Ministry of SMEs and Startups Partners with Seoul Bankruptcy Court to Prevent Loss of SME Technologies

Regularization of Technology Transactions for Bankrupt Companies
Introduction of Fast-Track System for Small Business Bankruptcy and Rehabilitation

On May 20, the Ministry of SMEs and Startups announced that it had signed a memorandum of understanding (MOU) with the Seoul Bankruptcy Court to establish regularized technology transactions for bankrupt companies and to introduce a fast-track system for bankruptcy and rehabilitation procedures for small business owners.

In most cases, patents and other technologies held by companies in bankruptcy are not sold and are extinguished after liquidation. As a result, privately held technologies are lost, leading to economic losses. In addition, the extended period required to complete liquidation procedures has resulted in procedural inefficiencies.

To address these issues, since November of last year, the Ministry of SMEs and Startups has worked with the Seoul Bankruptcy Court to institutionalize technology transactions for bankrupt companies. The objectives are to preserve the technological competitiveness of SMEs by transferring technologies held by bankrupt companies to interested firms, to prevent redundant government fiscal investment, and to ensure the prompt execution of corporate bankruptcy procedures.

Under the bankrupt company technology transaction program, bankruptcy trustees entrust the brokerage of patents under their management to the Korea Technology Finance Corporation (KOTEC). KOTEC then uses its AI-powered technology transaction platform, 'Smart Tech Bridge,' to facilitate matching and contract signing. In February of this year, KOTEC received 27 cases for pilot brokerage from the Seoul Bankruptcy Court, successfully matching and supporting contract signing for 10 cases within three weeks. Of the matched technologies, six involved government-funded technologies: three were results of local government and central government R&D projects, while the remaining three were public technologies developed by universities and transferred to SMEs.

Additionally, the Ministry of SMEs and Startups and the Seoul Bankruptcy Court have agreed to establish a dedicated panel within the Seoul Bankruptcy Court to handle cases involving small business owners who have entered personal rehabilitation or bankruptcy procedures. This new panel, called the 'Dedicated Division for Agency-Filed Small Business Cases,' aims to reduce the burden on small business owners and expedite debt adjustment procedures. The ministry will support small business owners in need of debt adjustment by providing consultations with financial and legal experts, assisting with applications for tailored debt adjustment processes such as personal rehabilitation and bankruptcy, and offering help with application documentation and administrative costs.

If a small business owner who has received counseling applies for public debt adjustment procedures such as personal rehabilitation or bankruptcy through an attorney appointed by the Ministry of SMEs and Startups, the court will classify the case as an agency-filed case and conduct expedited review through the dedicated division (fast-track). This agreement with the Seoul Bankruptcy Court will initially be piloted for small business owners in the Seoul area. Depending on the results, the ministry is considering expanding the program to 13 other rehabilitation and district courts nationwide.

Vice Minister Kim Seongseop stated, "With the economy unstable and management difficulties for SMEs and small business owners intensifying, this MOU with the Seoul Bankruptcy Court marks a policy turning point that simultaneously aims to prevent the loss of bankrupt companies' technologies and to enable the swift recovery of small business owners." He added, "We will continue to support SMEs and small business owners so that they can overcome the crisis and once again become the main drivers of economic recovery."

This content was produced with the assistance of AI translation services.