students filed a class action lawsuit against accounting firms KPMG AZSA & Co, former Nova president Sahashi, and five of the directors of the company claiming that the rapid expansion was pursued in a reckless manner, and that upfront lesson fees were being misappropriated.