Barun Law LLC (Attorneys Choi Jae-woong, Jo Eun-ju, Lee Hye-Jun and Kim June-Young) recently provided legal advisory services to Woori Bank regarding a Funded Participation Agreement related to syndicated loan claims held against an insolvent debtor located in Saudi Arabia.

The Funded Participation Agreement is a contractual arrangement where a lender sells its creditor rights under a loan agreement to a participant at a discounted price. Through such an agreement, the lender secures liquidity before the debtor repays the loan, while the participant assumes a proportionate share of the future repayments, distributions, or dividends. This enables the lender to mitigate risks associated with the debtor's repayment by transferring such risks to the participant.

In this case, we assisted Woori Bank with the selection process of a preferred bidder for the Funded Participation Agreement on its overseas assets, valued at approximately USD 20,000,000 (KRW 28.6 billion). We also provided services such as drafting and finalizing the agreement, thereby supporting the bank in diversifying risks associated with non-performing loans held against insolvent debtors.

Furthermore, we worked closely with a local law firm in Saudi Arabia to monitor the progress of the liquidation proceedings for the insolvent debtor, assess residual assets, and review proposals from overseas preferred bidders. These efforts, along with comprehensive legal guidance for concluding the transaction, led to the successful completion of the Funded Participation Agreement.

As the prolonged economic downturn and global financial crises continue to escalate non-performing loans for financial institutions, proactive measures to manage and dispose of such assets are anticipated. Barun Law LLC provides efficient and comprehensive legal services for risk mitigation, including overseas distressed asset assessments, sales, and disposals. This case underscores the firm's commitment to delivering swift and effective solutions for the management of distressed assets.