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Launch of Daewoo Motor court receivership process approved

Launch of Daewoo Motor court receivership process approved

Posted November. 30, 2000 20:12,   


The Inchon District Court issued a ruling allowing Daewoo Motor to begin procedures for court receivership and appointed Lee Jong-Dae, chairman of the automaker, as a legal trustee Thursday. Consequently, Daewoo Motor decided to recommence operations at its Pupyong plant Dec. 4.

The court said that it issued the ruling to prevent economic chaos stemming from Daewoo Motor's collapse, but made clear that it was only a tentative decision starting due diligence to determine if the company is viable. The final decision will be made a couple of months later, it added.

But the court ruling virtually means that Daewoo Motor has been placed under court receivership. The court's statement is analyzed as a warning that it could reverse the decision and liquidate the company if a labor dispute erupts in the process.

Judges said that they will make a final decision on the launch of court protection for the car maker within two to three months and will fix a final plan on the fate of the company two to four months after that. Thus it is expected that the final blueprint determining the future of Daewoo Motor will come out by next June.

From now on, Chairman Lee will have to obtain court approval for any expenditures exceeding 10 million won with the exception of taxes and utility fees. Creditors of Daewoo Motor will complete reporting their bonds by Jan. 15 next year and will hold a meeting of related people Feb. 26.