Blogs from September, 2020

In a case that's shaking white collar crime news, The Central District Prosecutor's Office in South Korea indicted Samsung heir Lee Jae-yong and 11 other Samsung officials on various charges including illegal transactions, stock manipulation, and perjury.

Samsung has experienced its fair share of legal trouble in recent years, and this case only compounds on that trend. Whether Lee Jae-yong and other officials receive convictions could set a new precedent for white collar crime in South Korea, and have global ramifications for national South Korean companies and partners.

Today, we're looking at Samsung's history of legal issues, the charges Lee and other officials face, and how this case may affect business law going forward.

Samsung & the Law: a Troubled History

Samsung's no stranger to legal issues, but the last five years, in particular, have seen the company in some hot water.

The trouble started with a 2015 merger that kicked off between Samsung C&T and Samsung Electronics. Lee wanted to incorporate Samsung C&T into Samsung Electronics, the company he was (and still is) vice-chairman of. The move would considerably increase how much Lee and his father, Samsung Electronics chairman Lee Kun-hee, owned of the Samsung empire.

Despite facing considerable pushback from C&T stakeholders, including US hedge fund Elliot Associates, the merger pushed through. Elliot Associates claimed the merger undervalued C&T while overvaluing Chiel Industries, the holding company Lee used to execute the merger.

Despite pushback from shareholders, C&T approved a $7.7 billion all-stock takeover from Chiel Industries, the holding company Lee used to conduct the merger. The Lees ended up owning another 4% of the Samsung empire as a result.

But that wasn't the end of the story. In 2017, South Korean news organization and CNN affiliate JTBC uncovered a tablet computer belonging to Choi Soon-sil. Choi, a controversial figure, acted as then-President Park Geun-hye's unofficial advisor.

Data from the tablet showed that Choi abused her closeness to the President to receive secret government documents, which she then used to tamper with government affairs and manipulate powerful individuals. For example, Choi obtained academic favors for her daughter from a prestigious university in a move reminiscent of the celebrity college scandal that rocked US ivy leagues earlier this year.

The data also unveiled that a number of powerful South Korean businesses leveraged their ties to the government, especially Choi and Park, to push for certain business deals.

Lee was implicated in the scandal, which revealed that he used his connections to Choi and Park to push the C&T merger through.

The scandal devastated the South Korean political landscape. The country's parliament voted 234 to 56 to impeach Park, who then stood trial for corruption charges.

Lee also stood trial in one of the most publicized white collar crime cases in the country's history. Prosecutors accused him of abusing ties to government officials and confidential entities, spending millions to curry favor with Park and Choi. Ultimately, the jury sentenced Lee to five years in prison. Samsung went on to appeal the sentences.

Where We Are Today

However, Lee's sentence was short-lived. Less than a year later, a South Korean appeals court threw out several of the charges, reducing the sentence to two and a half years and suspending it for four. He was a free man once again (at least, for the time being).

Legal scholars were hardly surprised. Lee's own father was indicted on corruption charges twice, and both times received a pardon for his "contributions to the economy." Executives in businesses like Samsung, which generate significant capital for the South Korean economy, rarely get stuck with long-lasting sentences.

According to the University of Southern California's Korean Studies Institute Director, David Kand, jail is "like a rite of passage... the question will really be, how long does he serve?"

Now, as Lee and 11 other Samsung officials face charges of stock manipulation, illicit lobbying, and perjury, that question seems more pertinent than ever.

The charges Lee currently faces are still tied to the 2015 merger, with prosecutors claiming they have evidence Lee and other Samsung officials illegally disseminated false information to devalue C&T. Samsung contests the charges, which scholars expect will escalate to the South Korean Supreme Court before a judgment is handed down.

Why Should US Businesses Pay Attention to the Case?

The Samsung conglomerate's combined businesses account for a whopping 15% of South Korea's economy.

Although Lee's father currently acts as Samsung's chairman, many South Korean business executives and pundits assume that Lee is the company's de facto leader, since the elder Lee has struggled with health problems for years. If the South Korean Supreme Court actually hands a hefty jail sentence down to Lee, it will destabilize Samsung, meaning changes for its leadership culture.

The market isn't optimistic about the Court's chances. Even after Lee's recent indictments, shares for Samsung Electronics ended at +0.04%.

If Lee gets a harsh sentence, it will change how South Korean companies operate, and as a result, change how global partners interact with South Korean enterprises. On the other hand, if Lee gets a slap on the wrist or avoids a sentence entirely, South Korean businesses will keep pushing the boundaries of how much they can meddle with government affairs.

