Background
Our client, a manufacturer, supplied approximately KRW 670 million worth of products to a counterparty. After taking delivery of everything, the counterparty deliberately defaulted, and just before doing so transferred its own assets (receivables) to acquaintances so that our client could not be paid.
What Was at Stake
Where a debtor unable to pay its debts moves assets out of reach, that is a "fraudulent transfer" and can be revoked. The key was to prove matters including that the acquaintances who received the assets knew of the circumstances.
How Changchun Helped
Acting for our client, Changchun brought a claim against the counterparty for payment for the goods together with an action against the recipients of the assets for revocation of a fraudulent transfer, focusing the proof on their ability to know of the counterparty's insolvency.
The court accepted all of Changchun's arguments, revoked the assignment of the diverted receivables and ordered the recipients to compensate our client for the amounts received. The case shows that assets deliberately concealed can be brought back through legal process. (Outcomes depend on the facts of each case and may differ.)