Case Studies
[Simplified Bankruptcy] Representing Company A, engaged in software development and supply, to proceed with corporate bankruptcy proceedings.
Law firm Veat (hereinafter referred to as "Veat") proceeded with the corporate bankruptcy proceedings of A, the developer of an application. 1. Overview of Debtor A A is a company that developed and supplied a schedule management app (hereinafter referred to as “P app”), and has been operating its business through government support programs and subcontracting projects for about 3 years after its establishment. 2. Status of A's Assets and Liabilities Due to A's business structure being based on technology, it does not possess any inventory or tangible assets. Moreover, intangible assets such as trademark registration, service registration, and patent registration are assessed as having almost no current value due to a significant period of inactivity. In contrast, the total amount of short-term borrowings is approximately 30 times the amount of assets, and interest continues to accrue, meaning the scale of liabilities could inevitably increase. 3. Circumstances Leading to Bankruptcy A operated both SW subcontracting supply and event agency businesses, and secured government support projects, making efforts to create various profit streams in order to secure the company's cash flow. Subsequently, after launching P app in 50 or so countries worldwide and receiving a rating of 4.8/5 on the Google Play Store, the company recorded excellent results and, in order to concentrate on the P app business, it cleared out all secondary businesses. However, when developing the next version of P app, a lack of available cash arose, and, due to a policy change by the Korea Credit Guarantee Fund, the company received a request for excessive principal repayment, effectively losing its operating ability. Ultimately, the company proceeded with the repayment of the maximum principal and settled the wages of the remaining personnel, and, around 2016, entered a de facto state of shutdown. 4. Corporate Bankruptcy Proceedings Director K attempted to secure 100 million won in investment and personally raised funds in order to resuscitate A, but, as continued loan interest was overwhelming, the company proceeded with corporate bankruptcy proceedings. Accordingly, the Seoul Bankruptcy Court recognized A’s state of inability to pay debts and the fact of over-indebtedness as the cause of bankruptcy and applied Article 305, Article 186 and Article 259 of the “Act on Insolvent Debtors' Rehabilitation and Bankruptcy”, and made a decision for ‘Simplified Bankruptcy.’ Article 259 (Requirements for Simplified Bankruptcy) If it is recognized that the amount of property belonging to the bankruptcy estate is less than 500 million won, the court shall, at the time of pronouncing bankruptcy, make a decision for simplified bankruptcy. Special Rules for Simplified Bankruptcy Procedure In the case of a simplified bankruptcy procedure, the date of the first creditors’ meeting and the date of asset investigation shall be merged unless there is a compelling reason (Article 186), and there shall be no auditing committee (Article 187). Distribution shall be made once, according to the provisions concerning the final distribution. However, additional distribution may be made (Article 189). 5. Conclusion and Implications Considering A’s situation, where the amount of debt was approximately 30 times the amount of assets and the company was in a de facto state of shutdown, it was necessary to proceed with the corporate bankruptcy proceedings swiftly to minimize losses. Accordingly, Veat demonstrated that A’s property belonging to the bankruptcy estate was less than 500 million won, and led to a decision for simplified bankruptcy. This case is significant in that it achieved a large reduction in costs and time through the omission of the creditors’ meeting and the distribution being made at the first meeting, utilizing the simplified bankruptcy procedure while the company's debt continued to increase. With the development of mobile platforms, there has been an increase in the creation of IT startups among young people, but, due to the nature of businesses with technology-based business structures, they are inevitably vulnerable to cash flow and have limitations in terms of management stability. Since it is often difficult for managers to objectively assess their management status, it is recommended that they seek assistance from legal professionals rather than deciding on their own regarding corporate bankruptcy procedures. Law firm Veat, led by Managing Director Choi Sung-ho, who served as the deputy director of the Startup Legal Support Team of the Korea Bar Association, provides objective and professional consulting to numerous startup companies, based on its extensive experience. Please contact Law firm Veat if you are considering corporate bankruptcy procedures. Thank you. Law firm Veat
