1. The Role of the Court Officer in Insolvency Proceedings
International Association of Korean Lawyers Conference
The Role of the Court Officer in Insolvency Proceedings
September 21, 2019
Seoul, Korea

2. Debtor Rehabilitation And Bankruptcy Act(DRBA)
The insolvency proceedings are stipulated in the following articles of the Act:
General provisions: Articles 1-33
Rehabilitation procedures: Articles
Bankruptcy procedures: Articles
Personal rehabilitation procedures: Articles
International bankruptcy: Articles
Penal provisions: Articles

3. Overview Rehabilitation process Custodial Committee
Custodian, DIP, CRO
Creditors’ Consultative Council
Inspectors
Bankruptcy process
Trustees in Bankruptcy
Meeting of creditors
Audit Committee
Individual Rehabilitation
Rehabilitation Commissioner

4. Rehabilitation Process Officers
Custodial Committee:
3-15 people belong to the court(DRBA §15)
The members are appointed by the head of a rehabilitation court
Qualifications(DRBA §16-3)
1. Attorneys-at-law or certified public accountants
2. At least 15 years of experience in a bank and a corporation
3. Experience as executive officers
4. Master's or higher degree in law, business etc.

5. Rehabilitation Process Officers
Custodial Committee:
Authority(DRBA §17)
1. Suggest opinions on the appointment of other court officers
2. Supervise and evaluate of other court officers’ performance
3. Examine of the draft rehabilitation plan and repayment plan
4. Compose of the creditors' consultative council
5. Assemble related persons and the meeting of creditors

6. Rehabilitation Process Officers
Custodian:
Perform as the debtor
Manage and dispose the property exclusively
After approval of the rehabilitation plan, the custodian appoints the CEO as the custodian under the court’s approval(in practice)
DIP (Debtor In Possession):(DRBA §74-2)
The court shall appoint representatives as custodians unless there is a particular problem.

7. Rehabilitation Process Officers
DIP(Debtor In Possession):(DRBA §74-2)
Supervision System
Court Custodial Committee CRO*Auditor DIP
CRO(Chief Restructuring Officer):
Custodians can appoint legal and corporate governance experts
Creditors’ Consultative Council presents opinion about appointment procedure
Difficulty in selecting competent CRO

8. Rehabilitation Process Officers
Creditors’ Consultative Council:
Composition(DRBA §20)
shall be composed of not more than 10 persons
composed of major creditors of the debtor after an application for commencement of rehabilitation procedures or a petition for bankruptcy is filed (waiver: the debtor is an individual or a small and medium business entrepreneur).

9. Rehabilitation Process Officers
Creditors’ Consultative Council:
Function(DRBA §21)
1. Present opinions about rehabilitation procedures and bankruptcy procedures
2. Present opinions with respect to the selection, appointment or dismissal of custodians, trustees in bankruptcy and protective custodians
3. Present opinions with respect to the appointment of the auditor of a debtor who is a corporation
4. Claim the physical inspection of the actual governance of any company

10. Rehabilitation Process Officers
Inspectors(DRBA §87-2):
The inspectors shall be appointed among persons who have knowledge and experience necessary to perform inspection but there should not be conflict of interest.
Accountants are appointed mostly when the court makes a decision on commencement of rehabilitation procedures
At the 1st meeting for interested persons, inspector’s report should be announced. Going concern value should be greater than the liquidation value.

11. Bankruptcy Process Officers
Trustees in Bankruptcy:
Authority of managing and disposing of a bankruptcy estate
Become a party to lawsuit involving the bankruptcy estate
Submit the accounting report for the meeting of creditors
Distribute dividends

12. Bankruptcy Process Officers
Meeting of Creditors:
Court decides the date of the first meeting of creditors when bankruptcy is declared
Court shall call the meeting of creditors, ex officio or upon the request of the trustee in bankruptcy or any member of the audit committee
Creditors can request explanation to debtor
Request the dismissal of trustee in bankruptcy and audit committee

13. Bankruptcy Process Officers
Audit Committee:
The members of the audit committee shall be appointed at an meeting of creditors
Experts in law and corporate governance who are disinterested with respect to the bankruptcy procedures
Oversee the performance of the duties of the trustees in bankruptcy
Inspect the current state of the bankruptcy estate at any time

14. Individual Rehabilitation Process Officers
Rehabilitation Commissioner(DRBA §601) :
Court appoints the rehabilitation commissioner
Responsibilities
Inspecting the debtor’s properties and income
Exercising the avoidance power and participating in the procedure
Holding assemblies of individual rehabilitation creditors

15. Bio. Tae yeon Kim Partner at K&partners
Trustee in Bankruptcy at Seoul Bankruptcy Court