Glad I'm not a Nova teacher, looks like they are going through a rough patch at the moment. So rough in fact that they are planning a strike for tomorrow:

http://www.debito.org/index.php/?p=651

do any of the teachers on the board have friends that work for Nova going tomorrow?

When I saw the topic name, I couldn't help but think that this was about Mega Man.

But, wow, I knew that Nova wasn't exactly doing well, but about to go bankrupt? That's quite extreme. Is competition in this field really that bad?

It has nothing to do with competition. The Japanese government penalized Nova for shady business practices, and without those practices (combined with the damage the penalty did) they are having trouble coming up with enough money to pay teachers/teacher's rent.

If they got penalized over labour standards as well they'd already be bankrupt.

I have a friend at Nova, he says it's pretty crazy. And the company is more or less insolvent.

So what exactly did they do? I found some articles that say they "deceived students about lesson availability" and that they've been banned from taking on any new students on long term contracts. I've found a few articles about what's happening to the employees, but I can't find much about the causes of insolvency.

If you dig through 3yen.com you will find some posts about Nova practices, etc.