The Bloomberg article, in part, notes:
"One of the biggest concerns is so-called “marginal” or “zombie” companies, usually defined in Korea as businesses that haven’t been able to make payments on interest from operating profit for three years. A prolonged period of low interest rates has led to an increase in marginal companies and there is an “urgent” need for restructuring, Bank of Korea Governor Lee Ju Yeol said this month. Financial Services Commission Chairman Yim Jong Yong has warned that unless the problems at these companies are addressed, they will become a burden to the economy. The number of marginal companies jumped to 3,295 last year, from 2,698 in 2009, according to the central bank. They account for 15 percent of businesses with more than 10 billion won ($8.6 million) of assets."
|Zombie Companies in Korea|
Please retain, in these matters, an experienced attorneys with experience in takeovers and employment law. This post was motivated by a terrible situation we are, presently, working on.
We, recently, saw an issue with an all cash "asset" deal turning bad because of the lack of proactive advice on employment/severance risks. You may be assuming more than you, actually, assume without a complete understanding of Korea's employment law.
The Bloomberg Article may be found at: Zombie Companies in South Korea
Other articles that may be of interest:
- Corporate/Bankruptcy Restructuring in South Korea
- Do you Sell a Buggy Whip in Korea: Company Restructuring in Korea?
Sean Hayes may be contacted at: SeanHayes@ipglegal.com.
Sean Hayes is co-chair of the Korea Practice Team at IPG Legal. He is the first non-Korean attorney to have worked for the Korean court system (Constitutional Court of Korea) and one of the first non-Koreans to be a regular member of a Korean law faculty. Sean is ranked, for Korea, as one of only two non-Korean lawyers as a Top Attorney by AsiaLaw. Sean's profile may be found at: Sean C. Hayes