Red Tape for Bankruptcy Cut

Procedures will be eliminated to speed up the bankruptcy process for insolvent nonbanking financial firms by four to six months, the Financial Supervisory Service said Sunday. The regulator also said that the Korea Deposit Insurance Corporation will now directly appoint the liquidator and the trustee for bankruptcies. Previously, the insurer passed its suggestions to the Financial Supervisory Commission, which approved them and submitted them to the court.

The service said that insolvent financial firms would now skip many of the bankruptcy procedures leading up to liquidation to shorten the total process. It said that since the Asian currency crisis, banks and credit unions have not been subject to those procedures, such as asset reorganizations and collections of creditor claims. The service also said that the change would expedite the recovery of the government's bailout funds.