[2] In a case where an immediate appeal is filed against a commencement order of rehabilitation procedure by the first instance court, and the debtor submitted a new rehabilitation plan and received authorization order from the first instance court, whether the appellate court should determine whether there exists grounds for rejection of the application for commencement of rehabilitation procedure in consideration of the feasibility of the newly submitted rehabilitation plan (affirmative)

[3] The case reversing the order of the court below that held that the application for commencement of rehabilitation procedure which the debtor newly submitted 8 days after the non-authorization decision of the rehabilitation plan became final and conclusive is unlawful without examining the possibility of the newly submitted rehabilitation plan, in case where the first instance court accepted the application for commencement of rehabilitation procedure which the debtor newly submitted 8 days after the commencement decision was made, and the first instance court submitted a new rehabilitation plan and the debtor

[2] In principle, the issue of whether the requirements for commencement of rehabilitation procedures are satisfied shall be determined at the time of application. However, in the case where an immediate appeal is filed against the commencement order, it shall be determined at the time of the appellate trial by taking into account the circumstances that occurred after the commencement order was rendered in light of the core nature of the appellate trial. In the case where a decision to authorize a new rehabilitation plan submitted by the debtor after the commencement order was rendered, the appellate court shall determine the existence of reasons under subparagraphs 2 and 3 of Article 42 of the Debtor Rehabilitation and Bankruptcy Act by taking into account such circumstances. To this end, it is reasonable to take into account the possibility of the implementation of the newly submitted rehabilitation plan and the possibility of guaranteeing liquidation value

[3] Where the first instance court accepted the application for commencement of rehabilitation procedure newly submitted by the debtor company within 80 days after the first rehabilitation plan was non-authorization decision of the first rehabilitation plan and decided to commence rehabilitation procedure, an immediate appeal is filed, and the debtor company submitted a new rehabilitation plan and received authorization decision from the first instance court, the case reversed the order of the court below that the application for commencement of rehabilitation procedure was unlawful on the ground that there was no particular change in circumstances by examining only the possibility of execution based on the first rehabilitation plan without examining the possibility of execution of the newly submitted rehabilitation plan, etc.

1. Application for commencement of rehabilitation procedure of this case

The record reveals the following facts.

1) On September 15, 2006, an international comprehensive discussion on the debtor company (hereinafter “debtor company”) was ordered to commence rehabilitation procedures (hereinafter “the primary rehabilitation procedures”) by the Busan District Court, and the administrator submitted a rehabilitation plan to hold an assembly of related persons for resolution of the rehabilitation plan, and the rehabilitation secured creditors failed to meet the requirements for resolution by the rehabilitation secured creditors, the above court determined on April 30, 2007 the protection provision of rights and authorized the said rehabilitation plan (hereinafter “the primary rehabilitation plan”).

2) As to the authorization decision of the first rehabilitation plan, the rehabilitation secured creditor, Korea Mutual Savings Bank (hereinafter “Korea Mutual Savings Bank”) filed an immediate appeal, and the appellate court revoked the first instance decision and decided not to grant authorization of the first rehabilitation plan on September 21, 2007 on the ground that it is not possible to implement the first rehabilitation plan if the future acceptance amount, etc. is estimated from the remuneration perspective.

3) On January 14, 2008, the Supreme Court filed a reappeal against the non-authorization decision of the first rehabilitation plan, which became final and conclusive by dismissing the reappeal, and the first rehabilitation procedure for the debtor company was completed.

4) However, on January 22, 2008, the debtor company filed an application for commencement of rehabilitation procedure of this case on January 22, 2008, eight thousand won after a decision not to authorize the first rehabilitation plan became final and conclusive.

5) The main grounds cited by the debtor company upon filing an application for the commencement of rehabilitation procedure of this case are ① The inspection report based on the appellate trial of the first rehabilitation procedure and the decision of the reappeal by the appellate trial of the second rehabilitation procedure was erroneous in recognizing the value of the rehabilitation security right as the basis for the commencement of the rehabilitation plan, and causing an error in the judgment on the possibility of implementation of the rehabilitation plan by failing to reflect the debtor company's claim for the outstanding amount of the construction work in connection with the land readjustment project of the Geumpo District. ② After the submission of the first rehabilitation plan, there was a change in circumstances where the possibility of implementation of the rehabilitation plan is enhanced, such as raising the value

6) On May 19, 2008, the first instance court accepted the application for commencement of rehabilitation procedure of this case on May 19, 2008, and rendered a decision on commencement of rehabilitation procedure of this case, and our mutual savings bank filed an appeal on May 30, 2008.

