A. On October 31, 2014, A completed the registration of creation of a mortgage on the basis of the contract concluded on October 30, 2014, the maximum debt amount of which is KRW 100,000,000, the debtor, and the mortgagee A, as the defendant of the right to collateral security (hereinafter “each of the instant real estate”).

(B) The Defendant’s right to collateral security (hereinafter “instant right to collateral security”) based on the registration of the establishment of the above neighboring mortgage.

The Vindication Agricultural Cooperatives filed an application for a voluntary auction of real estate with the Incheon District Court D regarding each of the instant real estate, and the said court rendered a voluntary decision to commence the auction on May 11, 2015.

(hereinafter the above auction procedure is referred to as “instant auction procedure”).

On the other hand, A filed a petition for bankruptcy and immunity with the Incheon District Court No. 2015Hadan6031, 2015Ka6035, and the above court declared A bankrupt on January 22, 2016 and appointed the Plaintiff as the bankruptcy trustee.

On the date of distribution conducted on March 29, 2016, the said auction court prepared a distribution schedule (hereinafter “instant distribution schedule”) that distributes KRW 12,867,135 to the Defendant, who is a mortgagee, as the right to collateral security (hereinafter “instant distribution schedule”).

On April 5, 2016, the Plaintiff raised an objection against the whole amount of dividends to the Defendant on the date of distribution, and thereafter filed the instant lawsuit on April 5, 2016.

【Ground of recognition】 The fact that there exists no dispute, Gap’s evidence 1, Gap’s evidence 5-1, 2, and Gap’s evidence 6, the purport of the whole pleadings

2. Determination as to the cause of action

A. The plaintiff's assertion that Gap's act of setting up a collateral security to the defendant constitutes a subject of avoidance under Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter "the Debtor Rehabilitation Act"). Thus, the defendant's act of setting up a collateral security to the defendant constitutes a subject of avoidance under Article 391 subparagraph 1 of the Debtor Rehabilitation and Bankruptcy Act, and thus, the amount distributed to the defendant based on the instant collateral security should be deleted, and

B. Determination 1 is subject to avoidance under Article 391 Subparag. 1 of the Debtor Rehabilitation Act.