1. Case Overview
The debtor company, a corporation engaged in courier and freight transportation, recorded sales of approximately 28.2 billion KRW in 2024. However, following the end of COVID-19, it faced severe management difficulties due to a sharp drop in delivery volume, contract terminations with major clients, and unpaid transportation fees. Specifically, after a contract with a client representing 30% of sales ended and notifications of non-payment were received, continuing operations became virtually impossible. To resolve approximately 4.8 billion KRW in debt across 28 creditors, the company applied for bankruptcy at the Incheon District Court with the help of Law Firm Theo. Following the commencement of proceedings and asset investigation, the case was concluded on April 20, 2026, with an "Ishi-pyeji" (discontinuance) decision.

2. Case Specifics

This case was unique because the company held 1.6 billion KRW in receivables that were practically uncollectible due to non-payment by major clients. Additionally, the company mixed funds with a subsidiary that was also undergoing bankruptcy in the same court, making it critical to clarify property relationships and protect preferential creditors (employees and tax authorities). Furthermore, the CEO was under investigation by the Incheon Police Agency following a criminal complaint. Law Firm Theo defended the criminal proceedings while properly executing the bankruptcy process to establish a foundation for the debtor's economic recovery. It was confirmed that the bankruptcy estate was insufficient to cover even the procedural costs, leading to the recognition of discontinuance grounds under Article 545, Paragraph 1 of the Debtor Rehabilitation and Bankruptcy Act.

3. Legal Strategy and Assistance

Law Firm Theo prepared detailed questioning for the representative to transparently report the company's history, operations, causes of bankruptcy, and financial status, laying the groundwork for swift proceedings. We specifically organized the 1.6 billion KRW in receivables and urged the bankruptcy trustee to collect unverified fees to pay preferential wage and tax claims. We also untangled the financial overlap with the subsidiary and provided an accurate inventory of remaining assets, including 15 vehicles. Despite the ongoing criminal complaint, we successfully persuaded the court that the CEO was not evading responsibility but was instead pursuing a clear liquidation process to protect creditors and prevent future legal disputes.

4. Outcome

As a result of Law Firm Theo’s systematic assistance, the Incheon District Court recognized that the bankruptcy estate was insufficient to cover costs and declared an "Ishi-pyeji" (discontinuance) on April 20, 2026. This allowed the company to end the lengthy process early and move toward legal discharge. Preferential creditors were protected, and a legal foundation for future rights was established. Despite the criminal investigation, the CEO earned the court's trust through sincere participation, minimizing legal risks and securing a path for a fresh start.

 ──────────────────────────