2. The judgment of the court below

According to the reasoning of the order of the court below, the court below determined that the debtor company's claim for the amount of construction accounts receivable in relation to a land readjustment project in Geumpo District was 31.7 billion won or more, and it is difficult to view that the value of the shares of Busan Logistics Terminal Co., Ltd. held by the debtor company reaches 1.6 billion won in light of the above company's various circumstances. In light of the circumstances leading up to the application for commencement of rehabilitation procedure of this case and the debtor company's financial situation, the application for commencement of rehabilitation procedure of this case was made solely with the incidental effect or the effect of the decision on commencement due to the progress of rehabilitation procedure, and thus, the application for commencement of rehabilitation procedure of this case constitutes a ground for dismissal as stipulated in subparagraphs 2 and 3 of Article 42 of the Debtor Rehabilitation and Bankruptcy Act, and revoked the decision on commencement

3. Judgment of party members

A. In determining whether there exists a ground to dismiss an application for commencement of rehabilitation procedures on the ground that the debtor files an application for commencement of new rehabilitation procedures despite the confirmation of a rehabilitation plan discontinuation decision or the non-authorization decision on the rehabilitation plan became final and conclusive, the following circumstances should be taken into account: (a) whether there exists a ground to dismiss the application for commencement of rehabilitation procedures on the ground that such application falls under “where the application is not bona fide” under Article 42 Subparag. 2 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “the Act”) or “other cases where rehabilitation procedures do not conform to the general interests of creditors”; (b) the period between the time of commencement of the previous rehabilitation procedures and the time of the commencement of new rehabilitation procedures; (c) whether the grounds to discontinue the previous rehabilitation procedures have ceased to exist; or (d) the debtor’s business situation or financial status; and

On the other hand, the issue of whether the requirements for commencement of rehabilitation procedures are satisfied shall be determined as of the time of application. However, in the case where an immediate appeal is filed against a commencement order, it shall be determined as of the time of the appellate trial considering the circumstances that occurred after the commencement order was rendered in light of the core nature of the appellate trial. In the case where a decision to authorize a new rehabilitation plan submitted by the debtor after the commencement order was rendered, the appellate court shall consider such circumstances and determine the existence of reasons under subparagraphs 2 and 3 of Article 42 of the Act. For this purpose, it is reasonable to take into account the possibility of implementation of the newly submitted rehabilitation plan and the possibility of guaranteeing liquidation value for rehabilitation secured creditors, etc. (see Supreme Court Order 98Ma1583, Jan. 11, 199; Supreme Court Order 2005Da147, Jun. 17, 2008, etc.).

B. According to the records, it is insufficient to view that the change of circumstances occurred in terms of the possibility of implementing the first rehabilitation plan due to a large change in the debtor company's assets size or revenue size at the time of application for the commencement of the rehabilitation procedure in this case, which was more than eight days after the decision not to authorize the previous rehabilitation plan against the debtor company becomes final and conclusive. In particular, it is insufficient to view that there was a change of circumstances in favorable terms, such as that prior to the application for the commencement of the rehabilitation procedure in this case, the consent of the rehabilitation secured creditor against the first rehabilitation plan can be obtained.

However, considering the following circumstances revealed through records in light of the legal principles as seen earlier, it is difficult to readily conclude that the application for commencement of rehabilitation procedure of this case is not bona fide or that the application for commencement of rehabilitation procedure of this case is not suitable for the general interest of creditors. The lower court’s judgment otherwise determined is erroneous by misapprehending the legal doctrine on the rehabilitation system, or by failing to exhaust all necessary deliberations, which affected the conclusion

1) The first instance court accepted the application for commencement of rehabilitation procedure of this case and rendered a decision on May 19, 2008 on commencement of rehabilitation procedure of this case and filed an immediate appeal on May 30, 2008. The lower court decided to revoke the order of commencement of rehabilitation procedure of this case on June 18, 2009 after one year or more. The debtor company submitted a new rehabilitation plan and received a decision on authorization of rehabilitation plan from the first instance court on December 3, 2008. Since repayment is in progress according to the current rehabilitation plan, the lower court, which is the appellate court, is able to review the legitimacy of the application of rehabilitation procedure of this case in consideration of the feasibility of the newly submitted rehabilitation plan and guarantee of liquidation value to rehabilitation secured creditors.

Nevertheless, the court below did not examine the possibility of implementing a new rehabilitation plan, and held that the application for commencement is illegal on the ground that the court below did not examine the possibility of implementing the first rehabilitation plan and did not change any particular circumstances.

2) The possibility of implementing the rehabilitation plan is affected not only by the debtor company's increase in its repayment resources, but also by the adjustment of repayment terms of the rehabilitation plan. Thus, if the debtor company can prepare a new rehabilitation plan in the direction of lowering the rate of repayment to the creditors compared with the first rehabilitation plan when applying for the rehabilitation procedure in this case and obtain the consent of creditors in excess of the requirements for the resolution, there is room to view that the change of circumstances occurred compared with the time when the decision not to authorize the

However, the lower court did not examine the fact that the effect of increasing the repayment financial resources of the debtor company is not likely to be effective, but did not examine whether to adjust the repayment rate of the debtor company's rehabilitation plan to lower the repayment rate, whether to meet the requirements for resolution and the possibility of its execution.

4. Conclusion

Therefore, without examining the remaining grounds for reappeal, the order of the court below is reversed, and the case is remanded to the court below for a new trial and determination. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Min Il-young (Presiding Justice)