A South Korean court on Thursday ordered a special investigation into troubled Daewoo Motor. To see whether it is worth putting into court receivership. The district court in the western city of Inchon also named Daewoo Motor's current chairman, Lee Jong-Dae, as the administrator.
"After going over documents submitted by Daewoo Motor to the court, the court finds that the company officials and labour union as well are willing to exert themselves to rescue the company," said a court ruling. The court said it had decided to start procedures required for placing Daewoo Motor into court receivership. "The decision means that the court calls for due diligence to see whether the company is able to turn itself around and thus whether court receivership is worthwhile. It does not necessarily mean the court decided to place it in court receivership," it said.
Accounting firms will carry out a two month due diligence investigation of Daewoo Motor. If the company presents a self-rescue plan and persuades creditors to give it a new chance, the court would agree to place it in court receivership, the court said. Otherwise, the company would be liquidated and the court would auction its assets and distribute the proceeds among creditors. Daewoo motor filed for court receivership on November 10. The move and a later court decision to freeze the carmaker's assets and liabilities gave daewoo motor a breathing space in its battle for survival.
