LIN NEWS
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LIN NewsU.S. Attorney Woohyuk Ju Giving Lectures on “Global Market Entry Strategies” at Entrepreneurship Seminar Hosted by Korea UniversityU.S. Attorney Woohyuk Ju from the International Legal Team at LIN (specializing in international trade and overseas expansion) delivered a lecture on “Global Market Entry Strategies” at Korea University’s entrepreneurship seminar held on April 1st. Korea University regularly holds seminars for on-campus entrepreneurs who wish to expand into the U.S. market, and Mr. Ju provided specific and practical training on establishing a U.S. corporation, visa guidance, and drafting international contracts that will help companies in their global business. Since its launch in 2021, the Biden administration has consistently pursued policies to foster manufacturing in the U.S., which has actually acted as an incentive for global companies to invest in the U.S. Bidenomics, including the enactment of the Inflation Reduction Act (IRA) and the CHIPS and Science Act, attracted countries around the world to the U.S., and USD 200 billion (KRW 258.6 trillion) of investment in the U.S. was made from the Asia-Pacific region, including Korea. Among them, Korean companies' investment in the U.S. accounts for more than a quarter, and it is expected to increase further in the future. As more Korean companies are entering and investing in the U.S., Lin’s International Legal Team is providing differentiated services to provide support for leading Korean companies by giving advice on entering the U.S. market, making investment, and dealing with local management, while helping them resolve issues and problems related to their U.S. business from the client’s perspectives. If you need assistance with entering the U.S. market, please feel free to contact our International Legal Team at +82-2-3477-8695.2024.04.09
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News LetterLin Wins in the Stay of Execution Case Representing the Fair Trade Commission of Korea in Market-Dominant Position Abuse CaseOn December 27, 2023, on behalf of the Korea Fair Trade Commission (“KFTC”), Lin won an enforcement injunction case filed by the Korea Music Copyright Association (the “Applicant”) against KFTC in the Seoul High Court. 1. Corrective Order and Fine Imposed by KFTC KFTC issued a corrective order and imposed a fine of KRW 375,000,000 on the Applicant for abusing its position as a copyright holder by charging and collecting excessive broadcasting fees from broadcasters, thereby making it difficult for competitors to collect broadcasting fees. In response, the Applicant filed a lawsuit seeking the suspension of execution of the above order and fine and an application for an enforcement order. 2. Abuse of Dominant Market Position After dominating the music copyright management service market since 1988, the Applicant, starting from the third quarter of 2015, had to collect broadcasting royalties divided according to the music composition management fee rate, as stipulated by the Music Composition Usage Fee Collection Regulations, due to the new entry of the same copyright management entity, The Korean Society of Composers, Authors and Publishers (“KOSCAP”). However, due to the impossibility of calculating an accurate management ratio, the Applicant charged and collected broadcasting fees from a total of 59 broadcasters, including KBS and MBC, using either the same management ratio that the Applicant had previously applied when collecting broadcasting fees exclusively, or an arbitrarily excessive management ratio. The Applicant filed civil lawsuits against broadcasters who paid only a portion of the broadcasting royalties it arbitrarily overestimated, and pressured some system operators or satellite broadcasters that did not accept the arbitrarily set broadcasting royalties by prohibiting the use of the musical works or threatening them with increased royalties and criminal charges. In addition, due to the Applicant's actions, KOSCAP had difficulty billing and collecting broadcasting fees from other broadcasters, and some broadcasters did not pay KOSCAP at all, resulting in KOSCAP recording net losses since its inception. KFTC concluded that the Applicant's conduct had the effect of restricting competition by blocking the business expansion opportunities of its competitors and discouraging innovation in broadcasting license fee collection methods, and therefore, the Applicant abused its market dominant position by making it difficult for its competitors to conduct business. Furthermore, KFTC deemed that the Applicant engaged in unfair trade practices by imposing excessive broadcasting royalties, applying arbitrary management fee rates to broadcasting companies, and collecting them. The Applicant was seen as engaging in unfair trade practices by abusing its position in transactions to force economic benefits upon its trading partners. 