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ENFORCEMENT DECREE OF THE CORPORATE RESTRUCTURING PROMOTION ACT

Presidential Decree No. 20349, Oct. 31, 2007

Amended by Presidential Decree No. 20653, Feb. 29, 2008

Presidential Decree No. 20947, Jul. 29, 2008

Presidential Decree No. 21480, May 6, 2009

Presidential Decree No. 21518, May 29, 2009

Presidential Decree No. 22220, Jun. 28, 2010

Presidential Decree No. 23047, Jul. 25, 2011

Presidential Decree No. 25278, Mar. 24, 2014

Presidential Decree No. 27115, Apr. 29, 2016

 Article 1 (Purpose)
The purpose of this Decree is to provide for the matters delegated by the Corporate Restructuring Promotion Act and matters necessary for the enforcement of said Act.
 Article 2 (Creditor Financial Institutions, etc.)
(1) "A person specified by Presidential Decree" in subparagraph 3 of Article 2 of the Corporate Restructuring Promotion Act (hereinafter referred to as the "Act") means any of the following persons:
1. A branch or agent of a foreign bank recognized as a bank under Article 59 of the Banking Act;
2. The Korea Development Bank established under the Korea Development Bank Act;
3. The Export-Import Bank of Korea established under the Export-Import Bank of Korea Act;
4. The Industrial Bank of Korea established under the Industrial Bank of Korea Act;
5. A securitization company defined in the Asset-Backed Securitization Act;
6. The Korea Asset Management Corporation incorporated under the Act on the Efficient Disposal of Non-Performing Assets, etc. of Financial Companies and the Establishment of Korea Asset Management Corporation;
7. The Korea Deposit Insurance Corporation or the financial company authorized to perform liquidation under the Depositor Protection Act;
8. The Korea Credit Guarantee Fund incorporated under the Credit Guarantee Fund Act;
9. The Korea Technology Finance Corporation incorporated under the Korea Technology Credit Guarantee Fund Act;
10. A private equity fund for improving corporate structure defined in Article 20 of the Industrial Development Act;
11. The Korea Trade Insurance Corporation incorporated under the Trade Insurance Act.
(2) "A person specified by Presidential Decree" in subparagraph 6 (b) of Article 2 of the Act means a finance company referred to in any subparagraph of Article 61 (2) of the Enforcement Decree of the Corporate Tax Act.
(3) "A person specified by Presidential Decree" in subparagraph 6 (d) of Article 2 of the Act means a person who has not been subject to a credit risk assessment by a creditor bank under Article 4 of the Act (hereinafter referred to as "credit risk assessment"), among persons who fall under any subparagraph of Article 4 (2).
 Article 3 (Selection, Change, etc. of Principal Creditor Bank)
(1) The amount of credit granted under the former part of subparagraph 5 of Article 2 of the Act shall be determined as at the end of the month immediately before the month in which a principal credit bank is designated.
(2) If a principal creditor bank is designated under the latter part of subparagraph 5 of Article 2 of the Act, the principal creditor bank shall be designated by an agreement among creditor banks: Provided, That the procedure for agreement nee not be followed, if the bank that has made the greatest amount of credit granted is designated as the principal creditor bank under the latter part of subparagraph 5 of Article 2.
(3) If a principal creditor bank is changed under the latter part of subparagraph 5 of Article 2, the principal creditor bank shall be changed by an agreement among creditor banks at the request of the relevant enterprise or a creditor bank.
(4) The principal creditor bank newly designated under paragraph (3) shall report the designation to the Governor of the Financial Supervisory Service established under the Act on the Establishment, etc. of Financial Services Commission (hereinafter referred to as the "Governor of the Financial Supervisory Service").
(5) Notwithstanding paragraph (3), the Governor of the Financial Supervisory Service may replace a principal creditor bank in either of the following cases, taking into consideration opinions of the relevant enterprise and creditor banks, the size and composition of credit granted by each creditor bank and of collateral acquired by each creditor bank, etc.:
1. Where creditor banks fail to reach agreement on the replacement of the principal creditor bank and request replacement of the principal creditor bank;
2. Where the relevant enterprise has an objection to the replacement of the principal creditor bank and further requests replacement of the principal creditor bank.
(6) The Governor of the Financial Supervisory Service shall give notice of the change of a principal creditor bank and grounds therefor under paragraph (3) or (5) to the relevant enterprise, creditor banks, and the Mediation Committee of Financial Creditors under Article 29 (1) of the Act (hereinafter referred to as the "Mediation Committee").
 Article 4 (Credit Risk Assessment)
(1) Pursuant to Article 4 (1) and (2) of the Act, each creditor bank shall conduct a credit risk assessment of each customer enterprise annually and may conduct a credit risk assessment of any customer enterprise occasionally, as necessary.
(2) Notwithstanding paragraph (1), a creditor bank need not assess the credit risk of any of the following enterprises, taking into consideration the necessity to conduct an administrative proceeding and the efficiency of the proceeding referred to in Article 5 (2) of the Act:
