What companies can apply for corporate rehabilitation?

Corporate rehabilitation is a system that any company with the intention to continue its business and the possibility of rehabilitation can apply for.

Under the current Debtor Rehabilitation and Bankruptcy Act, corporate rehabilitation can be applied for even when in a state of insolvency or at risk of becoming insolvent.

In other words, even if some debt repayment is currently difficult, rehabilitation can be considered if the company can continue its business while adjusting debts to pursue normalization.

In particular, companies like manufacturers that have fixed assets, production facilities, and personnel secured, with an active operating base, may have rehabilitation considered before bankruptcy because they can restructure and recover through rehabilitation even when experiencing temporary liquidity deterioration.

Corporate rehabilitation can be applied for by companies under commercial law (stock companies, limited companies, etc.), individual business owners (when meeting certain requirements), in cases of current excess debt or imminent insolvency, and when management normalization through a rehabilitation plan is judged feasible.

When rehabilitation is applied for, the court temporarily prohibits debt collection and seizure prior to rehabilitation commencement (preservation order), and after the rehabilitation commencement decision, creditors cannot enforce compulsory execution without court permission.

During this period, under the court's supervision, the company prepares a rehabilitation plan and gets the opportunity to recover by reducing/installment-paying debts after consultation with creditors.

Corporate rehabilitation legal procedures are highly specialized and complex, so it is essential to proceed with the procedures alongside a rehabilitation specialist attorney.

We recommend reviewing your financial status, debt structure, and sustainable business model viability with an attorney experienced in corporate rehabilitation.