It isn’t just foreign companies that have a robust history with Korea’s militant labor unions. The troubles of GM Korea and SsangYong Motors have been well documented over the last decade. This week SsangYong Motors finally succumbed to the pressures of the Korean market. The company filed for bankruptcy after defaulting on loan repayments of 60 billion won ($54.4m USD). SsangYong is unlikely to receive further government support, with the national government unlikely to step in to provide aid for
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The Korean Corporate Restructuring Promotion Act of 2018: Korean Insolvency Law Updates
The recently enacted Korean Corporate Restructuring Promotion Act (hereinafter as “CRPA”) focuses on facilitating “…constant corporate restructuring and promotes the stabilization of financial markets and the development of the national economy, by providing for matters necessary to promptly and efficiently implement corporate improvement of enterprises with signs of insolvency.” (Art 1 (Purpose) CRPA). The CRPA is intended to facilitate out-of-Korean-court restructuring procedures. Often, debtors prefer out-of-court proceedings over in-court proceeding, because the belief that out-of-court proceedings shall lead to more
Continue readingDoes a Korean court have the power to issue a preliminary attachment on Korean assets stemming from a foreign court claim?
A situation often arises when a plaintiff is suing a Korean debtor in a foreign court and the non-Korean plaintiff wishes to attach the Korean-based assets of the Korean defendant in Korea. Typically, the plaintiff found no assets of the defendant abroad and fears the disposal of the assets in Korea. Thus, typically, the plaintiff wishes to file to a Korean court a request for a provisional attachment of the assets of the prospective defendant. While, provisional attachments of assets of Korean
Continue readingEnglish-speaking Korean lawyers and International Lawyers at International Law Firm in Korea discussing issues of Korean Law
IPG Legal is a leading client-focused international law firm with offices in Korea that is, often, selected over the ubiquitous Korean Law Firms when success is essential and success depends on nuanced street-smart advice, proactive and unconflicted representation. Our attorneys are, intentionally. different from the crowd. From our retired judge partners to our junior associates, we are all trained with an intense focus on client success, lawyer proactivity, and to understand the nexus between your commercial and legal needs. Our attorneys
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Korean Bankruptcy Court in Seoul, Korea Established
Korea, in March 2017, established the Seoul Bankruptcy Court. The Seoul Bankruptcy Court replaces the Seoul Central District Court’s Bankruptcy Division. The establishment of the Seoul Bankruptcy Court is welcome news for most Seoul-based practitioners. Seoul Bankruptcy Court The Seoul Bankruptcy Court is the first separate bankruptcy court in Korea. The Seoul Bankruptcy Court was established because of a drastic increase in bankruptcy/insolvency filings over the last few years and a perceived need to have more efficient handling of bankruptcy
Continue readingRestructuring of Korean SMEs a Potential Lucrative Business in Korea
Bloomberg has an interesting article on “Zombie” companies in Korea. Many of these companies have decent cash flow, but because of Korean corporate realities many have been less than capable of controlling costs. 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
Continue readingKorea New Exchange (KONEX) Basics
The Korean Exchange (KRX) established, on July 1, 2013, an SME only-listed securities market with the, facial, purpose of providing a new avenue for SMEs in obtaining assets for investments. A KONEX-listed firm with capabilities to list, at a later date, on the KOSDAQ or KOSPI may, also, benefit from a stream-lined procedure to list on the KOSDAQ or KOSPI. Korea’s capital markets have been, strongly, criticized for not providing adequate funding sources for small companies. Most funding for companies
Continue readingMerger/Acquisition Opportunities in Korea: Lotte Korea Buys KT Car Rental from KT Corp.
In a sign of changing times in Korea, KT Corp., a company best known for its telecom business, has sold its car rental business to the unlisted Hotel Lotte Co. Ltd., a company controlled by Lotte Group. The publicly reported acquisition price is over US$900 million. Lotte is a leading Korean-Japanese hotel company with its hands into about everything imaginable including construction, retail, textile, food products, beverages, oil & gas and entertainment. However, it competitive advantage is in retail shopping
Continue readingCorporate Bankruptcy/Restructuring in Korea: The Line Begins Here (Korea’s Chapter 7 & 11 Bankruptcy)
Corporate bankruptcy/insolvency procedure in Korea is similar, in many respects, to the U.S. Chapter 7 & Chapter 11 bankruptcy procedures with some significant differences. Korean corporate insolvency structure is legislated via the Korean Debtor Rehabilitation and Bankruptcy Law (KDBRB). The KDBRB replaced a convoluted and often conflicting myriad of laws in the form of the Corporate Rehabilitation, Composition and Bankruptcy Act. On April 1, 2006 this new law became effective. Bankruptcy Basics in Korea (Chapter 3 of Korean Debtor Rehabilitation and
Continue readingWeekly Korean Legal News From International Law Firm – IPG Legal for the Week of July 28, 2014
Weekly Korean Legal News From International Law Firm – IPG Legal for the Week of July 28, 2014Korean Legal News Reported by the Media on the Week of July 28, 2014 IMC may blacklist Korean builders over collusion Prosecutors continue probe into ferry owner’s driver Foreign workers upset by severance pay formula Restructuring urgent for big Korean companies Relocation of USFK Headquarters to Go Ahead Most Recent Posts from the Korean Law Blog This slot is reserved for the new
Continue readingWeekly Korean Legal News From International Law Firm – IPG Legal for the Week of July 21, 2014
Weekly Korean Legal News From International Law Firm – IPG Legal for the Week of July 21, 2014Korean Legal News Reported by the Media on the Week of July 21, 2014 South Korea Plans $40 Billion Stimulus to Tackle Weakening Growth Seoul to push tax on corporate cash reserves U.S. Chamber of Commerce chief urges FTA implemantation Workers in Their 60s Outnumber 20-Somethings Mortgage deregulation raises concerns Most Recent Posts from the Korean Law Blog Debt Collection in Korea: Foreign
Continue readingWitholdings Taxes on Transactions between Korean & Hong Kong Companies
The Republic of Korea and Hong Kong signed a double taxation treaty on July of 2014. The treaty will come into force, if ratified, by the respective assemblies. Under Korea Tax Law, the, normal, withholding tax is 22%. The main purpose of the treaty is to reduce this rate and, also, allow the governments to share information on potential tax evaders. This double taxation treaty, among other things, includes provisions for: A 15% Withholding Tax on dividends and a 10%
Continue readingSsangyong’s Korean Bankruptcy/Rehabilitation Proceeding & Many other Korean-based Construction Companies
Ssangyong Engineering & Construction filed for rehabilitation proceeding based on the Korean Debtor Rehabilitation and Bankruptcy Act. The Act requires, among other things for: 1. The Receiver to submit to the court a Creditor List;2. For the court to determine that the company’s “going concern” value is greater than the “liquidation” value of the company;3. The Receiver to submit to the court a Rehabilitation Plan;4. The Rehabilitation Plan to be approved by 2/3 of the unsecured and 3/4 of the
Continue readingGuide to Winding-Up/Permanetly Closing a Korea-based Company
Any business in Korea that are registered at a corporation must wind-up their company to legally close their business. Many companies, however, choose to forgo this step thinking that no repercussions will be felt. This belief is far from the reality. I know a pending case that has lead to prosecutions, a lawsuit of a related company and a tax audit of an individual shareholder. The following is the procedure to close a company in Korea. Please note that this
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