Legal review of a penalty claim under a project finance advisory agreement for a real estate development

A dispute arose over a project finance (PF) financial advisory agreement for a large real estate development, in which a financial institution claimed a penalty for breach against the developer and others. Attorney Jaehoon Lee reviewed the key legal issues in the dispute.

The key issues were whether the exclusive financing arrangement clause in the financial advisory agreement had been breached, the requirements for payment of the penalty for breach and the validity of that provision, and whether a newly formed company that took over the development was liable under the contract or had abused its corporate form.

Attorney Lee analyzed the key provisions of the PF financial advisory agreement, how the financing was obtained, and the contractual relationships among the parties and the structure of the project. He also reviewed the legal issues concerning the requirements for payment of the penalty and the validity of the provision, whether the financial advisory agreement could be terminated, and the liability of the newly formed company, and prepared a legal opinion drawing together the relevant legal principles and the parties' arguments.

We reviewed the legal basis for the penalty claim and the likelihood of liability on each key issue, helping the client assess the legal risks of the dispute and decide how to proceed.