[Advice] Providing legal advice to A Company operating a space rental business
Law firm Veat provided legal consultation to company A, which operates a space rental business, regarding refund response procedures. Veat provided consultation after comprehensively reviewing the space rental services provided by company A, so that company A can adequately respond to customer refund requests while complying with the 「Consumer Basic Act」 and 「Fair Trade Act」, and establish reasonable refund standards. Recently, new businesses with vague boundaries such as shared kitchens, shared offices, and study cafes have emerged. However, because there are no clear legal criteria, there are controversies regarding the applicability of related laws and tax issues. Law firm Veat is helping to improve regulations by reviewing the business models of various new businesses based on its extensive regulatory sandbox consulting experience and identifying relevant laws. If you need help with space rental businesses, please contact Law firm Veat. Thank you Law firm Veat
[Advisory] Providing legal advisory services regarding the establishment of a management participation type private collective investment scheme specializing in startup and venture. Law firm Veat
Law firm Veat provided legal consultation in the process of baseinvestments, an early-stage startup investment firm, forming a venture-focused private equity fund (startup venture PEF) called baseastring (hereinafter referred to as the "2nd fund"). This 2nd fund aims to provide practical assistance to startups from seed to Series A stages, not just investment, and aims to contribute to the development of the startup ecosystem through a virtuous cycle of investment. This aligns with Veat’s core philosophy of trusting clients' visions, supporting challenges, and growing together, and we were delighted to provide assistance. In the case of PEF establishment, legal review of the "Act on Capital Markets and Financial Investment Business" and the Enforcement Decree thereof, as well as communication with LPs, the Financial Supervisory Service, and the Fair Trade Commission, are very important elements. Veat provides professional and efficient legal advice based on its abundant practical experience in this area. If you need legal advice regarding the establishment of a private equity fund (PEF), please feel free to contact us. (View related article) Thank you. Law firm Veat
[Criminal & Patent] Obtained a "no charges" decision from the prosecution in a defamation case representing a client, a component manufacturer.
Law firm Veat (hereinafter referred to as "Veat") represented a client operating a parts manufacturing company and obtained a non-indictment decision from the prosecution in a case where the client was sued for defamation by K Company, established by a retired employee. 1. Overview of the Case K Company is a company established by a retired employee A from the client company. A had illegally leaked the parts manufacturing technology, which the client company was protecting as a trade secret, and filed a patent application upon retirement. In addition to this, K Company used the obtained patent rights to sue the client company for patent infringement, but Law firm Veat defended the client and obtained a non-indictment decision. The client filed a lawsuit (Moineulwon) seeking to invalidate the patent registration of K Company to clarify the injustice of the case. Law firm Veat represented the client and achieved the result of the K Company's patent being canceled. K Company’s CEO A, harboring resentment over the patent cancellation, sued the client company's CEO for defamation. 2. Judgment on Patent Infringement Law firm Veat, in the case where K Company sued the client company for patent infringement, argued that ▲ drawings related to the technology in question existed from three years before K Company registered the patent ▲ the technology patented was identical to the client company’s technology, clarifying that the client company had already been using the technology long before K Company filed the patent. This led to a non-indictment decision. Also, in the subsequent patent invalidation lawsuit, Law firm Veat argued that ▲ K Company’s CEO had free access to the in-house production line while employed by the client company ▲ K Company did not conduct any experiments when filing the patent application ▲ despite having no experience handling related technology, the development of the production system was completed in four months. This revealed that K Company’s patent registration was by an unauthorized party. 