bankruptcy law; preferences; right of avoidance; exceptions to avoidance; U.S. Bankruptcy Code; 파산법; 위기부인; 부인권; 부인권의 예외; 미국연방파산법
법학논총, v.37, no.1, pp.373 - 401
The trustee is allowed to avoid certain preferential transfers made or suffered by the debtor prior to bankruptcy. The goal of the preference legislation is to maximize estate value and preserve the effectiveness of the distributional scheme in bankruptcy. To prevent the debtor from undermining this goal by transferring its property to a creditor before bankruptcy, the trustee is allowed to avoid these transfers.
The system of dealing the preferential transfers before bankruptcy has some important differences between Korean law and U.S. Bankruptcy Code, one of which is that Korean law requires creditor’s awareness of the debtor’s insolvency for the transfers to be able to be avoided, whereas U.S. Bankruptcy Code does not.
U.S. Bankruptcy Code in principle allows the trustee to avoid any transfers relating to an antecedent debt made to creditors by the debtor within 90 days before the filing of the bankruptcy petition, and provide some exceptions to avoidance which is designed to encourage extensions of credit to debtor who is under difficult economic situation.
In this paper, I point out the unreasonableness in requiring creditor’s awareness of the debtor’s insolvency for the transfers to be avoided under Korean law and propose to do away with it. And, as an exception to avoidance of the transfers, I propose to stipulate the subsequent advances exception with some variations in Korean law. The purpose of this exception is to encourage creditors to deal with the failing business, and by doing so to be able to get the debtors in bad economic situation back to normal situation. For this purpose, I propose expansion of the §547(c)(4) exception to encompass prior as well as subsequent advances.