Seoul Attorney's Assistance | Corporate Bankruptcy Declared with the Assistance of a Seoul Attorney

The client operated a corporation that received food supplies from a food distribution company and dispatched staff to large supermarkets to sell the products.

After the COVID-19 outbreak, the supermarket operations were directly affected, and the company began to run a deficit.

As time passed, sales declined, and it became difficult to repay the principal and the loan interest, so the client decided to file for bankruptcy.

The client came to Daeryun's Seoul attorney in order to carry out the corporate bankruptcy smoothly.

■ Debtor Rehabilitation and Bankruptcy Act

▷ Article 305 (General Grounds for Bankruptcy)

(1) Where a debtor is unable to make payments, the court shall, upon an application, declare bankruptcy by a decision.

(2) Where a debtor has suspended payments, the debtor shall be presumed to be unable to make payments.

▷ Article 306 (Grounds for Bankruptcy of a Corporation)

(1) With respect to a corporation, bankruptcy may be declared even where the total amount of its debts exceeds the total amount of its assets.

(2) Paragraph (1) shall not apply during the existence of a general partnership company or a limited partnership company.

As the operation of all companies became difficult due to COVID-19, the client's company received a notice of contract termination from a business partner with which it had previously dealt.

After the contract ended, no new sales were generated for the client's company, and a deficit arose.

The funds available to operate the company were insufficient even to pay the employees' wages, and they fell far short of covering severance pay.

Daeryun emphasized points such as the fact that the client had taken out additional loans from a credit guarantee insurer in order to pay the employees' severance pay.

The client's corporation faced considerable difficulty at the same time that COVID-19 arrived in Korea.

As the importance of hygiene grew more than ever, factors important to the corporation's sales growth, such as food sampling sections at large supermarkets, were restricted.

There were also times when sales became entirely impossible, as operations were suspended at supermarkets visited by COVID-19 patients.

Daeryun emphasized that the corporation's sales had decreased sharply because of COVID-19.

The government provided subsidies to businesses whose operations had become difficult due to COVID-19.

The client also applied for and received that subsidy, but it was far from sufficient as operating funds.

The client tried to find self-help measures by starting a new business, but sales came in below expectations.

Daeryun emphasized that the client had made efforts to recover the company's operations.

The client, who had decided on corporate bankruptcy due to management difficulties caused by COVID-19, came to Daeryun's Seoul attorney to seek assistance.

The Seoul attorney provided the best possible assistance through close consultation with the client in order to obtain the corporate bankruptcy decision.

As a result, the court accepted the Seoul attorney's arguments and decided on the corporate bankruptcy.

If you are facing concerns over corporate bankruptcy like the case above, you may wish to visit Daeryun's Seoul attorney for a consultation.