3. Stay of Execution Applied by the Applicant In this case, the Applicant did not seek a stay of execution for the penalty surcharges but instead sought a stay of execution for the corrective order and notice order. The argument was made on the grounds that the corrective order is not practically achievable, and if the notice order is issued, irreparable damage to the tarnished reputation would occur. 4. Lin’s Defense Strategies In this case, Lin argued that: ① The focus should be on whether the conditions for a stay of execution have been met. The argument is that the corrective order, instructing the Applicant to carry out normal collection, can by no means be considered impracticable; ② The factors raised by the Applicant are not deemed as actual damages. Even if they were considered damages, they would be pecuniary losses that could be compensated. Thus, there is no urgent need for preventive measures against irreparable damages that would be difficult for the Applicant to recover; and ③ Regarding KFTC’s corrective order, the Applicant presented a specific logical response, asserting that if they apply a reasonable management fee rate and collect broadcasting royalties accordingly, the external image, credit, and reputation with respect to the broadcasting companies, their trading partners, will be further improved. This argument was actively presented to the court with rational grounds. 5. Seoul High Court’s Dismissal Decision The Seoul High Court accepted all arguments presented by the respondent and dismissed the Applicant’s request for a stay of execution. The court concluded that, based solely on the evidence submitted by the Applicant, there is no imminent risk of irreparable damage to the Applicant due to the disposition specified in the application, nor is there an urgent need to suspend the effect of the disposition to prevent such damage. 6. Implications This case is noteworthy as the first instance in which KFTC sanctioned an abuse of market dominant position in the field of copyright. Particularly, in a fair trade case where there is a high rate of approval for stay of execution requests, this decision is of significant importance, as it was reached through in-depth analysis of the Fair Trade Act and intellectual property rights, leading to the rejection of the application. * * * If you have any questions regarding the above, please do not hesitate to contact Mr. Jong Sik Kim or Mr. Hyeonjun Choi of our Antitrust Team at Lin (Tel. 02-3477-8695).2024.01.24
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NoticeLin Signs MOU with Korea New & Renewable Energy Association (KNREA)Mutual cooperation on new & renewable energy-related projects through legal services in the field of laws and regulations On October 26, Lin signed an MOU with KNREA to promote the development of the domestic new & renewable energy industry. The agreement was signed to provide various legal services to KNREA and its member companies, including information on new & renewable energy-related laws and regulations. Through the agreement, the two parties agreed to cooperate on ▶ improving new & renewable energy-related laws and systems ▶ providing legal advice on new & renewable energy ▶ and training on new & renewable energy. In line with the trend of carbon neutrality, Lin will exert its best to promote the sustainable development of the renewable energy industry, which can replace conventional energy using fossil fuels and nuclear power. For more information, please visit KNREA website below. http://www.knrea.or.kr/bbs/?act=bbs&subAct=view&bid=agreement&page=1&order_type=desc&seq=58282023.11.10
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Recruitment PersonnelNew RecruitmentsWe are pleased to welcome Jung Bong Lee (Partner), Lance B. Lee (Foreign Legal Consultant - Partner), and Ki Suk Seol (Of Counsel) as new members of our Firm. 1. Jeong Bong Lee, Partner - Incheon Songdo High School(68th) - Yonsei University, Department of Law - Chungnam National University, School of Law - Korean Bar Examination (40th, 1998) - Judicial Research and Training Institute (27th) - University of Vienna – Criminal Justice Institute Visiting Scholar (2008) Past) Incheon District Public Prosecutors’ Office – Prosecutor (2001) Past) Daejeon District Public Prosecutors’ Office, Hongseong Branch – Prosecutor (2003) Past) Incheon District Public Prosecutors’ Office, Bucheon Branch – Prosecutor (2005) Past) Seoul Central District Public Prosecutors’ Office – Prosecutor (2007) Past) Supreme Prosecutors’ Office - Prosecutor Researcher (2007) Past) Busan District Public Prosecutors’ Office – Prosecutor (2013) Past) Financial Intelligence Unit (FIU) - Head of Strategic Analytics (2014) Past) Chuncheon District Public Prosecutors’ Office, Gangneung Branch – Chief Prosecutor (2016) Past) Daegu District Public Prosecutors’ Office, Seobu Branch – Chief Prosecutor, Criminal