Money Games

Chapter 13The Final Sprint

We began the negotiation on the definitive documents with the KDIC at 2 pm on Thursday, November 18, in an all-hands meeting at their offices, exactly one month after our lawyers delivered the first draft to them. By now both parties had outlined the issues that we needed to resolve. Dong-il Kim, a senior officer who reported directly to Executive Director Dong-jun Paeng, was the only representative of the KDIC in the meeting. Eric Yoon of White & Case did most of the talking. Indeed, most of the discussion was between the lawyers representing the two sides. For the most part, the principals just listened. The atmosphere was friendly and the discussion constructive—but it was clear that this would be the first of several meetings needed to get us to the close.

In this first meeting, we went through all the outstanding issues one by one, and for most of them we did not reach a conclusion. The Daewoo loans, which included loans to dozens of subsidiaries of Daewoo Group, were KFB's largest problem loans, so they were a major focus of discussion. Some Daewoo subsidiaries were faring better than others, though credit support for Daewoo as a group had collapsed. What would we do with a Daewoo loan that was still performing but went bad after the closing of our transaction?

Our proposal was that if the work-out of a Daewoo loan happened after the closing, we would have the right to transfer it to the government, as we could all other nonperforming loans. ...