At The Law Offices of Daniel J. Miller, we can help you navigate your white collar crime case with confidence. We'll work with you to understand every facet of your case and help you proceed towards an ideal outcome.

To schedule a consultation with our team, contact us online or via phone at (757) 267-4949">(757) 267-4949.

It's no secret that divorce is expensive. The average contested divorce in the US costs around $15,000, enough to make a dent in anyone's bank account. If you share children with your partner or either party owns valuable assets, that cost may only increase.

Why spend all that money on divorce, when it could be better spent elsewhere? Understanding the common costs associated with divorce enables you to make better spending decisions, reducing the cost of the divorce process. In turn, you can use those savings to springboard into a happier, healthier life post-divorce.

How Can I Make My Divorce Cheaper?

As a rule of thumb, the more you can compromise with your spouse on the terms of your divorce, the cheaper it will be.

For example, filing for an uncontested divorce (where you and your spouse agree on all terms for the divorce) is typically significantly cheaper than filing for a contested divorce (where you and your spouse disagree on one or more terms for the divorce).

You should discuss the following divorce-related processes with your spouse:

• Property division,
• Child support,
• Child custody, and
• Alimony.

These are usually the most contentious parts of any divorce, and disagreeing with your partner on how to handle these processes usually means significantly extending how long your divorce takes.

For example, let's say you agree with your partner on how to handle child custody. You can simply draft a joint parenting plan with your co-parent laying out the terms for your child custody arrangement that you’ve both agreed to. As long as the judge approves the parenting plan, finalizing your custody dispute will take very little time and money.

Alternatively, if you disagree with your partner on custody, you may have to attend a lengthy court battle, paying for experts and court fees along the way.

Compromising with your partner on various divorce-related processes such as custody can mean saving thousands or even tens of thousands of dollars on your divorce, depending on your circumstances.

As you move forward with your divorce, speak with your lawyer about utilizing a form of alternative dispute resolution, such as collaborative law. Your lawyer can help you negotiate with your spouse, protecting your rights while simultaneously enabling you to reach a mutually beneficial outcome with your soon-to-be-ex.

In addition to working with your ex, knowing about common divorce expenses can help you budget for your divorce more effectively. Knowing what to expect from your divorce financially gives you more time to find the most cost-effective ways to tackle expenses, leaving you with more money when all's said and done. Without further ado, let's explore some expenses you should prepare for as you move through your divorce.

Breaking Legal Contracts Can be Surprisingly Expensive

Most of us are engaged in dozens of legal contracts we never think about. You know that user agreement you blindly scroll through every time you download a new app on your phone? Case in point.

As you move forward with your divorce, you'll probably need to renegotiate terms for any legal contracts you share with your spouse. For example, you'll need to each get a separate phone plan. The same thing goes for insurance.

Often, couples get breaks on contracts like insurance and phone policies since they can buy into a family plan. Renegotiating the terms for those contracts or removing yourself from one before the renewal date can cost hundreds or even thousands of dollars, depending on how many contracts you share with your soon-to-be-ex.

Make a list of every contract you share with your spouse. Figure out how much it costs to renegotiate or end them, and then get to work. Companies will frequently give you better offers if you refuse their first proposal or ask for a different plan. The more you plan in advance, the more time you have to negotiate a new deal with your service provider or save money with a sale for a new one.

Think About the Basic Necessities

Most people know that getting a new apartment, home, or vehicle post-divorce can be expensive. But what about all the little things you'll need in addition to those big items? You may need new silverware, new housecare tools, a new washer or dryer—the list goes on.

Make a list of every basic necessity you don't currently have, but will need in the future. If you have children, that may include new toys for them or other devices (video game consoles, a computer at your place for schoolwork, etc.). Having a list as you move through your divorce can help you know what to look for and wait for sales so you can get the items you need at premium prices.

Figure Out Whether You have to Refinance Loans

It's not uncommon for couples to get big-ticket items, like a car, together. If only one of you is on the title for something like a vehicle, you may have to refinance the loan for that expense.

Refinancing loans can increase how long it takes to pay off something like a vehicle and drive up monthly payments. It can also affect how banks deal with loans in the future, increasing insurance rates or downpayments for future expenses.

Understanding whether you need to refinance any loans you have enables you to negotiate with the loan holder for a better deal. Speaking with a financial professional like a certified public accountant (CPA) about liabilities such as loans can help you get on the right track. Additionally, they may be able to give you other information that comes in handy during the property division process.

At The Law Offices of Daniel J. Miller, we can help you find the best path forward in your divorce.

To schedule a consultation with our team or learn more about our services, contact us online or via phone at (757) 267-4949">(757) 267-4949.