Division 3 (2017) Past) Seoul Eastern District Public Prosecutors’ Office - Chief Prosecutor, Criminal Division 5 (2018) Past) Seoul Southern District Public Prosecutors’ Office - Chief Prosecutor, Criminal Division 2 (2019) Past) Supreme Prosecutors’ Office – Human Rights Policy Officer (2020) Past) Gwangju District Public Prosecutors’ Office – Human Rights Protection Officer (2021) Past) Chuncheon District Public Prosecutors’ Office – Chief of Wonju Branch (2022) Past) Seoul High Prosecutors’ Office (Daegu District Public Prosecutors’ Office, Secondment(2023), Voluntary Resignation) Current) LIN Since his appointment as a prosecutor in 2001, Mr. Lee has served as a prosecutor at the Seoul Central District Prosecutors' Office, a researcher at the Supreme Prosecutors' Office, a prosecutor at the Busan District Prosecutors' Office, a secondee at the Financial Intelligence Unit (FIU), a deputy prosecutor at the Seoul Eastern and Southern District Prosecutors' Offices, and a human rights policy officer at the Supreme Prosecutors' Office, before finally retiring in 2023 as the Chief Prosecutor of the Wonju District Prosecutors' Office. During his 22 years and 8 months as a prosecutor, he discharged a wide range of cases, including intellectual property infringement, technology theft and unfair competition, medical malpractice, sexual assault, finance, taxation, homicide, special crime, public security, and human rights policy (due process compliance in investigations). Mr. Lee, who joined Lin as a partner in November 2023, plans to actively engage in various cases such as securities, finance, and corporate anti-corruption based on diverse investigative and theoretical experience accumulated from the prosecution. Lin boasts top domestic experts in responding to financial, corporate crimes, and other investigative matters, and we will strive to provide our clients with high-quality legal services. 2. Lance B. Lee, Foreign Legal Consultant (Partner) - Boston College Law School – J.D. - University of Virginia – B.A. Past) Dentons Lee - Chief Operating Officer, Head of International Arbitration & Litigation and Partner, 2012-2023 Past) Kim & Chang - Partner Past) STX Shipbuilding Corporation – Group General Counsel Past) POSCO – Overseas Projects Team Leader Past) U.S. Army JAG Corps – Trial Counsel, Prosecutor and Captain Past) Gainer, Rient & Hotis - Attorney Current) LIN – Head of International Arbitration & Litigation, Partner (Present) Mr. Lee, a U.S. attorney, was responsible for various international arbitration and litigation cases for 11 years at Kim & Chang, representing numerous international corporations and diverse fields. Serving as General Counsel at STX Shipbuilding Corporation and Head of the International Legal Team at POSCO, he handled tasks such as international arbitration, international litigation, IP, corporate M&A, contract negotiations, and joint investments for global conglomerates. Subsequently, as a partner at the Seoul Office of Dentons, he worked for 11 years as the Head of the International Arbitration/Litigation Team, leading numerous international arbitration cases as lead counsel. In 2024, for the first time in history, more than half of the global population will be holding elections, signaling the end of America’s “unilateral hegemony” and prompting the world to prepare for more disputes. With major industrial powers intensifying their industrial policies and protectionist measures to secure leadership in advanced and eco-friendly industries post-election, there is an anticipated increase in international disputes, particularly in advanced technology sectors such as semiconductors and information technology (IT). Mr. Lee, a foreign attorney leading the International Arbitration/Litigation Team, will leverage his experience and expertise to actively discharge legal advice on the prevention and resolution of international disputes for various global corporations based on his accumulated knowledge and professionalism. 3. Ki Suk Seol, Of Counsel - Hongik University, Department of Architecture - Kyungpook National University, Graduate School of Law, - KAIST, Intellectual Property Graduate School - Bar Examination (3rd) Past) Eland Group, Legal Department Past) Hyundai Engineering, Legal Department Past) Ministry of Justice, Legal Affairs Officer Past) Ministry of Justice, Legal Affairs Secretary Current) LIN Mr. Seol, as an in-house counsel for a large corporation, has accumulated expertise in a wide range of legal affairs that can arise within the company, including civil and criminal litigation and consultation, fair trade practices, compliance, intellectual property, construction, and labor-related dispute management. Subsequently, serving as a Legal Affairs Secretary at the Ministry of Justice, he handled administrative adjudication and litigation, legislation drafting and revision, interpretation of laws and rights, review of government