CONTENTS
- 1. The Story of the Client Who Requested Assistance with Corporate Rehabilitation Proceedings
- 2. Corporate Rehabilitation Proceedings, Assistance Toward a Decision Approving Simplified Rehabilitation
- - Proving Going-Concern Value and Substantiating Business Status
- - Establishing the Simplified Rehabilitation Plan and Responding to Debt Adjustment
- - Responding to Approval of the Simplified Rehabilitation Proceedings and Laying the Foundation for Performance
- 3. Result of the Assistance with Corporate Rehabilitation Proceedings, a Decision Approving Simplified Rehabilitation
- 4. Points to Note When Proceeding with Corporate Rehabilitation Proceedings
- - Requirements for Approval of the Rehabilitation Plan
- - With the Assistance of a Corporate Rehabilitation Attorney
1. The Story of the Client Who Requested Assistance with Corporate Rehabilitation Proceedings
The client who came to consider corporate rehabilitation proceedings was the representative of a small and medium-sized enterprise supplying medical devices and medical consumables to hospitals and clinics.
The client company had maintained stable sales while trading with numerous medical institutions, and it had secured a large quantity of medical device inventory and recruited additional sales personnel for business expansion.
However, contrary to expectations, as demand for equipment replacement by medical institutions decreased, sales performance declined, and the burden of inventory storage costs and financial costs increased.
In addition, as some clients delayed payment, the company experienced difficulty in collecting funds, and this led to additional borrowing to secure operating funds.
In the end, as the burden of loans from financial institutions and commercial debts accumulated, the company reached a situation in which normal repayment of debts was difficult.
However, the client company maintained stable clients and a sales network, and its potential to generate future profits remained sufficient.
Accordingly, the client requested the corporate rehabilitation attorney's assistance in proceeding with corporate simplified rehabilitation proceedings to normalize the business.
2. Corporate Rehabilitation Proceedings, Assistance Toward a Decision Approving Simplified Rehabilitation
The corporate rehabilitation attorney who handled the corporate rehabilitation proceedings closely reviewed the overall financial status and creditor relationships of the client company and analyzed the possibility of using simplified rehabilitation proceedings.
In particular, the attorney noted that, despite the temporary deterioration in liquidity, the company maintained stable clients and a business base, and the attorney focused on proving that it had sufficient value as a going concern.
The attorney also provided legal assistance covering the rehabilitation proceedings as a whole, taking into account the normalization of management after approval of the simplified rehabilitation plan.
Proving Going-Concern Value and Substantiating Business Status
The corporate rehabilitation attorney analyzed the status of transaction contracts with major medical institutions and recent sales data, actively substantiating that the client company was continuously carrying out business activities.
The attorney also organized and submitted delivery performance by client and the details of orders expected in the future, emphasizing that the company maintained a stable sales structure separate from the temporary shortage of funds.
In addition, on the basis of the held inventory and the sales network, the attorney proved that the company had sufficient potential to generate future profits and argued that its going-concern value exceeded its liquidation value.
Establishing the Simplified Rehabilitation Plan and Responding to Debt Adjustment
The corporate rehabilitation attorney distinguished debts to financial institutions from general commercial debts and established a repayment plan consistent with the actual financial situation of the client company.
In particular, the attorney designed a realistic structure of installment repayment reflecting the schedule for collecting accounts receivable and the expected scale of sales, and prepared the rehabilitation plan so that the business would not be weakened by excessive outflow of funds.
The attorney also concretized a debt adjustment plan that balanced the protection of creditors' rights and the company's potential for rehabilitation, focusing on increasing the likelihood of approval.
Responding to Approval of the Simplified Rehabilitation Proceedings and Laying the Foundation for Performance
The corporate rehabilitation attorney systematically organized the financial and business materials required during the course of the simplified rehabilitation proceedings and responded to the review by the court and the relevant agencies.
The attorney also explained in detail the status of the client company's retention of clients and its future management improvement plan, actively emphasizing the feasibility of the rehabilitation plan.
Furthermore, so that the rehabilitation plan could be carried out stably even after approval of the corporate rehabilitation proceedings, the attorney reviewed the fund operation plan and the debt performance plan together, assisting in laying the foundation for normalization of the business.
3. Result of the Assistance with Corporate Rehabilitation Proceedings, a Decision Approving Simplified Rehabilitation
As the corporate rehabilitation proceedings progressed, the court recognized the following points.
2. Considering the held inventory assets and accounts receivable, the going-concern value exceeded the liquidation value
3. The repayment structure of the rehabilitation plan was realistic and balanced the interests of creditors and the company's potential for rehabilitation
Accordingly, the court issued a decision approving the simplified rehabilitation plan for the client company.
4. Points to Note When Proceeding with Corporate Rehabilitation Proceedings
Corporate rehabilitation proceedings are a system that supports a company in continuing its business while adjusting its debts.
To proceed with corporate rehabilitation proceedings, it is necessary to accurately ascertain the financial status and creditor relationships and to prepare a feasible rehabilitation plan.
In addition, it is important to prove, through objective materials, a repayment structure that can obtain the consent of creditors and the feasibility of carrying out the rehabilitation plan.
Requirements for Approval of the Rehabilitation Plan
Category | Requirements for Approval |
Rehabilitation creditors | Consent of at least two-thirds of the total amount of voting rights |
Rehabilitation secured creditors | Consent of at least three-fourths of the total amount of voting rights |
Shareholders and equity holders | Consent of at least one-half of the total number of voting rights |
Guarantee of liquidation value | Inclusion of repayment terms no less favorable to creditors than upon liquidation |
Securing feasibility | Establishment of a rehabilitation plan that can realistically be carried out |
The rehabilitation plan must not violate the law and must satisfy the principles of fairness and equality among creditors.
In addition, it must be proven that continuing to operate the company is more favorable to creditors than liquidating it.
In the case of simplified rehabilitation proceedings, some of the requirements for approval are relaxed, but the feasibility of the rehabilitation plan still remains an important factor in the judgment.
With the Assistance of a Corporate Rehabilitation Attorney
A corporate rehabilitation attorney reviews the financial records, the list of creditors, and the statement of assets for the application to commence corporate rehabilitation proceedings, and systematically prepares the documents to be submitted to the court.
In addition, during the examiner's due diligence process, the attorney explains the company's business status and revenue structure, responds to inquiries regarding the possibility of rehabilitation, and provides support so that the proceedings can proceed smoothly.
During the creditors' meeting, the attorney demonstrates the necessity and feasibility of the rehabilitation plan and reviews measures for adjusting rights that reflect the creditors' opinions.
Daeryun, the ninth-largest law firm in Korea (based on 2025 National Tax Service value-added tax filings), provides systematic support throughout the entire corporate rehabilitation process through the collaboration of specialists in each field, including corporate rehabilitation attorneys and accountants.
If a review of corporate rehabilitation proceedings is needed due to deteriorating liquidity or debt burden, information on a suitable resolution is available through the 🔗legal consultation page.
This content is based on actual case studies of Daeryun Law LLC with some adaptations, and the copyright belongs to our firm.
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