Bankruptcy Law

Financing shall be deemed secured if: a) it has priority over unsecured debts at the time of filing the petition for financing; b) it is secured by pledging a debtor’s asset that is not encumbered by another pledge; c) it is secured by pledging a debtor’s asset that is encumbered by another pledge of a higher priority; d) it is secured by pledging a debtor’s asset that is with a higher or equal priority to another pledge if the court establishes that the rights of the pledgee holding the existing pledge are not affected, or if the pledgee consents to the existence of another pledge of a higher or equivalent priority. The debtor must ensure the protection of the pledgee's rights in the existing pledge to ensure the satisfaction of the pledgee’s rights from the pledged property, including protection from a decrease in the value of the pledged property, the pledging to others of assets subject of the existing pledge, or the debtor's use, sale, or lease of the pledged asset while pledged; or e) it is secured by any other form of secured financing specified by the Regulations. Article 185 Unsecured Financing in the Protective Settlement Procedure and Financial Restructuring Procedure The court's approval shall not be required for obtaining unsecured financing in a protective settlement procedure, small debtors' protective settlement procedure, financial restructuring procedure, or small debtors' financial restructuring procedure. Article 186 Provisions for Secured or Unsecured Financing in the Liquidation Procedure The court shall, upon the trustee's petition that is filed along with a supporting expert report and after obtaining the creditors’ acceptance in accordance with Article 108 of this Law, approve the secured or unsecured financing in the liquidation procedure or the small debtors' liquidation procedure if deemed necessary for the protection of the bankruptcy assets or for the increase of their sale proceeds. Article 187 Provisions for Secured or Unsecured Financing in the Liquidation Procedure Any secured financing approved by the court shall be deemed priority financing. Chapter 11 Set-offs and Reciprocal Debts