and legislative bills, formulation of legislative strategies, improvement of attorney and notary systems, and enhancement of legal technology systems. Through these roles, he has built expertise in planning, administration, and legislation. Amidst the ongoing challenges such as the increase in unsold and unoccupied properties, rising construction costs, high interest rates, and stagnation in real estate PF, it is anticipated that legal disputes and litigation among real estate market participants, including developers, contractors, financial institutions, trustees, and local housing associations, will continue to rise. Mr. Seol, who has served as an in-house counsel for a global integrated construction company, has handled a wide range of cases from civil and criminal matters to fair trade, construction, labor, and compliance issues, from the client's perspective, collaborating with various major law firms. Drawing upon his extensive practical experience accumulated in the field, he is committed to providing tailored solutions, not only advisory services but also litigation support, to corporate clients. 4. Recruitment of Foreign Lawyer With recent concerns over deflation in China, attitudes of Korean companies towards China have become notably cautious. Consequently, there is a growing need for professional advice regarding entry into the Chinese market. Recognizing this demand, Lin has recently recruited Ms. Wenpu Yang (Chinese attorney), aiming to provide high-quality legal service that aligns with our clients’ business strategies and management objectives on various issues related to Sino-Korean business relations. Going forward, Lin promises to continuously recruit verified talents in various fields to ensure customer satisfaction.2024.02.05
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Select MattersLIN Wins an Injunction to Suspend the Validity of an Exclusive Contract on behalf of “LOONA”.LIN represented nine members of the girl group named “LOONA" (HeeJin, Kim Lip, JinSoul, Choerry, HaSeul, YeoJin, Yves, Olivia Hye, and Go Won) against their agency, Blockberry Creative, and obtained a favorable decision, allowing all members of the group to leave the agency. In January, nine members of "LOONA" filed an application for a temporary restraining order against the agency, and four members (HeeJin, Kim Lip, JinSoul, and Choerry) won the case because the revenue sharing clause in the agency contract was unfair, while the other five members (HaSeul, YeoJin, Yves, Olivia Hye, and Go Won) lost the case. The reason was that the five members (HaSeul, YeoJin, Yves, Olivia Hye, and Go Won) had changed some of the terms of the contract unlike the other four members (HeeJin, Kim Lip, JinSoul, and Choerry). The five members then filed an appeal, and on June 16, the Civil Division 5 of the Seoul High Court revoked the first court's decision and decided to grant the appeal in the appeal for a preliminary injunction to suspend the effectiveness of the exclusive contract filed by the five members (HaSeul, YeoJin, Yves, Olivia Hye, and Go Won) against the agency. LIN pointed out that Blockberry Creative had transferred some of its rights under the agency contract to its Japanese management company, Universal Japan, without the members' written consent, and the appellate court accepted the law firm's arguments, suspending the effectiveness of the agency contract pending judgment on the merits and deciding that the agency should not negotiate and conclude contracts with third parties for entertainment activities against the members' will, and should not request or interfere with the members' entertainment activities. This case was the result of a collaboration between the entertainment and sports teams of LIN. While Korea’s trade export deficit has been accumulating for more than a year, K-content exports reached $13 billion as of last year, and the status of K-contents is increasing day by day, so it is expected that there will be more cases in which artists will apply for the suspension of the effectiveness of exclusive contracts against their agencies, and the logic presented by LIN and the court's judgment recognizing it will be an important reference for similar cases in the future.2023.06.21
[Law Firm’s Expertise] Lin Obtained a Court Ruling that Terms and Conditions Providing for 'Counter-Trading Without a Margin Call' are Invalid
In February 2020, global stock markets were shaken by the COVID-19 pandemic, and the price volatility of Nikkei 225 index options that were traded on the night market of the Osaka Exchange in Japan increased sharply. As a result, the synthetic position of Winners Investment Management, which had been employing a neutral strategy for funds and discretionary management on Nikkei 225 index options, was liquidated overnight by its investment intermediary, leading to losses and outstanding payments amounting to tens of billions of won.
