The Seoul Bankruptcy Court has recently issued a bankruptcy declaration for Haru Management Limited, the company associated with Haru Invest, which abruptly suspended virtual asset withdrawals in June 2023. This case (2024Hahap100259) has significant implications for creditors, many of whom are foreign nationals, as they must now file their claims to secure their rights during the bankruptcy process.

Overview of the Case

Haru Management Limited is undergoing bankruptcy proceedings following allegations of mismanagement and asset misappropriation. The company’s abrupt suspension of withdrawals affected thousands of depositors, many of whom are international creditors holding substantial claims.  

Bankruptcy Filing Process Under Korean Law

Bankruptcy proceedings in Korea involve several key steps:

1. Document Preparation: Creditors must compile evidence supporting their claims, such as account statements and correspondence with the debtor.

2. Submission of Creditor’s Claim: Claims must be filed with Seoul Bankruptcy Court either in person, by mail, or electronically via the Korean Electronic Litigation System.

3. Verification and Meeting: Once filed, the court reviews the claims, and creditors are required to attend a creditors’ meeting.

4. Asset Investigation and Distribution: The bankruptcy administrator investigates, recovers, and liquidates the debtor’s assets. If distributable assets are available, they are allocated according to the priority of claims or, for claims of equal priority, proportionally based on the amount of the claim.

Failure to submit proper documentation could result in exclusion from the proceedings. 

Our Legal Services

Foreign creditors may find this process complex due to language barriers and the intricacies of Korean bankruptcy law.  Our legal team is uniquely positioned to assist foreign creditors with filing their bankruptcy claims in compliance with Korean bankruptcy law. We offer:

• Initial Consultation: Reviewing documentation and assessing the validity of your claim.

• Filing Creditor’s Claim to Seoul Bankruptcy Court: Ensuring all necessary documents are prepared, and filed accurately and on time.

• Court Representation (Optional): Acting as your legal representative during the entire bankruptcy proceedings, including attending the creditors’ meeting on your behalf, if necessary.

• Ongoing Support (Optional): Advising on the recovery process and your rights as a creditor.

While the bankruptcy administrator could provide basic guidance, professional legal support can ensure your claim is filed correctly and maximizes your chances of recovery.

Our firm has successfully handled bankruptcy claim filings for many foreign creditors. Below is one of the receipts of bankruptcy claims report that we handled.

Actual Case: Receipt of Bankruptcy Claims Report

Schedules to Remember

• Claim Filing Deadline: January 31, 2025

  • However, under Korean bankruptcy law, it is still allowed to submit a bankruptcy claim report after this filing deadline, provided it doesn’t pass the final deadline for distribution eligibility.  The court has not yet set this final deadline.

  • Additionally, unlike rehabilitation proceedings, creditors in bankruptcy proceedings are not required to provide a justified reason for late submission.  As long as the claim is filed, examined, and recognized by the court before the final deadline, the creditor can participate in the distribution.

  • Given that the claim examination process may take time, our office recommends filing well in advance of the claim examination date.

• 1st Creditors’ Meeting: February 11

• Claim Examination: TBA (The Seoul Bankruptcy Court, on January 22, has canceled the previously scheduled date of February 11 and decided to reschedule it for a later date)

Conclusion

If you are a foreign creditor affected by the Haru Management Limited bankruptcy and need assistance navigating the claim process, our experienced team is here to help. Contact us today for a consultation to discuss how we can support you in protecting your financial interests.

Disclaimer: This blog post is intended for informational purposes only and does not constitute legal advice. Please consult with a qualified attorney for advice specific to your situation.

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