CONTENTS
- 1. Incheon Attorney | Case Details
- - Incheon Corporate Bankruptcy | Export Crisis With China Due to Korea-China Tensions
- - Incheon Corporate Bankruptcy | A Second Crisis Due to U.S. Export Restrictions
- - Incheon Corporate Bankruptcy | Financial Deterioration Due to COVID-19
- 2. Incheon Attorney | An Incheon Insolvency Attorney's Review of the Case
- - Incheon Attorney | Methods of Corporate Bankruptcy
- - Incheon Attorney | Legal Basis for Corporate Bankruptcy
- 3. Incheon Attorney | Details of the Assistance
- - Incheon Attorney | Financial Paralysis Due to the Export Crisis
- - Incheon Corporate Bankruptcy | Deficit Due to Loss of Operating Profit
- - Incheon Corporate Bankruptcy | Departures Resulting From the Closure
- 4. Incheon Attorney | The Court's Declaration of Corporate Bankruptcy
1. Incheon Attorney | Case Details
The client worked in semiconductor manufacturing for 20 years, and after leaving that job, established a semiconductor equipment manufacturing company 15 years ago, running it together with colleagues.
The client's business was a promising company with a total of 40 partner firms and client companies.
In addition, with exports to China, the company achieved annual revenue of 3 billion won and was converted into a corporation, growing steadily larger.
However, unable to withstand a series of setbacks including China's THAAD retaliation, the United States' export restrictions on Huawei, and COVID-19, the company ultimately closed.
With unpaid amounts piling up, such as being unable to pay the wages and severance of the workers who had worked alongside the client, the client explained that they spent every day in tears.
In the end, the client borrowed even from moneylenders and private loans, making things even more difficult.
As harm reached the innocent employees, the client came to an Incheon attorney to wind down the business and file for bankruptcy with the court so that no further harm would occur.
Incheon Corporate Bankruptcy | Export Crisis With China Due to Korea-China Tensions
The client began exporting in earnest to the Chinese market starting in 2017 and started to secure stable revenue.
However, in the latter half of 2017, as political conflict intensified over the THAAD deployment issue between Korea and China, the client encountered difficulty in concluding new contracts in China.
In particular, the collaboration with a major local Chinese company for which the client had been preparing a new contract also fell through, and as a result revenue sources declined sharply.
Through this development, the foundation for the company's growth began to be greatly shaken.
Incheon Corporate Bankruptcy | A Second Crisis Due to U.S. Export Restrictions
In 2019, the client developed equipment to be used by Huawei and pursued a large-scale contract.
When the client had reached the point just before signing the contract, delivery of that equipment was halted because of the United States' worldwide restrictions on Huawei.
In the end, the client lost an export contract worth approximately 9 million dollars, which dealt the client a serious financial blow.
Because of this change in United States policy, the client's main export channel was blocked, causing major disruption to the operation of the business.
Incheon Corporate Bankruptcy | Financial Deterioration Due to COVID-19
In early 2020, as the COVID-19 pandemic broke out, the client faced an unprecedented crisis in operating the business.
When the existing export channels were blocked, the client had turned to the domestic market and was making up for the blow from overseas exports within the domestic market, but COVID-19 brought the global economy to a halt and dealt the client a major blow.
Having arranged in-person meetings with several foreign countries, the client encountered the COVID-19 situation, all of the meetings were canceled, and the company missed an important opportunity to recover.
In addition, amid this situation, the client's company came under financial pressure from loan repayments, unpaid employee wages, and payments to partner firms, and due to a shortage of operating funds, it reached a point where the business could no longer be sustained.
2. Incheon Attorney | An Incheon Insolvency Attorney's Review of the Case
After reviewing the facts of the case of the client, who had made the difficult decision of corporate bankruptcy, the Incheon attorney provided assistance so that the corporate bankruptcy could proceed in a stable manner.
Incheon Attorney | Methods of Corporate Bankruptcy
The Incheon attorney explained that corporate bankruptcy is fundamentally a process in which, when a company's financial condition is beyond recovery, the company's assets are liquidated and its debts are dealt with through legal procedures.
The client's company was in a state of excess debt of approximately 4 billion won.
Accordingly, the client filed for the legal dissolution of the company through bankruptcy proceedings, and all creditors went through the processes of filing claims and claim investigation, after which the assets were liquidated.
Incheon Attorney | Legal Basis for Corporate Bankruptcy
The Incheon attorney assisted the client on the basis of the following legal provisions on corporate bankruptcy.
Debtor Rehabilitation and Bankruptcy Act
Article 306 (Cause of Bankruptcy of a Corporation) : With respect to a corporation, bankruptcy may also be declared when the total amount of its liabilities exceeds the total amount of its assets.
3. Incheon Attorney | Details of the Assistance
Through the 🔗corporate bankruptcy procedure, the Incheon attorney made the following arguments on behalf of the client in the course of the trial.
Incheon Attorney | Financial Paralysis Due to the Export Crisis
The Incheon attorney argued that the client's finances were rapidly paralyzed by the export crisis in major export markets such as the United States, China, Japan, and Australia.
The attorney explained that, along with the decline in exports, domestic and overseas contracts also failed to be concluded, so the company's cash flow deteriorated severely.
The client made steady efforts to get the company back on its feet.
The client explained that they tried to keep the company going by mobilizing various means of raising funds, such as personally taking out loans and using private loans, but ultimately failed.
Incheon Corporate Bankruptcy | Deficit Due to Loss of Operating Profit
The client's company had recorded operating losses for about two years, and due to various external factors, contract terminations and unconcluded contracts with business partners continued to occur.
As a result, the company's cash liquidity ran short, it could not maintain its capital turnover, and ultimately all business activities were suspended.
In particular, the attorney explained that the delays in supply contracts worsened the damage to the company's credibility, and relationships with existing business partners also deteriorated.
Incheon Corporate Bankruptcy | Departures Resulting From the Closure
The client explained that the closure resulted in a number of departing employees.
The client argued that, although the client had sought to bear the company's hardships together with the employees, due to problems with paying wages and unpaid wages, the client could only watch as many officers and employees left.
The attorney explained that this situation caused great suffering to the client and all the officers and employees, so a declaration of corporate bankruptcy was truly necessary.
4. Incheon Attorney | The Court's Declaration of Corporate Bankruptcy
As a result of the Incheon attorney's arguments, the court ultimately declared the client's corporation bankrupt.
The court recognized that the company was in a financially unrecoverable state and decided to declare bankruptcy after considering various circumstances, including the state of insolvency and the excess of liabilities.
In the end, the Incheon attorney sincerely represented the client's position and was able to swiftly conclude the complex bankruptcy proceedings, providing assistance so that no further harm would occur to the various stakeholders.
If you are considering corporate bankruptcy, as in this case, please reach an 🔗Incheon attorney and resolve it through a 🔗legal consultation booking.
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