At that time, A Securities, the investment brokerage firm executed the counter-trade without a margin call based on the standard terms and conditions of the Financial Investment Association. Winners Investment Management and the funds under its management filed a lawsuit alleging that the counter-sale of A Securities did not meet the requirements of the said Terms and Conditions and violated the Terms and Conditions Regulation Act, but the first-instance court ruled that there was no problem with the counter-sale of A Securities. In the second-instance trial, 'Lin' appeared as a relief pitcher in addition to the existing representative, and presented an elaborate logic that the standard terms and conditions were invalid because they violated the Capital Market Act, which was completely different from the argument presented at the first-instance trial.
In the second-instance trial, Lin looked at the nature of the investment brokerage business and the meaning of the system, and argued that 'counter-trading without margin calls' violates the current Capital Market Act, and that it is inconsistent with international financial market standards for securities firms to manage risk through counter-trading rather than through commissions, margin, or margin calls. After a year-long trial, the appellate court accepted the argument of Lin by ruling that terms and conditions providing for counter-sale without a margin call are invalid considering the purpose for which the related statues of the Capital Market Act were made – protecting investors and promoting healthy trading order. As a result, the second-instance court reached a conclusion that is completely opposite to that of the lower court.
'Lin' was able to present a variety of arguments covering the law and practice of derivatives transactions by combining inputs from it’s the lead attorney, Jin Seok Lim (20th, Judicial Training Institute); former deputy chief judge, Deok Jin Kwon (27th, Judicial Training Institute); former lawyers at Lee & Ko and Kim & Chang, and financial dispute specialists, Dong Jae Yi (31st, Judicial Training Institute) and Il Roh Kim, former legal team leader at the Korea Exchange and aa capital market specialist Se Yong Um, and U.S. Attorney Hyun Sang Youn, who has experience of working for an overseas financial institution.
This is the first case in which terms and conditions related to financial investment where the principle of self-responsibility is crucial have been found invalid by a court, and it marks a turning point in the way we think of the terms and conditions regarding financial investment product transactions. The change has already begun.Reportedly, some securities firms have already launched internal reviews of their terms and conditions in the wake of this ruling, and Lin is creating a new wave in the field of financial investment.
Please refer to the following article for more information.
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Lin, Seeing ‘Values’ Beyond the Odds
The season of general shareholders’ meetings, also known as "hearings of the financial world," is in full swing. This year, with activist funds' voices being expected to become more prominent under the ‘Corporate Value-up Program’, which emphasizes “expanding shareholder returns," Yonhap Infomax spotlights lawyers of Lin who represented a coalition of five activist funds at Samsung C&T's general shareholders' meeting.
Five activist funds, including City of London in the UK, have sent shareholder letters to Samsung C&T since the end of last year demanding an expansion of dividends and purchase of additional treasury stocks amounting to 500 billion KRW.
