Story of a Big Player from Gangnam

It was around evening time when Gun-Ho received a text message from Attorney Young-Jin Kim.

“The office manager’s name is Se-Gil Lee, and his phone number is 010-2485-0000.”

Gun-Ho made a call to the number right away.

“Office Manager Se-Gil Lee? I am referred to you by Kim&Jeong law firm. I’d like to have a consultation about the court receivership.”

“Are you planning to apply for the court receivership for your company?”

“No, it’s about a company that already started their court receivership process. I just like to know about the system.”

“Do you have their case number?”

Gun-Ho gave the office manager the case number that he received from the accountant’s office.

“Give me a moment.”

It took less than a minute before the office manager got back to Gun-Ho, and he said,

“It doesn’t look good. It’s about Mulpasaneop, right? The company has more than 300 creditors. The company incurs a lot of expenses as well after the court receivership started.”

“Umm, would you have lunch with me today? I know your office is in Seocho Town. I’m at Gangnam Station.”

“Oh, I am not in Seoul right now. I am in Anseong City.”

“Anseong City? I thought your office is in Seocho Town.”

“Oh, we took a case yesterday of a company that is about to start their court receivership. I have to work here until 10 pm and I won’t be in Seoul for a while.”

“Oh, I see.”

“If you need to see me anytime soon, why don’t you come to Anseong City? I’m at the company’s warehouse by myself.”

“A warehouse?”

Gun-Ho couldn’t understand why the office manager was at the company’s warehouse by himself.

“Sure. I can come to Anseong City.”

“I will be here. The company name is BC Teucksoogang.”

Gun-Ho wanted to see this office manager as soon as he could. He wanted to know about Mulpasaneop’s situation and also he had to learn more about the court receivership.

He entered BC Teucksoogang’s address into the GPS navigator before heading to Anseong City. Even with the help of GPS navigator, Gun-Ho got lost once and wandered a lot before he could finally find the BC Teucksoogang’s factory.

“F*ck! It was right under my nose.”

Gun-Ho drove into the company yard. There was a security guard office without a security guard. A few workers in uniform were walking around here and there as well. Gun-Ho made a call to the office manager.

“Where are you? I’m in front of the factory right now.”

“From the main entrance to the factory, do you see a small storage building behind the main factory?”

“Yes, I see it.”

“I am inside that building. Once you enter the storage building, you will see a place with a divider screen. I’m there.”

Gun-Ho grumbled,

“What in the world is he doing in that storage?”

Gun-Ho entered the warehouse building. He couldn’t see anybody there though at first, and then he saw a light at the backside of the building.

“Hmm. That should be him.”

Someone craned his neck out of the divider screen.

“Hey, it’s right here.”

“Are you the office manager—Mr. Se-Gil Lee?”

“That’s me. Please come over here. Be careful with the pile of pipes there.”

“What are you doing here?”

“Here?”

“This is the usual spot for my work. We don’t want the company workers or creditors to know that we are working on the court receivership. And because of the nature of my work, I have to quickly finish the work before anyone finds out. I just need a space where I can work with my computer. So this is good.”

“Oh, let me introduce myself to you. I am Gun-Ho Goo.”

“I am the office manager of Hanbit law office—Se-Gil, Lee.”

The two men exchanged their business cards to each other.

After exchanging business cards, they were about to sit on a chair when a man in his 30s came to the storage building. He was wearing a uniform; he was probably an employee of this company.

“Did you bring the vehicle registrations?”

“Yes, I did.”

“Seven of them? Including the forklift truck?”

“Yes, I did.”

“Why don’t you put the papers on the desk? I will take a look at them later since I have a guest here now.”

“Okay.”

The worker walked out of the storage building after placing the papers on the desk. He looked exhausted.

“He looked very tired.”

“That’s probably because he hasn’t been paid for a while now.”

“They are not being paid?”

“Most companies start their court receivership when they couldn’t pay their workers at least more than three months. They apply for the court receivership because they couldn’t handle the situation.”

“I’d like to know more about the system like how the court receivership works.”

“You can easily find the information from a book, or on the Internet.”

“I’d like to learn from the expert.”

“The expert?”

The office manager chuckled for a while.

“The court receivership is like an individual rehabilitation.”

“Individual rehabilitation?”

“If a person can’t pay for his debt any longer, the court helps him to pay off the debt gradually without being bothered by creditors, right? While he is paying off the debt, the court lets him keep a certain amount of money for his living expenses. That’s why they call the process as rehabilitation so the person can live a normal life again after paying off the debt.”

“Right.”

“The same thing applies to companies. The court protects the company from creditors while they could pay off the debt. They are the companies in rehabilitation.”

“Oh, I see. A worker came here earlier to give you the vehicle registrations. What is that for?”

“Those papers will be used when we apply for the court receivership.”

“Why do they need them?”

“In applying for the court receivership, the company needs to explain what made them be in this financial crisis and how much assets and how much debt they currently have.”

“To the court?”

“That’s right. To the bankruptcy department of Daejeon District Court.”

“A bankruptcy department?”

“Yes. The rehabilitation process is handled by the bankruptcy department of the court.”

“Oh, I see.”

“In order to show how much assets this company has, we need to show the court the company’s real estate registration and vehicle registration, etc., right?”

“I see. That’s why the worker brought the vehicle registrations to me.”

“Once the application is accepted by the court, an accountant who is appointed by the court will come to the company and verify all the papers and stuff. And then, they determine whether they would start the court receivership or not.”

“Hmm.”

“When I checked the Mulpasaneop’s case earlier on the court website, I saw that their creditors are over 300. The court will protect Mulpasaneop from those 300 creditors and let it pay off the debt gradually according to a plan they both agree on.”

“Do you think the court will let Mulpasaneop start the court receivership?”

“The accountant who is appointed by the court will determine it. He will determine if it is better to let the company continue their business and pay off the debt, or if it is better to close the business and let their employees go. The judge will then make a final decision based on the accountant’s investigated facts and professional opinion.”

“If someone wants to make an M&A of Mulpasaneop, that person must take over the entire debts of 300 creditors, right?”

“That’s right.”

“How much do you think that would be?”

“I have no idea. You will have to find the information at the court.”

Gun-Ho nodded. He thought he had a rough idea of how it worked now.

He then remembered what Chairman Lee told him the other day.

“If you want to catch a tiger, you must get into its mouth.”