[1] Where the reorganization plan of the reorganization company which is a primary debtor provides for conversion of investment in lieu of satisfaction of the reorganization claim, the extent of extinction of the guaranteed obligation of the guarantor of the reorganization company

[2] The case holding that the guaranteed obligation of the reorganization guarantor of the reorganization company shall be limited to the amount calculated by multiplying the issue value of the above stocks by the number of stocks converted into investment, even if the value of the stocks converted into investment exceeds the issue value

[3] The method of calculating the market price of equity swap stocks under the net asset value law, etc. in a case where the reorganization company implements large-scale reduction of capital for the old stocks, conversion of investment into equity for reorganization creditors, etc., and large-scale issuance of new stocks to the underwriter who prepaid the purchase price of new stocks at short intervals

[4] Where a reorganization creditor calculates the amount of actual satisfaction through a debt-equity swap of the reorganization company, which is the primary debtor, and evaluates the value of a debt-equity swap to determine the scope of extinguishment of guaranteed liabilities of the reorganization company, the person who bears the burden of proving the value of the reorganization

[1] Article 240 (2) of the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005) provides that the reorganization plan does not affect any rights of reorganization creditors or security holders who hold a guarantor or a person who bears obligations together with the company, and any security provided by any person other than the company for reorganization creditors or security holders. However, if the reorganization plan of the company which is the primary debtor provides that a conversion of investment is made in lieu of the repayment of the reorganization claim, the guarantor's guarantee obligation of the reorganization company shall be evaluated as at the time of the entry into force of the issuance of new shares through a conversion of investment and evaluated the market price of new shares acquired by the reorganization creditors as at the time of the entry into force of

[2] In a case where a reorganization creditor, who is the principal debtor, was converted into a debt according to the original reorganization plan of the reorganization company, the case holding that the guaranteed liability of the reorganization company, even if the value of the share exceeds the issue value at the time of conversion into a debt, shall not be deemed to be extinguished only to the extent of the amount calculated by multiplying the issue value of the share by the number of shares converted into a debt

[3] Where a reorganization company submits a reorganization program to implement a large-scale reduction of capital for the old stocks, conversion of investment to reorganization creditors, and large-scale new stocks for the underwriter who prepaid the subscription price at a short time under the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005), and its contents are approved and announced, the financial structure and the number of issued stocks of the reorganization company under the reorganization program shall be a reliable information that has already been disclosed and available to the market. Thus, even if the new shares issued through a conversion into equity (hereinafter “stock”) have not yet been implemented pursuant to the reorganization plan, it is reasonable to view that the market price of the stock into a conversion into equity will be implemented on a large scale without considering the net asset value of the stock issued at the time of the conversion into equity and the net asset value of the stock not yet reflected in the net asset value of the stock after the conversion into equity investment due to lack of special circumstances.

[4] In case where the reorganization company, which is the principal debtor, calculates the amount substantially satisfied by the reorganization creditor through a debt-equity swap conducted under the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005), and evaluates the value of a debt-equity swap to determine the scope of extinguishment of the guarantor's guaranteed obligation, the party asserting that the guaranteed obligation has been extinguished by such debt-equity swap.

[1] Articles 22(1) (see current Article 206(1) and 240(2) (see current Article 250(2) of the Debtor Rehabilitation and Bankruptcy Act), 428 and 466 of the former Company Reorganization Act (amended by Act No. 7428, Mar. 31, 2005; Article 206(2) (see current Article 250(2) of the Debtor Rehabilitation and Bankruptcy Act); Article 428 and 466 of the Civil Act / [2] Article 22(1) of the former Company Reorganization Act (amended by Act No. 7428, Mar. 31, 2005; Article 206(1) of the Addenda to the Debtor Rehabilitation and Bankruptcy Act; Article 240(2) (see current Article 250(2) of the Debtor Rehabilitation and Bankruptcy Act); Article 240 of the former Debtor Rehabilitation and Bankruptcy Act (see current Article 250(2) of the Debtor Rehabilitation and Bankruptcy Act); Article 268 of the former Debtor Rehabilitation and Bankruptcy Act (see current Article 206(2) of the Debtor Reorganization Act)

[1] Supreme Court Decision 2002Da12703, 12710 decided Jan. 10, 2003 (Gong2003Sang, 612) Supreme Court Decision 2009Da47739 decided Nov. 12, 2009 (Gong2009Ha, 2084)

Plaintiff (Law Firm Ulil, Attorneys Shin Il-il et al., Counsel for the plaintiff-appellant)

Seoul Guarantee Insurance Co., Ltd. and one other (Law Firm Hongle et al., Counsel for the plaintiff-appellant)

Seoul High Court Decision 2009Na33688 decided September 24, 2009

All appeals are dismissed. The costs of appeal are assessed against the Plaintiff.

The grounds of appeal are examined.

