16 National Report for the Republic of Korea (South Korea) »
Soogeun Oh, Kyungjin KimFrom: Ranking and Priority of Creditors
Edited By: Dennis Faber, Niels Vermunt, Jason Kilborn, Tomáš Richter, Ignacio Tirado
This chapter discusses the law on creditor claims in South Korea. Under South Korea’s Debtor Rehabilitation and Bankruptcy Act (DRBA), insolvency claims are classified into secured, unsecured, and administration claims. Unsecured claims are divided according to their level of priority. As administration claims can be paid on maturity without being impaired in the insolvency proceedings, a principal concern is determining whether or not a certain claim is an administration claim. The 2009 amendment to the DRBA gave new loans borrowed under the court’s permission a kind of priority to be paid before other common benefit claims in cases where a company’s property is insufficient to pay all common benefit claims. The chapter then deals with insolvency claims, administration claims, and non-enforceable claims in turn. Each section covers: the definition and scope of the claim; rules for submission, verification, and satisfaction or admission of claims; ranking of claims; and voting and other participation rights in insolvency proceedings.