Daewoo Motor America, Inc. v. Daewoo Motor Co. (In re Daewoo Motor America Inc.)

Daewoo Motor America, Inc. appeals a final judgment by the United States Bankruptcy Court for the Central District of California in its adversary proceeding against Daewoo Motor Company, Ltd. For the reasons set forth below, the judgment of the bankruptcy court is AFFIRMED.

I. INTRODUCTION AND PROCEDURAL BACKGROUND

Daewoo Motor America, Inc. (“DMA”) was established in June 1997 as a wholly-owned subsidiary of Daewoo Corporation. On December 31, 1998, Daewoo Corporation sold 100% of its interest in DMA to its affiliate, Daewoo Motor Company, Ltd., a South Korean automobile manufacturer. Throughout this Order, the Court will refer to both Daewoo Motor Company, Ltd. and its predecessor-in-interest Daewoo Corporation as “DWMC.” DMA served as DWMC’s exclusive distributor of Daewoo automobiles in the United States, and provided warranty services and replacement parts to U.S. Daewoo dealers.

A. Financing of DMA

DMA’s April 1998 business plan contemplated that DMA’s initial capitalization would consist of $40 million. DMA’s July 1998 business plan projected that, with a total capitalization of $50 million, DMA would generate substantial revenues and profits during its first three…