Seoul Bankruptcy Court to lower the threshold for corporate bankruptcy by relaxing the rules on prepayment.

Deposit amount under 10 billion won 5 to 15 million won → 5 million won, ‘The Seoul Rehabilitation Court has eased the deposit payment criteria required by the court when a bankrupt company goes through the bankruptcy process, significantly lowering the threshold for corporate bankruptcy.’,
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Seoul Seocho-gu Seoul Rehabilitation Court appearance. [Image source=Yonhap News],
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, ‘The Seoul Rehabilitation Court announced on the 14th that it will partially revise and implement the criteria for corporate bankruptcy deposit payments. A deposit is the money that companies undergoing the bankruptcy process pay to the court.’,
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, ‘According to the existing criteria of the Seoul Rehabilitation Court for corporate bankruptcy deposits, the deposit amounts that must be paid to the court were set between 5 million won for cases with total debts less than 500 million won, and between 7 million to 15 million won for cases with total debts between 500 million won and less than 10 billion won.’,
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, ‘As a result, the need to relax the criteria for deposit payments was raised, as bankrupt companies with large debts but minimal assets were unable to utilize the bankruptcy process due to the burden of deposit payments, or faced delays in the bankruptcy process due to delayed deposit payments.’,
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, ‘According to the revised payment criteria, for cases with total debts less than 10 billion won, the deposit amount has been set at 5 million won, significantly easing the criteria for corporate bankruptcy deposit payments. The deposit amount for companies with total debts of 10 billion won or more has also been reduced from the previous 20 million won to 10 to 15 million won.’,
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, ‘An official from the Seoul Rehabilitation Court stated, “It is expected that the relaxation of the criteria for corporate bankruptcy deposit payments will activate the bankruptcy process for corporations in a financially distressed state.”‘,
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