By Don Southerton, KoreaLegal.org Editor
This has been a week of suits and counter lawsuits. Samsung and Apple are battling, so are Lone Star and Hana Bank. The Apple-Samsung issue are IP related, so nothing new there.
Regarding the latest chapter in the Lone Star–KEB–Hana saga…
Korea Times notes:
A legal dispute is looming between Hana Financial and Lone Star due to a delay in the government’s approval of their deal over Korea Exchange Bank (KEB).
A source close to Lone Star told The Korea Times, “It’s in the contract. A delay means compensation. If it comes to litigation, so be it.”
Hana is also equally adamant, saying that it is Lone Star’s fault so there is no need for it to pay.
At issue is a clause in the contact in which Hana will pay 4.7 trillion for Lone Star’s 51-percent stake in KEB and management control. The clause stipulates that Hana will have to pay 32.9 billion won ($30 million) per month, for April and May or about 66 billion won, if the deal is not completed by the end of March.
The contract was signed by Kim Seung-yu, Hana chairman, and Lone Star Chairman John Grayken in London, last November.
The sum accounts to 100 won per share for Lone Star’s KEB stake. The clause has come into sharp relief as regulators have indicated that no approval can be expected this month.
“We are not responsible for the delay because Lone Star’s eligibility as the major shareholder of KEB is the main cause,” an official of Hana Financial said, asking not to be named. “We are not ruling out a lawsuit against Lone Star if it insists on having us pay.”
In contrast the source said, “The contract calls on Hana to do its best to get the deal done. Is it doing its best? That is a very important legal question that determines whether Hana should be held responsible or not.” The source, however, said that it could be “legally very tricky.”
Some analysts think it could be hard to hold Lone Star accountable, saying that the clause is aimed at protecting the firm from costs incurred by the delay. Thus, a holdup in the regulators’ decision on the legality of Lone Star’s status as KEB’s majority shareholder is beside the point. If the deal is not consummated by May, their contract will allow one party to call it quits, which would free Hana from any compensation payment.
The compensation clause was included in the contract at the request of Lone Star, which argued that the delay of the deal may limit its rights to sell the lender to other potential buyers. Hana Financial agreed to it because the financial group was sure the deal would be completed by March.
It was encouraged by FSC Chairman Kim Seok-dong, who vowed to conclude the case this month. But a decision may not come until next month at the earliest because the Financial Supervisory Service (FSS), the FSC’s executive body, said that no decision was likely in April.
Meanwhile, Goldman Sachs, the erstwhile biggest shareholder of Hana Financial, unloaded about half of its stake in the banking group Thursday.
The U.S.-based global investment bank sold 7.5 million shares in Hana Financial in a block deal, bringing down its stake to 4.46 percent from about 7.56 percent. The shares, sold in blocks to institutional investors before Thursday’s market opening, fetched 43,000 won ($39.80) each, a discount of about 6.5 percent from the market price. Some say that Goldman Sachs wanted to reduce exposure, judging the Hana-Lone Star deal has become precarious. Others say that it was related to Goldman’s internal cash flow situation.
An appellate Seoul court is currently reexamining a stock manipulation case after the Supreme Court sent it back. Paul Yoo, head of Lone Star’s Korean unit, was cleared of stock manipulation of KEB’s credit card subsidiary in 2003 in a reversal of a lower court’s ruling. The highest court disagreed. Under the Korean Banking Law, a major shareholder of a financial company must not have committed any financial crime within five years.
It is quite possible that the regulators will wait for the high court’s decision before coming up with its own at the risk of going against the ruling.
By Nick Bibby
Korea, Music, and Copyright Fights
Saturday, October 16th, 2010By Don Southerton, Editor
This site is part commentary, part sharing by legal experts based in Korea, and part interesting articles that surface on the web. This story is the later..
Techdirt.com shared a story regarding music copyright issues in the US and in Korea. In fact, they cite http://korealaw.wordpress.com/, a blog by Chung & Partners– a full service law firm in Seoul, Korea.
Korea Gets Its Own Dancing Baby Copyright Fight; Says Free Expression Trumps Copyright Concern
If you follow copyright issues online, by now you’ve undoubtedly heard of the famous Lenz case, involving Universal Music issuing a takedown to YouTube on a 29-second home video a mother took of her toddler son dancing to a Prince song. While Universal didn’t protest the counternotice, the EFF sued, pointing out that it should have taken fair use into account.
Wonil Chung, an intellectual property lawyer in South Korea alerted us to a blog post he wrote about a case that is almost identical to the Lenz case in the US. It involved a father filming his toddler daughter dancing and singing to a Korean pop star. Again, a takedown notice was issued, and the guy sued in response. Of course, it’s worth noting that South Korean copyright law can be much stricter than US copyright law (in part due to lobbying pressure from — you guessed it — US entertainment industry lobbyists as part of a “free trade agreement” the US signed with South Korea). It’s also worth noting that South Korea’s concept of fair use is extremely narrow.
However, thankfully, the court sided with the father, pointing out that the video itself was not a substitute for the song, it had a non-commercial purpose, and only 15-seconds of the song were used. Perhaps most importantly, it noted:
“If this kind of UCC [User Created Content] is barred from uploading online, it results in a unnecessarily excessive restraint on the free expression.”
Even beyond that, unlike the court in the Lenz case, the Korean court ordered the copyright holder to pay the father for “mental damages suffered from the takedown.” This is nice to see, and Chung’s summary of the ruling pretty much wraps it up:
Another interesting part of this ruling is that the court clearly found that the free expression under the constitution of South Korea must be considered fully and fairly in determining whether there exists a copyright infringement or not. Although the Korean Copyright Act has a fair-use-like clause, the clause is stated relatively narrowly so there has been a certain criticism that Korean court is not active in holding up a fair use defense. But this ruling held that the constitutional right of free expression has the equal value as a copyright stated in the Copyright Act which is a subordinate law to the constitution. That’s why I welcome this ruling and expect to see the balance between the free expression and copyright with more fair use defences accepted in the Korean court in the future.
The full Korean post has more details and quotes from the ruling. LINK
Tags: Copyright Korea, IP issues Korea, Korea legal.org, Trademark issues Korea
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