Samsung C&T is 33.63% owned by Samsung Electronics Chairman Lee Jae-Yong and specially related persons, while only 1.46% is owned by the five activist funds making it unlikely that such proposal would pass even if it was put on the agenda. Although it was a long shot, Lin focused not on the "odds" but on the "social contribution" that the proposal could make in creating a shareholder-friendly corporate ecosystem.
At 8:00 a.m. on March 15th, the day of Samsung C&T's 60th Annual General Meeting of Shareholders,
Lawyers from top law firms gathered at Samsung's Global Engineering Center (GEC), where the meeting was held. Kim & Chang's Park Jong-Hyun, and Lin's Do Hyun-Soo and Milosz Zurkowski met in the lobby to talk. Kim & Chang represents Samsung C&T, and Lin represents five hedge funds.
They, once colleagues at Kim & Chang, greeted each other and talked about different issues, including recommendations from global proxy advisory firms, and all of them did not look nervous at all.
At 9:00 a.m., the venue for Samsung C&T’s general shareholders’ meeting turned into a coliseum for hedge funds and the company.
Whenever each agenda item was presented, small shareholders expressed their disappointment. "The answer lies in the stock price. Even a bad company can be regarded as a good one if it has a good stock price, and even a good company can be regarded as a bad one if it has a bad stock price," they said. They also added, "we want to hear whether the executives and staff members of Samsung C&T, which is the best company in Korea, are doing their best to restore the pre-merger stock price, and how desperate they are.”
The shareholder letters from activist funds have ignited the anger of small shareholders turning them into strong supporters of the hedge funds. The 23% approval rate is the evidence of it. Excluding the 1.4% stake held by the coalition of five hedge funds, shareholders holding not less than 20% of the stake were persuaded, which is translated into almost 32 million shares in terms of stock quantity.
The third agenda item, a proposal to buy back additional shares, was also approved by 18% of the votes, or about 24 million shares.
“In the second half of next year, we will consider various ways to enhance shareholder returns to meet their demands.”
Although the proposals on cash dividends and repurchase of additional shares were rejected, Do and Zurkowski of Lin could leave the meeting with a smile on their faces because, despite the significant disparity in ownership rates, they won the support of not less than 20% of institutional investors and minority shareholders, including the endorsement of ISS and Glass Lewis among other major global voting rights advisory firms, and led the company to proactively reviewing its policy for shareholder returns.
Moving forward, Lin will continue to pursue values beyond the odds and progress with a long-term perspective.
- Source: Yonhap Infomax
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Lin Demands Expansion of Shareholder Returns on Behalf of Activist Funds at Samsung C&T's General Shareholders' Meeting
Samsung C&T held its 60th annual general meeting of shareholders on March 15 and voted on major agenda items such as the cancellation of treasury shares, cash dividends, and appointment of directors. The main focus of the day was on the passage of shareholder proposals put forward by activist funds, and Lin represented a coalition of five activist funds, including a UK-based asset manager, City of London, US-based Whitebox Advisors, and Korea-based Anda Asset Management, confronting the company over the size of dividends and share buybacks to ensure shareholder interests.
Do Hyun-Soo of Lin speaks on behalf of activist funds
at Samsung C&T's shareholders' meeting
"Despite the excellent performance of Samsung C&T’s blue-chip assets, shareholders have continuously suffered investment losses," and “the need to improve capital allocation and shareholder return rates is supported by domestic and international proxy advisors and minority shareholders,” said Do Hyun-Soo, attorney from Lin.
"Compared to Samsung C&T's net asset value, the (stock price) discount epitomizes ‘Korean discount’," Do added. He also argued that "Samsung C&T's inefficient capital allocation, vulnerable corporate governance, and unclear strategies are preventing shareholders from enjoying the profits from the company’s growth."
Please refer to the related articles below.
- Sources: The Korea Economic Daily & Yonhap News Agency
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