Performing an Asset Check to See if the Company has Money to Pay for Damages

Why is an Asset Check Important? 
In Korea, it is normal to conduct and asset check before starting a lawsuit.  In order to recoup the damages incurred (money or value lost), a party must sue the Korean company for breach of contract for failing to provide payment. Then the court will issue a judgment awarding damages to the Victim. However, if the Korean company still refuses to pay, then there needs to be a judgement to enforce the damages award.

 

In that case, all assets under the company's name ― such as real property (land, buildings, etc.) and private property (inventory, cars, furniture, etc.) ― and company assets held by third parties (e.g. savings accounts, rental deposit, etc.) can be used towards enforcing the judgement and receiving the money owed.

 

In order to avoid a situation in which the Victim expends significant time, money, and effort to win a case, only to find that the Korean company has no assets to pay for the award, it is a top priority to conduct a property check on the breaching party.

 

Procedures and Methods of Conducting the Asset Check

  

What assets a Korean company has is normally considered confidential information. However, it is possible to conduct a property search by an attorney representing a victim who is preparing to sue the company for breach of contract. It is actually very common for the victims to request the attorney conduct an asset check on the breaching party.

  

The asset check is conducted by an asset checking company (not the law firm) and the cost is KRW 200,000 to 300,000 (approximately USD 176 to 265) and it takes approximately 2 to 3 weeks. The asset checking company will then present a report detailing all real estate (e.g. land, buildings), personal property, rental deposits, bank accounts that is present under the Korean company's name.

If the Korean company turns out not have any assets, or the assets will not cover the money owed, it is a good idea to give up pursuing the lawsuit. However, this means that the victim is basically giving up their rights to receive the judgment. Presently, in the situation where it is expected that the company will have assets in the future, it is possible to receive a judgement awarding damages, and to renew the judgment to enforce every 10 years at a minimal cost.