3. Judgment on Defamation K Company’s CEO A, harboring resentment over successive defeats and patent registration cancellation, sued the client company's CEO and key witnesses for defamation and false testimony. K Company claimed that the client company’s CEO and key witnesses ▲ falsely stated that they used the parts manufacturing technology corresponding to the patent in question, despite the fact that they had not used it ▲ falsely stated that drawings existed long ago, despite the technology not existing before K Company’s patent registration ▲ falsely stated that the technology used by the client company was an older method, despite being the same as the patented method, constituted defamation. In response, Law firm Veat argued that ▲ it is clear that the client company was the developer of the parts manufacturing technology corresponding to the patent in question ▲ K Company is asserting details of the original technology but failing to submit objective evidence ▲ the Supreme Court’s patent cancellation decision ▲ and by comprehensively examining the testimony of witnesses, K Company’s claim did not have sufficient evidence. 4. Conclusion The Wonju Branch of the Chuncheon District Prosecutor's Office, on December 24, 2019, accepted all the facts argued by Law firm Veat and issued a declaration of no charges against the client company. It is very difficult to prove a case of illegal leakage of trade secrets and filing a patent application. Law firm Veat, composed of engineers and lawyers, thoroughly analyzed the client's technology, actively secured forensic and other evidence, and clearly demonstrated that the client had been robbed of a patent. Patent disputes often lead to continued disputes even after the registration of patent rights, which can result in significant costs and time. Through this case, Law firm Veat once again confirmed that in cases of trade secrets and patents, knowledge of the technology in question, experience handling various technology-related cases, and a legal understanding are necessary for smooth litigation, requiring active responses. Thank you. Law firm Veat
[Consulting] Case of advising on an agreement between a company and a departing director
Law firm Veat received a request from executive A, who is about to resign, and drafted and provided a settlement agreement between the company and the retiring executive. The client, who had worked as a corporate executive at B Company for decades, requested legal advice to prepare for potential disputes arising from wanting to acquire shares or cash equivalent to 1% of the total issued shares of B Company after its listing, from corporate executive C. After reviewing the request in various legal aspects, Veat considered that the client would not pay any separate acquisition consideration for the shares or cash, and therefore, it would be appropriate to draft the document as a gift contract granting the right to receive shares or cash equivalent to 1% of the market capitalization of B Company or another entity actually listed at the time of listing. We then established the direction of the process, added clauses that align with the client's objectives, and completed the gift contract after thoroughly explaining it to the client. Law firm Veat was able to help prevent future disputes by providing this gift contract, which clearly defines all rights and obligations between the company and the executive upon resignation. Thank you. From Law firm Veat
[Consulting] Providing legal consulting to A company engaged in influencer commerce.
Law firm Veat provided legal consultation to Company A, which conducts business planning such as advertising agencies through famous influencers on SNS and drop shipping. With the number of Instagram and YouTube users increasing exponentially, the appearance of existing e-commerce is also shifting from the traditional open market and social commerce to newly emerging influencer commerce centered on SNS. Accordingly, Company A also prepared a new promotion and wanted to verify that there were no legal problems and comprehensively review contracts concluded with other companies to supplement any deficiencies. Veat provided Company A with ▲ advice on laws to be observed when conducting promotions ▲ review of contract terms with cosmetic sellers violating the contract ▲ advice on measures to deal with government regulations.
[Consulting] Providing consulting services to A Company, engaged in mobile advertising agency business, related to service terms and conditions and personal information processing.
