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Jan 14, 2014

Ssangyong'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 secured claims.

This procedure is similar to Chapter 11 in the United States.  

We have a few cases that are proving to be very difficult to obtain approval of both secured and unsecured creditors.  Often, the Rehab Plan is, only, approved after litigation, prosecutions and/or one creditor gobbling up a good deal of the other debts.   This case will be interesting. 

For the purpose of full disclosure we are working on a few cases related to the rehabilitation of construction and other companies.  My friend over at the Kimchi Law Blog motivated this post.

IPG is engaged in projects for companies and entrepreneurs doing business in Bangladesh, Cambodia, China, Korea, Laos, Myanmar, the Philippines, Vietnam and the U.S.