한국 도산기업의 M&A

Abstract

In Korea, after the IMF economic crisis in late 1990's, law and practice in bankruptcy procedures evolved dramatically. As for practice, two features are of importance: raise in discharge ratio in individual bankruptcy and implementing M&A in corporate bankruptcy. This article aims to elaborate on M&A schemes in Korean corporate reorganization procedures. The reason why the court of Korea applied M&A to corporate reorganization procedures is to prevent corporations under the procedure from entering into liquidation procedures. The procedure of M&A consists of ① preparation, ② selecting a buyer, ③ issuing stocks and paying debt, ④ closing. In the stage of preparation, the timing of M&A and formulation of strategy for M&A are important issues. Most of time, M&A starts after the conformation of reorganization plan. There are three types of M&A that are used in Korea corporate reorganization procedure: issuing stocks to non shareholders, asset acquisition and corporate division. Issuing stocks to non shareholders is the most common type and has its merit in that, through the type, the whole business of a corporation can exit from the reorganization and the buyer can succeed the achievement of target corporation. But when a corporation has multiple lines of business and it is impossible to sell every business to a single buyer, other types of M&A, asset acquisition and corporate division are used. In the stage of selecting a buyer, formulation of criteria for selection is of most important. The amount and structure of purchase money, the capacity of payment of buyers, the ability and vision for future development are among important factors. Current shareholders sometimes claim priority to be the buyer, but the court has been turn down the request. In the stage of issuing stocks and payment of debt, decision on the necessity of the interested party meeting and managing the meeting are of importance. If further modification of interest of creditors or shareholders is necessary, M&A procedure must include the interested party meeting. The claims to be swapped into stocks in the future raised difficult problems. In the stage of closing, the timing of closure of the reorganization procedure is important. As long as the reorganization procedure is going on, the buyer cannot run the target corporation. In Korea, the court closes the reorganization procedure as early as possible, though it depends on whether appeals to the court's conformation rulings on the new reorganization plan are raised or not.