Korean Bankruptcy Court in Seoul. (Image courtesy of Yonhap)
SEOUL, April 4 (Korea Bizwire) — The number of South Korean companies filing for court-led restructuring has surged in early 2025, reflecting mounting pressure from the prolonged economic slowdown. According to new court data, 196 companies applied for corporate rehabilitation during January and February — a 26% increase from the same period last year.
The spike comes as high-profile firms like Homeplus, the country’s second-largest discount retailer, luxury e-commerce platform Ballan, and several mid-sized construction companies have sought court protection in recent months, signaling deepening distress across industries.
Data released by the Supreme Court’s National Court Administration shows that corporate rehabilitation filings nationwide totaled 1,094 in 2024, up from 1,024 the previous year and nearly double the 661 recorded in 2022. Based on the pace of filings in the first two months of this year, experts anticipate that 2025 could see an even higher number of cases.
The number of South Korean companies seeking court-supervised restructuring has sharply increased in early 2025, highlighting the growing strain from the prolonged economic downturn. (Image created by AI/ChatGPT)
Corporate rehabilitation in South Korea is a legal process of restructuring under court supervision, intended to help viable companies avoid liquidation. Notably, e-commerce platforms TMON and Wemakeprice, both of which were embroiled in settlement delays last year, are currently undergoing rehabilitation proceedings.
To be eligible for court protection, companies must demonstrate that the value of continuing operations exceeds the value of liquidation. If the court determines a company has no path to recovery, it proceeds to bankruptcy.
The uptick in filings underscores the fragility of the post-pandemic recovery, as businesses across sectors struggle with weakened consumer demand, rising costs, and tightening credit conditions. With economic headwinds expected to persist into 2026, legal experts warn that more companies could find themselves on the brink.
M. H. Lee (mhlee@koreabizwire.com)