1. An enterprise against which a rehabilitation proceeding or bankruptcy proceeding is pending under the Debtor Rehabilitation and Bankruptcy Act; or an enterprise against which a rehabilitation proceeding or bankruptcy proceeding has been discontinued;
2. An enterprise against which an administration proceeding is pending under Article 5 (2) of the Act;
3. A customer enterprise to whom a creditor bank has granted credit of less than five billion won.
 Article 5 (Objection to Results of Credit Risk Assessment)
When an enterprise notified as having a sign of insolvency states grounds for an objection raised under the latter part of Article 6 (1) of the Act, the enterprise shall submit data evidencing its ability to repay debts.
 Article 6 (Monitoring of Enterprises with Sign of Insolvency)
"The period specified by Presidential Decree" in Article 7 of the Act means three months.
 Article 7 (Joint Administrative Proceedings by Council)
(1) "Financial creditors specified by Presidential Decree" in Article 9 (5) 3 of the Act means the financial creditors determined by the principal creditor bank to exclude from the formation of a council of financial creditors under Article 22 (1) of the Act (hereinafter referred to as the "Council") in order to conduct a joint administrative proceeding promptly and efficiently.
(2) The matters of which a principal creditor bank shall give notice under Article 9 (2) of the Act shall include the list of financial creditors and the grounds for excluding from the composition of the Council under Article 9 (5) of the Act.
(3) A person who provides data to the principal creditor bank under Article 10 (3) of the Act shall give notice of the fact that data is provided and grounds therefor, to the relevant financial creditor within ten days from the date the data is provided.
 Article 8 (Commencement of Joint Administrative Proceeding)
"The period specified by Presidential Decree" in Article 11 (1) of the Act means a period not exceeding 14 days from the date notice of convening a meeting is given by a principal creditor bank: Provided, That the period may be extended not exceeding 28 days, if it is necessary for adopting a resolution on the composition of financial creditors under Article 11 (1) 1 of the Act.
 Article 9 (Disclosure of Progress of Implementation of Corporate Improvement Plan, etc.)
(1) Pursuant to Article 15 (2) of the Act, a principal creditor bank shall disclose the progress of performance of a corporate improvement plan under Article 13 (1) of the Act through the web-site of the Mediation Committee.
(2) When a person who has submitted a written consent under Article 14 (2) 4 of the Act requests explanation about the progress of implementation of the agreement made with the enterprise under joint administratorship, under Article 12 (1) of the Act (hereinafter referred to as "enterprise under joint administratorship") on the implementation of a corporate improvement plan and relevant plans pursuant to Article 15 (4) of the Act, the person shall submit a document stating reasons for such request to the enterprise under joint administratorship.
 Article 10 (Composition, etc. of Business Evaluation Committee)
(1) The Business Evaluation Committee under Article 16 (1) of the Act (hereinafter referred to as the "Business Evaluation Committee") shall be comprised of the following persons:
1. One person appointed by the chairperson of the Mediation Committee, from among members of the Mediation Committee;
2. One person commissioned by the chairperson of the Mediation Committee, from among persons who have worked for an outside assessment institution defined by Article 176-5 (8) 2 or 3 of the Enforcement Decree of the Financial Investment Services and Capital Markets Act, who is expert in corporate restructuring;
3. One person commissioned by the chairperson of the Mediation Committee, from among persons qualified as an attorney-at-law, a certified public accountant, or a certified tax accountant with expertise in corporate restructuring;
4. One person commissioned by the chairperson of the Mediation Committee, from among persons who have worked for a corporation required to submit business reports under Article 159 (1) of the Financial Investment Services and Capital Markets Act, who is expert in corporate restructuring;
5. One person commissioned by the chairperson of the Mediation Committee according to a resolution of the Mediation Committee, from among persons who have expertise in corporate restructuring.
(2) The chairperson of the Business Evaluation Committee shall be elected by and from among committee members.
(3) Except as otherwise expressly provided for in this Decree, detailed matters necessary for the composition and operation of the Business Evaluation Committee shall be determined by the Business Evaluation Committee.
 Article 11 (Disclosure of Results of Evaluation of Joint Administrative Proceeding)
Pursuant to the main sentence of Article 16 (2) of the Act, a principal creditor bank shall disclose the results of evaluation under Article 16 (1) of the Act through the web-site of the Mediation Committee.
 Article 12 (Method of Operating Council, etc.)
(1) When a principal creditor bank intends to convene a meeting of the Council pursuant to the former part of Article 22 (3) of the Act, it shall give notice of matters concerning the date, time, venue, objectives, etc. of the meeting, to the financial creditors involved, the relevant enterprise with a sign of insolvency, and the Mediation Committee by not later than five days before the scheduled date of the meeting (or by not later than ten days, if a meeting is convened in order to deliberate and resolve on the matter referred to in Article 23 (1) 4 or 8 of the Act): Provided, That the foregoing shall not apply in cases of emergency, such as where it is necessary to determine promptly on whether to render assistance to the relevant enterprise with a sign of insolvency.
