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The Hotchpot Rule in Korean Insolvency Proceedings
DC Field | Value | Language |
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dc.contributor.author | Han, Min | - |
dc.date.accessioned | 2014-01-06T07:09:35Z | - |
dc.date.available | 2014-01-06T07:09:35Z | - |
dc.date.issued | 2007 | - |
dc.identifier.citation | Journal of Korean Law, Vol.7 No.2, pp. 445-484 | - |
dc.identifier.issn | 1598-1681 | - |
dc.identifier.uri | https://hdl.handle.net/10371/85138 | - |
dc.description.abstract | A new consolidated insolvency law called the Debtor Rehabilitation and Bankruptcy Law
(DRBL), which became effective in the Republic of Korea on April 1, 2006, has discarded the principle of territoriality under the previous insolvency laws and adopted the so-called modified principle of universality. At least for the purpose of Korean laws and Korean insolvency proceedings, therefore, the effect of an insolvency proceeding which has commenced in Korea would have effect on the debtors assets situated in a foreign country. However, whether and to what extent a Korean insolvency proceeding would be recognized and enforced in a foreign country, in which the debtors assets are situated, depends upon the laws of that foreign country. If the recognition or enforcement of a Korean insolvency proceeding is wholly or partially denied by that foreign country, what measures could be taken in a Korean insolvency proceeding in order to achieve, as much as possible, the equality of payments between a creditor who received payment outside of Korea and other creditors who receive payments in a Korean insolvency proceeding? One such measure would be to apply the rule of payment adjustment newly established under Article 642 of the DRBL, which is similar to the hotchpot rule embodied in Article 32 of the Model Law. Article 642 of the DRBL primarily addresses payment made to a creditor out of a concurrent foreign proceeding and attempts to adjust payment to be made to such creditor in a Korean insolvency proceeding after taking into account the amount of such payment made abroad to the same creditor. As the hotchpot rule incorporated in Article 642 of the DRBL is rather new in Korea, there are not yet any court cases or established court practices at this juncture. Scholarly discussions are just beginning. Thus, this article attempts to identify issues which will likely arise in connection with the application of Article 642 of the DRBL and presents the authors analyses and observations. One of the most notable observations of the author in this article is that despite the lack of a clear statutory provision, payment recovered from collateral situated outside of Korea, particularly in the case of Chapter 2 rehabilitation proceedings of the DRBL which are similar to Chapter 11 proceedings of the U.S. Bankruptcy Journal of Korean Law | Vol. 7, 445-484, June 2008 * This Article has been prepared based on the authors existing article written in Korean, International Finance and Cross-Border Insolvency (2) - Concerning the Hotchpot Rule, 28 BFL (Center for Financial Law of Seoul National University, March 2008). This Article, however, has added certain new sections and reorganized and refined the discussions in said article while the existing observations and views of the author are maintained. ** The Author is a partner at Kim & Chang. He received an LL.B. in 1981 from Seoul National University College of Law and an LL.M. in 1992 from Cornell Law School. He is a member of the Korean and New York bars. Code, should not be prejudiced by Article 642 of the DRBL. In addition, in the authors view, as Article 642 of the DRBL does not address payment made out of the debtors overseas assets where there is no concurrent foreign insolvency proceeding, it is necessary to establish and apply another rule based on the theory of unjust enrichment —i.e., disgorgement of such payment back to the insolvency estate of the Korean insolvency proceeding —in order to achieve equality of payments within a Korean insolvency proceeding vis-a-vis other creditors of the same class and ranking in the Korean insolvency proceeding. | - |
dc.language.iso | en | - |
dc.publisher | BK 21 law | - |
dc.subject | Debtor Rehabilitation and Bankruptcy Law | - |
dc.subject | UNCITRAL Model Law on Cross-Border Insolvency | - |
dc.subject | principle of territoriality | - |
dc.subject | principle of universality | - |
dc.subject | bankruptcy proceeding | - |
dc.subject | rehabilitation proceeding | - |
dc.subject | rule of payment in concurrent proceedings | - |
dc.subject | hotchpot rule | - |
dc.subject | rule of payment in concurrent proceedings | - |
dc.title | The Hotchpot Rule in Korean Insolvency Proceedings | - |
dc.type | SNU Journal | - |
dc.citation.journaltitle | Journal of Korean Law | - |
dc.citation.endpage | 484 | - |
dc.citation.number | 2 | - |
dc.citation.pages | 445-484 | - |
dc.citation.startpage | 445 | - |
dc.citation.volume | 7 | - |
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