Post-Termination Inventory and Channel Advisory

Cha & Kwon Law Offices provided post-termination inventory and channel advisory services to a domestic distributor following the expiration of a cross-border distribution agreement with a global brand. This engagement focused on navigating the complexities of post-termination inventory liquidation and channel control, particularly regarding contractual sell-off periods, pricing and territorial restrictions, and the cessation of trademark rights.

Key issues addressed included potential liability for breach of contract, trademark infringement risks, and the legal permissibility of bulk inventory sales to professional dealers. Our legal team conducted a structured review of the contractual clauses to distinguish between “permissible disposal methods” and “unauthorized actions” that could trigger legal disputes. This process involved evaluating various conflict scenarios—including injunctions, claims for damages, and sales suspensions—to provide strategic options for risk mitigation.

Furthermore, Cha & Kwon Law Offices designed a transaction framework to minimize exposure related to dumping restrictions, brand integrity, and unauthorized re-exporting. The resulting advisory enabled the client to implement a commercially viable exit strategy while establishing a comprehensive risk management system for post-termination operations.

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