Attoreny’s of Atlas Legal successfully analyzed a complex 6-creditor garnishment competition in a KRW 20 billion construction project, securing approximately KRW 55 million in deposit withdrawal rights for a client undergoing bankruptcy proceedings.
Case Overview
A dispute arose over subcontract payment claims following the bankruptcy of the prime contractor in a KRW 20 billion waste-to-resource facility construction project commissioned by a local government. Six creditors filed provisional seizures on the construction payment claims, prompting the project owner to deposit approximately KRW 200 million with the court. Our client faced the challenge of securing deposit withdrawal rights while bankruptcy proceedings were ongoing.
Complex Creditor Relationship Analysis
Atlas Legal meticulously examined the multi-layered contractual relationships among the prime contractor, subcontractors, and sub-subcontractors, as well as the validity of each debt assignment agreement. We precisely calculated the scope of debt extinguishment under direct payment agreements and the secured claim amounts for each creditor to clearly identify our client’s rights.
Resolution of Key Legal Issues
The opposing parties argued that the debt assignments were invalid based on assignment prohibition clauses. We successfully rebutted this by proving the assignees’ good faith. Additionally, we analyzed the timing of direct payment agreements under the Fair Subcontract Transactions Act against the debt assignment notification dates to precisely determine the scope of debt extinguishment.
Rights Protection During Bankruptcy
Despite our client being in bankruptcy proceedings, we successfully secured approximately KRW 55 million in rights through the deposit withdrawal rights confirmation lawsuit. This achievement preserves assets for the bankruptcy estate, protecting the interests of creditors.
Legal Expertise
Atlas Legal has extensive experience in construction disputes, debt recovery, and deposit-related litigation. We systematically analyze complex multi-party creditor relationships to effectively protect our clients’ rights.