13th Biennial Meeting - Penn State Law

TEXAS INTERNATIONAL LAW JOURNAL
VOL. 42:515
most well-known, having been the subject of much controversy and media coverage.
However, the IMF and ADB funded a group of local lawyers and judges known as
"Team 7" to address such problems and evaluate the Commercial Court's
decisions." 3 Further amendments to Indonesian law were enacted in 2004.
South Korea has made the most significant changes to the formal insolvency
laws of all the jurisdictions in this study. Its corporate sector, especially the closelycontrolled
chaebol conglomerates, was traditionally highly-leveraged, which proved
an immediate burden in the light of a post-crisis withdrawal of available credit. South
Korea agreed to enact substantial changes in law at the instigation of the IMF and
World Bank in the form of amendments to its tripartite insolvency legislation
covering liquidation, composition and reorganization. U.S. bankruptcy law
influenced many of these changes. Among notable reforms was the inclusion of
creditor committees in composition proceedings and management committees in
reorganizations, while the time limit for reorganizations was halved from twenty to
ten years. Many changes were intended to expedite reorganization procedures.
Further amendments were made in 2000 and 2001, the latter including formalizing an
out-of-court Workout Accord in the reorganization legislation to enable creditors to
file proceedings to bind foreign creditors. A more recent major change to insolvency
law was a Debtors' Rehabilitation and Bankruptcy Act (DRBA), which came into
effect on April 1, 2006, and for the first time consolidated the three parallel
insolvency acts. The new act further expedites corporate rescue processes, expands
the reorganization system and abolishes the Composition Act. The task for South
Korea may now be to ensure that its new legal framework is properly implemented,
for which further practitioner training is likely to be necessary.
Amendments to Philippines law were made in July 2000. Among the most
significant changes was the transfer of jurisdiction for rehabilitation and suspension
of payment cases from a state regulatory agency to the courts." Interim Rules of
Procedure for Corporate Rehabilitation were promulgated in December 2000, in far
more detailed form than the procedures under a prior Presidential Decree.
Suspension of payment cases and corporate rehabilitation have become more
common since the financial crisis, but delays remain a problem under the new regime
obtaining post-petition financing has remained difficult. Other reforms are currently
under discussion, notably a Corporate Recovery and Liquidation Act and a
Corporate Recovery Act. It is hoped that the former includes a provision for fasttrack
rehabilitation but congressional passage of these bills has been slow. The goal
for the Philippines is also to increase the institutional capacity of the judiciary and of
insolvency practitioners. Transferring jurisdiction for insolvency cases from the SEC
to the courts is understandable, but it ensures that the Philippines is the sole
jurisdiction in the study core where administrative and judicial enforcement capacity
have decreased since the financial crisis. Another goal for the Philippines will be to
better protect the rights of secured creditors.
A reform of the Taiwanese Company Law in 2001 streamlined the
reorganization procedures. These were the first major reforms to the procedures in
roughly thirty years. Among the changes to the law were reducing the length of the
reorganization process and requiring that companies using the procedures "be
103. Id. at 35.
104. See supra Part V(C)I.
HeinOnline -- 42 Tex. Int'l L.J. 552 2006-2007