[1] The standard for determining whether a crime of breach of trust is established against the related persons who led the acquisition of a company using a loan or LBO (a summary of Levereverd Buy-Out)

[2] The method of determining whether an entrepreneur had an intent to commit a breach of trust with respect to a business judgment

[1] Articles 355(2) and 356 of the Criminal Act / [2] Articles 355(2) and 356 of the Criminal Act; Article 308 of the Criminal Procedure Act

[1] Supreme Court Decision 2009Do6634 Decided April 15, 2010 (Gong2010Sang, 946), Supreme Court Decision 2010Do1544 Decided December 22, 2011, Supreme Court Decision 2011Do524 Decided June 13, 2013 / [2] Supreme Court Decision 2002Do429 Decided July 22, 2004 (Gong2004Ha, 1480), Supreme Court Decision 2013Do7360 Decided December 26, 2013

Defendant

Prosecutor

Law Firm LLC (Law Firm LLC, Attorneys Lee In-bok et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2012No268 decided July 5, 2012

The appeal is dismissed.

The grounds of appeal are examined.

1. As to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Misappropriation)

A. The so-called “loan purchase or LBO” is not a single legal concept, but a generally accepted corporate acquisition method that offers the assets of the acquired company as a security or appropriates the considerable part of the fund for corporate acquisition with the funds borrowed by having the acquired company repaid the considerable part of the fund with the assets of the acquired company, and its specific form in the transaction reality is very diverse. Unless there is a separate law regulating the acquisition of the loan, it cannot be uniformly determined that the related persons who led corporate acquisition by the means of the borrowing method are not established or not established the crime of breach of trust. Whether the crime of breach of trust is established or not shall be determined individually depending on whether the act in the course of the purchasing of the loan constitutes the elements of the crime of breach of trust (see, e.g., Supreme Court Decisions 2009Do634, Apr. 15, 2010; 2010Do1544, Dec. 22, 2011).

In addition, in determining whether there was an intentional breach of trust against an operator of a company in relation to the management judgment, the same legal principle as the method of proving an intentional breach of trust should apply to general occupational breach of trust. However, even if a manager has made a careful decision with the belief that the management is consistent with the interests of the company on the basis of the information collected in good faith and without intent to take any personal benefits because the risks inherent in the management of the company, even though the management of the company has inherent inherent risks, the prediction is likely to cause losses to the company. In such a case, when easing the interpretation criteria on intentional breach of trust, it would be against the principle of no crime without the law, and even at a policy level, even if the company, which is the source of operating income, causes a serious loss to the society as well as the company in question, and thus, even if it cannot be denied the legal principle that the crime of breach of trust under the current Criminal Act is a crime of no more than 20 construction or 20 construction of the principal's own benefits, and the strict criteria for recognizing the two loss or 3.

B. In full view of the facts charged by Nonindicted Co. 1 (hereinafter “Nonindicted Co. 1”) regarding Nonindicted Co. 2’s acquisition of shares in Nonindicted Co. 1 and Nonindicted Co. 2’s acquisition of Nonindicted Co. 1’s assets, the lower court held that it was difficult for Nonindicted Co. 2 to view that Nonindicted Co. 1 and Nonindicted Co. 2’s acquisition of shares in Nonindicted Co. 1 and acquisition of new shares in Nonindicted Co. 2, who were Nonindicted Co. 1 and Nonindicted Co. 2’s acquisition of new shares in Nonindicted Co. 1, 2000, and that there was considerable amount of funds raised by Nonindicted Co. 2 through the issuance of new shares for new stocks and bonds with trust, and that there was no need for the acquisition of shares in Nonindicted Co. 1 and Nonindicted Co. 2’s acquisition of new shares in Nonindicted Co. 3’s acquisition of Nonindicted Co. 1, 206, which would have been in violation of the aforementioned business regulations, and that the acquisition of shares in Nonindicted Co. 1 and Nonindicted Co. 2 would have been carried out.27.

Examining the reasoning of the judgment below in light of the aforementioned legal principles and records, although there are some defects in the reasons stated by the court below, the court below is justified in holding that the defendant did not have the intent of the crime of breach of trust in offering the assets of the non-indicted 2 as security or early redemption of bonds with warrants during the process of raising the funds for acquiring the non-indicted 2 company, etc., and thereby giving profits to the non-indicted 1 company and causing losses to the non-indicted 2 company. In so doing, contrary to what is alleged in the grounds of appeal, the court below did not err by exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules

2. As to the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement)

Examining the reasoning of the judgment below and the evidence duly adopted by the court of first instance, it is just to maintain the judgment of the court of first instance which found the Defendant not guilty of the violation of the Act on the Aggravated Punishment, etc. of Specific Economic Crimes (Embezzlement) among the facts charged in the instant case on the grounds as stated in its reasoning. Contrary to what is alleged in the grounds of appeal, the court below did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules,

3. As to fraud

Examining the reasoning of the judgment below and the evidence duly adopted by the court of first instance, it is just to maintain the judgment of the court of first instance which acquitted the Defendant of the fraud among the facts charged in the instant case on the grounds as stated in its reasoning. Contrary to what is alleged in the grounds of appeal, the court below did not err by exceeding the bounds of the principle of free evaluation of evidence against logical and empirical rules, or by misapprehending the legal principles

4. Conclusion

Therefore, the appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee In-bok (Presiding Justice)