Litigation

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We represented a Korean provider of broadband internet access services in a federal court action brought against it by a global wireless company that claimed $8.5 million for goods that our client allegedly ordered, but did not pay for. Soon after the commencement of the federal suit, our client declared bankruptcy in the Korean bankruptcy court. We moved, under Section 304 of the United States Bankruptcy Code, to stay the federal suit because of the pendency of the Korean bankruptcy action. In doing so, we raised the difficult issue of the effect on an American litigation of the foreign bankruptcy of a defendant. We extensively briefed the motion, analyzing Section 304 and the way in which Korean law views the extra-territorial reach of its own bankruptcy code. The Section 304 motion gave us substantial leverage for settlement of the underlying action. As a result, while the 304 motion was pending, the parties reached a settlement under which our client’s payment was capped at the amount that our client had already agreed to pay under the Reorganization Plan approved by the Korean bankruptcy court.