In January 31, the Seoul Central District Court ordered the Samsung Group to repay more than 2.33 trillion won ($2.46 billion) to the 14 creditors of its defunct Samsung Motors, which was the country’s biggest-ever financial civil lawsuit. Samsung Group said yesterday that it will appeal that court ruling.
Samsung Motors applied for a court-administered debt restructuring program in June 1999, and Chairman Lee Kun Hee announced his plan to inject private money. Two months later, Samsung signed a deal with the creditors to cover a 2.45 trillion won debt by the end of 2000. Under the agreement, Lee handed over his 3.5 million shares of the unlisted Samsung Life Insurance Co. to the creditors and promised to list the company. However the insurance firm never went public, and creditors were unable to convert all their share to cash due to the large volume. Creditors filed a lawsuit in December 2005, claiming 5 trillion won including penalties.
One of the biggest issues on this trial was the validity of the agreement between Samsung Group and the creditors. Samsung Group alleged that the agreement is void because it was entered under duress. However the court rejected it.
As I’m a lawyer, it was very interesting who would represent Samsung Group and the creditors. There had been a furious ‘beauty contest” among prestigious Korean law firms (including my former firm Hwang, Mok, Park P.C.). The winner was…. Samsung Group was represented by Shin & Kim and the creditors was co-represented by Bae, Kim & Lee and Yoon, Yang, Kim, Shin & Yu.
Shin & Kim and Bae, Kim & Lee is one of the top litigation law firms. No one doubt of it. Yoon, Yang, Kim, Shin & Yu? There’s always been a rumor that Yoon, Yang, Kim, Shin & Yu is very closely connected with Korean goverment(among the creditors many public enterprises are included), but not confirmed.
One of the creditors reported that the legal fee was 5 billions won(about 4.5 millions USD) plus 0.65% of amount granted by the court ruling(not exceeding 10 billions won).
© 2008 Wonil Chung, a Korean Corporate Lawyer/Chung & Partners, a Korean Corporate Law Firm. All rights reserved. Some copyrights, photos, icons, trademarks, trade dress, or other commercial symbols that appear on this post are the property of the respective owners.