Where there is a special complaint against a decision to dismiss a subsequent report on rehabilitation claims in the rehabilitation procedure under the Debtor Rehabilitation and Bankruptcy Act, and the rehabilitation procedure has been terminated in the Supreme Court, whether the above special complaint is legitimate (negative)

Where there is a special complaint against a decision to dismiss a subsequent report on rehabilitation claims in the rehabilitation procedure under the Debtor Rehabilitation and Bankruptcy Act (hereinafter “Rehabilitation Act”), and the rehabilitation procedure is pending in the Supreme Court, if the rehabilitation procedure is terminated, the special complaint is unlawful as it does not have any interest in any further objection against the said decision. The reasons are as follows.

Where any rehabilitation claim is reported after the lapse of the reporting period under Article 153 of the Debtor Rehabilitation Act, the rehabilitation court shall examine the requirements of Articles 153 (1) and 152 (2) and (3) that are applied mutatis mutandis under Articles 153 (2) and 153 (2) and make a decision to dismiss the rehabilitation claim according to the legitimacy of the reporting or undergo the inspection procedures.

However, upon the commencement of repayment according to the rehabilitation plan, the court shall render a decision to discontinue the rehabilitation procedure (Article 283(1) of the Debtor Rehabilitation Act), and at the same time the effect of the decision to discontinue the rehabilitation procedure takes place, the debtor restores the right to work and the right to manage and dispose of assets and restores the trustee’s right. Therefore, upon the completion of the rehabilitation procedure, the creditor who reported subsequent completion is entitled to remedy his/her right by filing a lawsuit seeking performance against the debtor, and no longer is entitled to confirmation of the rehabilitation

Articles 152(2) and (3), 153, and 283(1) of the Debtor Rehabilitation and Bankruptcy Act

[Defendant-Appellee] Korea Ministry of Home Affairs (Law Firm Chungcheong, Attorneys Park Jong-il et al., Counsel for defendant-appellee)

Seoul Council Order 2016 Ma100149 dated January 11, 2019

The special appeal shall be dismissed.

ex officio, we examine the legitimacy of the special appeal of this case.

1. Where there is a special complaint against a decision to dismiss a subsequent return of rehabilitation claims in the rehabilitation procedure under the Debtor Rehabilitation and Bankruptcy Act (hereinafter “Rehabilitation Act”), and the rehabilitation procedure is pending in the Supreme Court, if the rehabilitation procedure is completed, the said decision is unlawful as there is no benefit of special complaint as to the said decision of rejection. The reasons are as follows.

A. Where any rehabilitation claim is reported after the lapse of the reporting period under Article 153 of the Debtor Rehabilitation Act, the rehabilitation court shall examine the requirements of Article 153(1) and Article 152(2) and (3) that are applicable mutatis mutandis under Article 153(2) and the requirements of Article 153(2) and (3) and make a decision to dismiss the rehabilitation claim according to the legitimacy of the report or undergo the inspection procedure as the

B. However, upon the commencement of repayment according to the rehabilitation plan, the court shall decide to discontinue the rehabilitation procedure (Article 283(1) of the Debtor Rehabilitation Act), and at the same time the effect of the decision to discontinue the rehabilitation procedure takes place, the debtor restores the right to work and the right to manage and dispose of the property and his/her authority is extinguished. Therefore, upon the completion of the rehabilitation procedure, the creditor who filed a subsequent report can only seek relief from his/her rights by filing a lawsuit seeking performance against the debtor, and no further need to obtain the confirmation of the rehabilitation claim

2. According to the record, the following facts are revealed.

On January 13, 2017, an assembly of related persons for the examination and resolution of a rehabilitation plan was conducted against the debtor EEX Heavy Industries, and the court approved the rehabilitation plan on the same day. The special appellant filed a subsequent report on the completion of rehabilitation claims on April 30, 2018, and the lower court dismissed the subsequent report on January 11, 2019 on the ground that the subsequent report was filed after the assembly of related persons for the examination of the rehabilitation plan was completed. Special appellant filed a special complaint on January 22, 2019. The rehabilitation procedure for the debtor was completed on August 7, 2019.

3. Examining these facts in light of the legal principles as seen earlier, since the rehabilitation procedures for the debtor are completed when the special appeal procedure of this case is pending, the special appeal of this case is unlawful as there is no benefit of dissatisfaction. Therefore, to dismiss the special appeal, and it is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Seon-soo (Presiding Justice)