(2) When any financial creditor, other than a principal creditor bank, requests the principal creditor bank to convene a meeting of the Council under the latter part of Article 22 (3) of the Act, the creditor shall submit a document stating the matters specified and publicly notified by the Financial Services Commission, including the objectives of convening the meeting of the Council and the status of financial claims of each financial creditor, to the principal creditor bank.
(3) Upon receipt of notice under paragraph (1), the enterprise with a sign of insolvency may present its opinion, orally or in writing, to the Council through the principal creditor bank.
(4) If the principal creditor bank is not the creditor financial institution who has the highest value of financial claims against the relevant enterprise with a sign of insolvency, the principal creditor bank shall closely cooperate with the creditor financial institution so as to perform corporate improvement of the enterprise with a sign of insolvency promptly and efficiently.
 Article 13 (Purchase Price for Claims)
"The matters specified by Presidential Decree, including the value of the relevant enterprise" in the latter part of Article 27 (3) of the Act means the following matters:
1. The type, nature, and scope of the claims of which a dissenting creditor under the former part of Article 27 (1) of the Act (hereinafter referred to as "dissenting creditor) claims the purchase;
2. The type, nature, and scope of assets and liabilities of the relevant enterprise;
3. Other matters specified and publicly notified by the Financial Services Commission for the determination of a fair value for the claims of which a dissenting creditor claims the purchase.
 Article 14 (Composition of Mediation Committee, etc.)
(1) The Mediation Committee shall be comprised of the following persons:
1. One person appointed by the Chief Justice of the Supreme Court;
2. One person appointed by the chairperson of the Korea Financial Investment Association incorporated under the Financial Investment Services and Capital Markets Act;
3. One person appointed by the chairperson of an insurance association incorporated pursuant to the Insurance Business Act;
4. One person appointed by the chairperson of the Korea Chamber of Commerce and Industry established pursuant to the Chambers of Commerce and Industry Act (hereinafter referred to as the "Korea Chamber of Commerce and Industry");
5. One person appointed by the chairperson of the Korean Institute of Certified Public Accountants established pursuant to the Certified Public Accountant Act;
6. One person appointed by the chairperson of the Korean Bar Association incorporated pursuant to the Attorney-at-Law Act (hereinafter referred to as the "Korean Bar Association");
7. One person appointed by the chairperson of the Korea Federation of Banks established as an incorporated association with permission of the Financial Services Commission pursuant to Article 32 of the Civil Act (hereinafter referred to as the "Korea Federation of Banks").
(2) "Any finance-related statute specified by Presidential Decree" in Article 29 (3) 4 and 6 of the Act means the Act specified in any subparagraph of Article 13 (1) of the Enforcement Decree of the Banking Act.
(3) "Matters prescribed by Presidential Decree" in Article 29 (5) 1 of the Act means any of the following matters:
1. Differences in opinions as to the amount of financial claims or as to the exercise of voting rights by the Council;
2. Differences in opinions as to the adjustment of claims or as to the determination of the apportionment ratios of newly granted credit under Article 18 of the Act;
3. Other matters on which the Council files a petition for mediation with the Mediation Committee following a resolution passed thereby.
(4) "Matters specified by Presidential Decree" in Article 29 (5) 7 of the Act means the Mediation Committee's recommendations on the matters specified and publicly notified by the Financial Services Commission, including the method for the operation of the Council and the method for granting voting rights, in order to operate the Council efficiently.
 Article 15 (Operation, etc. of Mediation Committee)
(1) When the Mediation Committee receives a petition for mediation from a financial creditor pursuant to the former part of Article 27 (5) or Article 31 (1) of the Act, it shall give notice of the results of mediation and grounds therefor to the Council and the financial creditor who files the petition for mediation within ten days from the filing date of the petition: Provided, That the period may be extended by up to ten days once, if it is necessary to verify relevant facts or in extenuating circumstances.
(2) "If a committee member is involved in a transaction specified by Presidential Decree" in the latter part of Article 29 (7) of the Act means any of the following cases:
1. Where a committee member or a relative thereof (referring to a relative defined by subparagraph 1 (a) of Article 3 of the Enforcement Decree of the Monopoly Regulation and Fair Trade Act) is an executive, stockholder, or financial creditor of the relevant enterprise with a sign of insolvency;