1. As to the extent that the guaranteed obligation ceases to exist due to a conversion into investment under the original reorganization program

A. Article 240 (2) of the former Company Reorganization Act (repealed by Article 2 of the Addenda of the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005, hereinafter the same applies) provides that the reorganization plan does not affect any rights of reorganization creditors or security holders against guarantors or other persons who bear obligations together with the company, and any security provided by other persons than the company for reorganization creditors or security holders. However, where the reorganization plan of the reorganization company, which is the principal debtor, provides that a conversion of investment shall be made in lieu of satisfaction of the reorganization claim, the guarantor's guarantee obligation of the reorganization company shall be deemed to have been repaid within the scope of the amount of the reorganization claim calculated by evaluating the market price of new stocks acquired by the reorganization creditor as of the date of entry into force of the issuance of new stocks through a conversion of investment and in lieu of payment of the amount of the reorganization claim (see, e.g., Supreme Court Decisions 2002Da12703, Nov. 10, 2003; 2009>

B. Examining the above legal principles in light of the above, although the two reorganization creditors life insurance company (hereinafter “dudual life insurance company”) received 187,500 won per share (10,000 won) of registered common shares of KRW 5,000 per share under the original reorganization plan of the time comprehensive construction company, which is the main debtor, according to the original reorganization plan of the reorganization company, which is the reorganization company, and around the time of the above debt-equity swap, the above share value exceeds 10,000 won, the Non-party’s guaranteed liability of the non-party, which guaranteed the obligation for the two life insurance of the reorganization company, shall be limited to the amount calculated by multiplying the above share price by the number of shares converted into equity, and shall not be deemed to have expired

The judgment of the court below which seems to be the same purport is just, and there is no error in the misapprehension of legal principles as to the scope of extinguishment of guaranteed liabilities due to the omission of judgment or debt-equity swap by

2. As to the number of issued stocks on the basis of the appraisal value per stock converted into investment

A. A. The technical purpose of the reorganization company’s implementation of the corporate acquisition procedure under the former Company Reorganization Act is to prevent a large-scale reduction of capital for the old stocks, a large-scale conversion of investment to reorganization creditors, etc., and a large-scale issuance of new stocks to underwriters who prepaid the acquisition price of new stocks at a short time, etc., and where the reorganization plan is adopted and authorized, and its contents are publicly announced, the financial structure and the number of issued stocks of the reorganization company pursuant to the reorganization plan shall be a certain information available for disclosure to the market. Thus, even if the issuance of new stocks through a conversion of investment (hereinafter “investment conversion stocks”) is not implemented yet at the time of the effective date of the issuance of the stocks issued through a conversion of investment (hereinafter “investment conversion stocks”), it is reasonable to view that the market price of the investment conversion stocks is formed by reflecting the circumstance that the large-scale investment conversion of new stocks will be conducted without considering the net asset value and the net asset value of the company after the conversion of investment stocks, unless there are special circumstances.

B. According to the reasoning of the judgment below, New Co., Ltd. (hereinafter referred to as "New Co., Ltd."), new Co., Ltd. (hereinafter referred to as "New Co., Ltd. (hereinafter referred to as "New Co., Ltd."), which combines new Co., Ltd. (hereinafter referred to as "New Co., Ltd."), takes effect on December 5, 200 through the procedure for corporate acquisition for business normalization under the former Company Reorganization Act; 6,24.7 billion won between the underwriter and new Co., Ltd. (hereinafter referred to as "Co."), and entered into an investment agreement with 06.3 new Co., Ltd. (hereinafter referred to as "new Co., Ltd.") to underwrite new Co., Ltd. (hereinafter referred to as "new Co., Ltd."), the period for submission of new Co., Ltd. (hereinafter referred to as 200,68, 2000, 300,0000,000 won new Co., Ltd. (hereinafter referred to as "new Co."), the above new Co.

C. Examining this in light of the legal principles as seen earlier, in this case, where the scope of extinguishment of the guaranteed debt of the non-party, the guarantor, depending on the amount actually satisfied through the debt-to-equity swap according to the above change plan, which was the reorganization creditor at the time of the above debt-to-equity swap and the defendant Guarantee Insurance Co., Ltd. at the time of the above debt-to-equity swap varies depending on the extent of the amount substantially satisfied, the total sum of the number of issued stocks of the reorganization company as of February 4, 2004 (113,889 shares after the previous merger + 612,651 shares after the previous merger) shall be deemed as 726,540 shares, but it is not reasonable to calculate the value per share of the instant debt-to-equity swap by simply dividing the net asset value of the reorganization company into the number of shares. In accordance with the above change plan, the value of the instant share should be calculated by taking into account the circumstances that the issued shares will increase accordingly.

The judgment of the court below to the same purport is just and acceptable, and there is no error in the misapprehension of legal principles as to the appraisal of the equity investment shares of the reorganization company.

3. As to the net asset value and the net asset value per share of the debt-to-equity swap shares of New Coina:

(a) Where the reorganization company, which is the principal debtor, calculates the amount substantially satisfied by the reorganization creditor through a debt-equity swap conducted under the former Company Reorganization Act, and evaluates the value of a debt-to-equity swap in order to determine the extent of the extinguishment of the guarantor's guaranteed obligation by the reorganization company, the reorganization company's corporate value or its value per share shall be the party asserting that the guaranteed obligation has been extinguished

B. According to the records, there is no objective data to find that the Defendants’ value of New Coina, which serves as the basis for calculating the net asset value per share of the instant converted equity shares, is 625,368,425,00 won, and that the net asset value per share of the instant converted equity shares is 15,583 won, and otherwise, the net asset value per share of the instant converted equity shares exceeds 625,368,425,000 won and exceeds 868,729,894,073 won as alleged in the grounds of appeal, or exceeds 15,583 won per share.

Therefore, the conclusion of the court below that deemed the net asset value per share of the instant equity swap to be 15,583 won is acceptable. Contrary to the grounds of appeal, the court below did not err by misapprehending the legal principles as to the net asset value or the valuation of the equity shares of the reorganization company, thereby violating the logical and empirical rules and exceeding the bounds of free evaluation of evidence while selecting evidence and comparing and evaluating the probative value of evidence, or by exceeding the bounds of the principle of free evaluation of evidence.

4. Conclusion

Therefore, all appeals are dismissed, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices.

Justices Park Si-hwan (Presiding Justice)