The Daegu Chamber of Commerce and Industry (Chairman Lee Jae-ha) on the 7th requested the prompt establishment of the Daegu Rehabilitation Court, which exclusively handles the rapidly increasing insolvency cases, to more than 10 political and governmental bodies including the People Power Party, the Democratic Party of Korea, the Supreme Court, and the Ministry of Economy and Finance.
The Rehabilitation Court is a specialized insolvency court that exclusively oversees rehabilitation and bankruptcy cases, playing a role in supporting individuals and companies facing economic crises to quickly return to economic activities.
As insolvency cases become increasingly complex and diverse, the Seoul Rehabilitation Court was first opened in March 2017 in South Korea, and courts in Busan, Daegu, Daejeon, Gwangju, and Suwon?locations of high courts?have been promoted together. However, only Busan and Suwon courts were established this March. Currently, a bill to establish rehabilitation courts in the three regions of Daegu, Daejeon, and Gwangju is being discussed again in the National Assembly.
The Daegu Chamber of Commerce emphasized that Daegu has the largest jurisdictional population and a higher number of corporate cases compared to other regions, making the need for a rehabilitation court even greater. The proportion of small and medium-sized enterprises and self-employed individuals is also the highest among metropolitan cities, raising concerns that the number of marginal companies could surge if the economic downturn continues, and that without prompt corporate rehabilitation, the impact on the regional economy could be even more severe.
Amid the surge in rehabilitation and bankruptcy cases due to the COVID-19 pandemic and high interest rates, the number of insolvency cases in Daegu increased by 2,045 in the first half of this year compared to the previous year, marking the largest increase among regions without a rehabilitation court. In fact, in Seoul, where a rehabilitation court is established, the average processing time for corporate rehabilitation cases is 29.2 days, only about half of the national average of 50.5 days.
Recently, it has been reported that Daegu was excluded from the “Partial Amendment to the Act on the Establishment and Jurisdiction of Courts at Each Level” proposed in the National Assembly, raising concerns that the establishment of a rehabilitation court in our region might be canceled again.
A representative of the Daegu Chamber of Commerce stated, “Daegu requires a rehabilitation court more than other regions in terms of judicial demand and economic structure. We had high expectations that a rehabilitation court would be established in Daegu this year, but it was ultimately canceled. The rehabilitation court must be promptly established so that local companies can return to economic activities through swift judicial procedures and contribute to revitalizing the regional economy.”
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