2. Where the corporation to which a committee member belongs is a financial creditor or the relevant enterprise with a sign of insolvency;
3. Where the corporation to which a committee member belongs has an agreement for consulting or advisory on law, business management, etc. or any similar agreement made with a financial creditor or the relevant enterprise with a sign of insolvency.
(3) Except as otherwise expressly provided for in this Decree, detailed matters necessary for efficient operation of the Mediation Committee shall be determined by the Mediation Committee.
 Article 16 (Ombudsman Committee for Enterprises with Sign of Insolvency)
(1) The Ombudsman Committee for Enterprises with a Sign of Insolvency under Article 30 (1) of the Act (hereinafter referred to as the "Ombudsman Committee") shall be comprised of the following members:
1. One person appointed by the chairperson of the Korea Chamber of Commerce and Industry;
2. One person appointed by the chairperson of the Federation of Korean Industries;
3. One person appointed by the chairperson of the Small and Medium Business Corporation established pursuant to the Small and Medium Enterprises Promotion Act;
4. One person appointed by the chairperson of the Korea Federation of Banks;
5. One person appointed by the chairperson of the Korean Bar Association.
(2) If the Ombudsman Committee deems it necessary to settle a grievance or issue under Article 30 (4) 1 or 2 of the Act, it may authorize the chairperson or a member of the Ombudsman Committee to attend the relevant Council and present his/her opinions.
(3) Except as otherwise provided by this Decree, detailed matters necessary for efficient operation of the Ombudsman Committee shall be determined by the Ombudsman Committee.
 Article 17 (Special Cases concerning Restriction, etc. on Investment and Asset Management)
(1) "Provisions of other statutes specified by Presidential Decree" in Article 33 (1) 7 of the Act means the following provisions:
1. Articles 33 and 34 of the Enforcement Decree of the Korea Development Bank Act;
2. Articles 17-7 and 17-8 of the Enforcement Decree of the Export-Import Bank of Korea Act;
3. Articles 30-3 and 30-4 of the Enforcement Decree of the Industrial Bank of Korea Act.
(2) When the Financial Services Commission determines whether to grant approval under the latter part of Article 33 (3) of the Act, it shall take the following matters into account:
1. The plan for the disposal of stocks that exceed the stock holding limits under Article 33 (1) of the Act;
2. The status of management of the relevant creditor financial institution.
 Article 18 (Handling of Personally Identifiable Information)
If the Financial Services Commission deems it unavoidable in taking any corrective measure under Article 34 of the Act or performing any administrative affair related to the imposition of an administrative fine under Article 35 of the Act, it may handle data that contains a resident registration number, a passport number, or a foreigner registration number under subparagraph 1, 2, or 4 of Article 19 of the Enforcement Decree of the Personal Information Protection Act.
 Article 19 (Guidelines for Imposition of Administrative Fines)
Guidelines for the imposition of administrative fines under Article 35 (1) of the Act are as prescribed in Appendix.
ADDENDA
Article 1 (Enforcement Decree)
This Decree shall enter into force on the date of its promulgation.
Article 2 (Repeal of Other Statute)
The Enforcement Decree of the Corporate Restructuring Promotion Act (Presidential Decree No. 25278) is hereby repealed.
Article 3 (Applicability to Composition of Mediation Committee)
The committee member who falls within Article 14 (1) 1 shall be appointed after the expiration of the term of office of the committee member falling under Article 14 (1) 7, whose term of office expires first.
Article 4 Omitted.
Article 5 (Relationship to Other Statutes)
(1) Any citation of the former Enforcement Decree of the Corporate Restructuring Promotion Act (referring to the Enforcement Decree amended by the whole amendment (Presidential Decree No. 25945) to the Korea Development Bank Act; hereinafter referred to as the "former Enforcement Decree of the Corporate Restructuring Promotion Act") or any provision thereof, by any other Act or subordinate statute in force as at the time this Decree enters into force, shall be deemed a citation of this Decree or the relevant provision of this Decree in lieu of the former provision, if such relevant provision exists in this Decree.
(2) A citation of “creditor financial institution,” “enterprise with a sign of insolvency,” “council of creditor financial institutions,” “agreement for the performance of a business normalization plan,” or “Mediation Committee of Creditor Financial Institutions” under the former Enforcement Decree of the Corporate Restructuring Promotion Act by any other Act or subordinate statute in force as at the time this Decree enters into force shall be construed as a citation of “financial creditor,” “enterprise with a sign of insolvency,” “council of financial creditors,” “agreement for the performance of a corporate improvement plan,” or “Mediation Committee of Financial Creditors” under this Decree.
(3) A citation of “administrative proceeding,” or “joint administrative proceeding” under the former Enforcement Decree of the Corporate Restructuring Promotion Act by any other Act or subordinate statute in force at the time this Decree enters into force shall be construed as a citation of “administrative proceeding,” or “joint administrative proceeding” under this Decree.