Corporate bankruptcy filings have been surging this year amid the ongoing high interest rates, high inflation rates, and high exchange rates, so-called “triple highs”, and there are grim predictions that the number of corporate bankruptcy filings will continue to rise in the second half of this year as liquidity in the money market continues to dry up, raising concerns that construction companies and startups could collapse in the wake of real estate project financing (PF).
 

LIn, Hyo Jong Choi
 

Under such situation, corporate rehabilitation is a way for companies to survive the crisis, and two lawyers who are experts in this field, Hyo Jong Choi, head of the Insolvency Team at Lin, and Jung Yup Lee, a managing partner at LKB & Partners, were interviewed by The Bell.
 
The two lawyers agreed that the “deadline” for a smooth progress of corporate rehabilitation is the point at which the operating funds are left for at least 3 to 4 months. "There is a perception that the rehabilitation system completely takes away the management rights of the existing managers and ruins the company so that it cannot be revived by putting a 'stigma' on it as a rehabilitated company," said Choi. "However, if you go through the rehabilitation process at an early stage, you can actually save the company while preserving the management rights, so it is necessary to clear up misunderstandings about the rehabilitation system."
 
"Due to the abundance of liquidity during the pandemic, the number of rehabilitated companies has decreased significantly in the last three years, and many law firms have disbanded their insolvency teams," Choi said, adding, "It is important to have experience in corporate rehabilitation, not just from books or lectures, so it is helpful to meet and consult with a law firm with a lot of experience."
 
Choi is a big name in the field of insolvency and recently moved to Lin, where he has worked on the turnarounds of companies such as Eastar Jet, Ssangyong Motors, and Mesh Korea. Lee joined LKB in March of this year after serving as a deputy chief judge at the Seoul Bankruptcy Court, where he handled turnaround cases for big-name companies. Following the merger, Lin and LKB plan to build a strong insolvency team backed by Choi and Lee.

The original article can be found below.

THE BELL, Reported by Jihyo Kim
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