Law Firm Han-gu, Attorneys Dom-tae et al.

2. The costs of the lawsuit are assessed against the defendant.

A. B (hereinafter referred to as “B”) is a company established on January 4, 2008 and engaged in manufacturing, processing, and selling of optical film-related products in Gwangju City C (hereinafter referred to as “D”).

B. From February 2, 2015, the Plaintiff retired on August 10, 2017 while serving as a member of B, and applied for recognition of the fact of bankruptcy, etc. against the Defendant on the same day.

C. On March 16, 2018, the Defendant notified the Plaintiff on the ground that “B does not report the closure of business,” “B representative E invests approximately 800,000 in the company as the representative director of the Chinese corporation F (State), and manages it until now, and some employees of the company make a separate corporate company G, and are working for or utilizing B factories, and it is difficult to see that the factory is in the process of abolition or abolition, such as where the factory is partially being operated as a result of business trip at the place of business.” (hereinafter “instant disposition”).

[Ground of recognition] Facts without dispute, Gap evidence Nos. 2 and 4, the purport of the whole pleadings

2. Whether the instant disposition is lawful

A. Summary of the plaintiff's assertion

B From August 2017, the entire operation of the B was suspended, all assets and business facilities were seized, and its employees were also retired from the Republic of Korea under the Civil Execution Act. Therefore, since the B’s business is discontinued or at least is discontinued, the instant disposition that did not recognize the fact of bankruptcy, etc. against B is unlawful, even though it is necessary to recognize the fact of bankruptcy, etc. against B.

B. Relevant statutes

It is as shown in the attached Form.

C. Determination

1) According to Article 7(1)3 of the Wage Claim Guarantee Act, where the Minister of Employment and Labor deems that an employer has no ability to pay unpaid wages, etc. in accordance with the requirements and procedures prescribed by Presidential Decree, he/she shall pay the unpaid wages, etc. on behalf of the employer. Article 5(1)2 of the Enforcement Decree of the same Act delegated under the same Act provides that "the business is discontinued as one of the requirements for recognition of bankruptcy, etc. or is discontinued for any of the following reasons," and "as one of the items: (a) where the main business facilities are seized, provisionally seized, or transferred for debt repayment (including where an auction is in progress under the Civil Execution Act); (b) where the authorization, permission, registration, etc. of the relevant business is revoked or cancelled; (c) where the main production of the relevant business or business activities are suspended for at least one month:

2) In the instant case, in full view of the following circumstances, as to whether B’s business constitutes “the process of discontinuance of business or discontinuance of business” as the requirement for recognition of bankruptcy, etc. required under the aforementioned Acts and subordinate statutes, as well as evidence Nos. 1, 3 through 10, Eul’s evidence Nos. 1 and 2, witness E’s testimony, and the entire purport of pleading, it is reasonable to view that B is in the process of discontinuance of business pursuant to Article 5(1)2(a) or (c) of the Enforcement Decree of the Wage Claim Guarantee Act because B’s major business facilities are seized under the status of suspension of business production or business activity, or when the main production or business activity was suspended for not less than one month. Thus, the instant disposition issued on a different premise should be revoked as unlawful.

A) B was established in around 2008 and 40 full-time workers up to the Plaintiff’s retirement, and run the manufacturing and processing and distribution business of optical film-related products using machinery and equipment installed in the factory in Gwangju City C (hereinafter “instant factory”). The size of sales amounted to KRW 20 billion a year.

B) B obtained a loan of KRW 3.8 billion from H in early 2015. Around May 2016, B was placed in the position to repay the loan due to the extension of loan repayment, and the other financial institutions and bond holders were unable to repay the loan, and B’s sales credit was seized due to the failure to repay the loan. As to the real estate, factory machinery, etc. of the instant factories, etc., including the instant factories, which were offered as collateral, owned by B or the representative director E, the voluntary auction procedure was initiated on August 8, 2017 by Suwon District Court I and J(combined).

C) From June 2017, B discontinued the operation of the instant plant around July 2017 while sales had not been conducted, and workers, including the Plaintiff, retired B from around August 2017.

D) Although B had not filed an application for recognition of the Plaintiff’s bankruptcy, etc. and filed a report of the closure of business at the time of the instant disposition, in full view of the foregoing circumstances, it is sufficient to recognize that B had lost the human and physical basis for production or business activities, which was at least the suspension of production or business activities, around August 2017.

E) Meanwhile, the circumstance that B held shares of a corporation located in China or that the factory of this case was operated after August 2017 does not interfere with the above recognition.

In other words, the factory of this case appears to have been operated for the operation of the company G established around September 21, 2017 by some employees who worked in B. In light of the following: (a) the company is a newly incorporated company with a separate legal personality from B; (b) the location of its head office was changed to K in Gwangju City around October 16, 2017; and (c) there is no circumstance to deem that E, the representative director of B, was directly involved in the operation of the above company, beyond leaving the use of the factory of this case in the auction procedure or implieding it, solely on the ground that G was operated temporarily using the factory of this case, it cannot be deemed that B continued production or business activity after recognizing that it had been in the status of production or business suspension; and (d) G continued to be a business owner that can be deemed to have the same as B.

3. Conclusion

Therefore, the plaintiff's claim of this case is reasonable, and it is decided as per Disposition by admitting it.

Judges Lee Jae-soo

Judges public-private partnership

A person shall be appointed.