Law firm Veat provided legal advice to A Company regarding its new business, which involves a mobile advertising agency, concerning consent to terms of service and personal information processing issues, and other procedures necessary for service provision. A Company, as a mobile advertising agency, was planning a service that provides rewards from affiliate companies when users watch advertisements. When providing the service, A Company would receive users' personal information from affiliate companies to provide rewards, and they wanted to review how to process this personal information. Veat conducted a Q&A regarding the method of consent to terms of service and the subject and method of obtaining consent for personal information collection, provided advice on the roles that A Company and B Company respectively should perform, and provided a personal information processing consent form. In November last year, the Korea Communications Commission imposed fines on about 10 companies related to customer personal information leakage. Following a series of personal information leakage incidents, consumers are also keeping a close eye on how companies handle personal information. Furthermore, the transfer of rights to use and utilize personal information in the advertising industry can be a sensitive issue. Veat's personal information specialist team is providing optimal consulting services related to corporate personal information processing, including internal policy preparation, education, and crisis response. If you need help with personal information related matters, please contact Law firm Veat. Thank you. From Law firm Veat
[Consultation] Legal consultation for revising service terms and conditions of IT companies
A, an IT company providing online manufacturing technology services, requested a legal review of concerning clauses while revising its terms of service. Terms of service are content prepared by one party to a contract in advance in order to enter into a contract with a number of counterparties. They may be subject to stricter standards for businesses than general contracts entered into individually by parties. Veat thoroughly reviewed relevant laws and regulations such as the “Act on Consumer Protection in Electronic Commerce, etc.,” the “Civil Act,” and the “Act on Regulation of Standard Contract Terms,” and provided legal advice regarding ▲ clauses restricting cancellations, ▲ clauses regarding the cancellation of contracts by minors, ▲ clauses regarding the company’s limitation of liability, etc. Recently, the Korea Fair Trade Commission (KFTC) has recommended that domestic and foreign online businesses correct 10 types of unfair clauses in their terms of service. As the trend increases where companies are prosecuted by the prosecution for failing to comply with the KFTC's corrective orders or proceed with administrative lawsuits, companies are realizing the need to conduct professional legal reviews in advance. Law firm Veat has experience providing legal advice regarding the revision and review of terms of service for numerous startups and companies.. We provide professional advice regarding the overall terms of service and are available to provide specialized advice and provide specialized advice and legal advice. If you need legal advice regarding the revision and review of terms of service, please contact Law firm Veat. Thank you. Law firm Veat 내용을 입력하세요
[Consultation] Providing legal consultation on headhunting contracts on behalf of AI developer A company, Law firm Veat.
Law firm Veat provided legal advice to A Company, an application software developer and supplier, regarding a headhunting agreement. A Company intended to enter into a headhunting agreement with B Company, where B Company would receive a certain fee if A Company hired candidates recommended by B Company. Headhunting refers to introducing high-level and professional personnel such as CEOs, executives, and technicians to companies that need them, and typically, both companies draft a headhunting agreement in this process. Accordingly, A Company commissioned Veat to review the headhunting agreement legally, and Veat provided legal advice regarding protection measures for A Company's confidential information obtained by B Company during the execution of this agreement, as well as measures and dispute resolution methods in the event of a significant defect in the candidate recommended by B Company. In addition, Law firm Veat has numerous cases of providing legal review and advice on related agreements, including headhunting agreements and confidentiality agreements, to protect corporate disputes and trade secrets. If you need general corporate legal advice or headhunting agreement legal advice, please contact Law firm Veat. Thank you. Law firm Veat
[Advice] Providing legal advice on a database (DB) security undertaking agreement to A company, which operates a service matching platform, Law firm Veat.
Law firm Veat provided legal consultation for A company’s database security agreement drafting, which is engaged in a service matching platform business. Due to the nature of A company, which focuses on matching experts with customers' individual characteristics and demands, employees inevitably handle customers' detailed personal information, and many employees have access rights to customers' personal information. Therefore, A company intended to secure a database security agreement to enhance employees' awareness of protecting customers’ personal information and trade secrets and to prevent accidents such as misuse, leakage, etc. of personal information. Veat drafted the security agreement by comprehensively reviewing A company’s services to ensure compliance with the “Personal Information Protection Act” and the “Act on Promotion of Information and Communication Network Utilization and Protection of Information” (Information and Communication Network Act) and to enable efficient database management while protecting customer data (personal information). This case is evaluated as practical consulting for companies' database management and security maintenance as the sensitivity regarding protection of personal information and trade secrets increases. If you need help with preparing internal policies, drafting security agreements, and providing personal information and trade secret education, please contact Law firm Veat. Thank you. Law firm Veat