[1] The case where the proviso of Article 163 subparagraph 2 (b) of the Company Reorganization Act exceptionally allows a set-off

[2] The case holding that in case where the creditor financial institutions council has consented to the retirement of stocks of the reorganization creditor company held by the company for corporate restructuring, set-off against the obligation of payment of stock retirement price with promissory note bonds held by the reorganization creditor company against the company subject to restructuring prior to the commencement of stock retirement and reorganization procedure shall not be allowed as it constitutes an abuse of the right of offset under Article 163 subparagraph 2

[1] The purport of the proviso of Article 163 subparagraph 2 (b) of the Company Reorganization Act exceptionally permits a set-off is to protect legitimate expectations of a set-off that the reorganization creditor, etc. had possessed prior to knowing the crisis situation such as the suspension of payment. Therefore, the legal relation causing the debt burden, which corresponds to the "reasons that occurred before the reorganization creditor becomes aware that the payment is suspended," under the proviso of Article 163 subparagraph 2 (b) of the Company Reorganization Act, should be directly the degree of causing specific expectations of set-off to the extent that the exercise of the right of set-off should be permitted even from the perspective of fairness of the total creditor.

[2] The case holding that in case where the creditor financial institutions council has consented to the retirement of the reorganization creditor company held by the company for corporate restructuring, set-off of the reorganization creditor company's debt with a promissory note payment obligation held by the company for the company subject to restructuring prior to the commencement of stock retirement and corporate reorganization procedure shall not be allowed as it constitutes an abuse of the right of set-off under Article 163 subparagraph 2 of

[1] Article 163 subparagraph 2 (b) of the Company Reorganization Act / [2] Article 163 subparagraph 2 of the Company Reorganization Act, Article 2 of the Civil Code, Article 492 of the Civil Code

[2] Supreme Court Decision 2002Da59481 decided Apr. 11, 2003 (Gong2003Sang, 1156)

Administrator Kim Jong-sik Co., Ltd. (Law Firm Kim, Kim & Lee, Attorneys Park Jong-ho et al., Counsel for defendant-appellant)

(1) Any person who is a party to a contract shall be liable to compensate for the losses incurred by the party to the contract.

October 23, 2003

1. The defendant shall pay to the plaintiff 14,299,528,935 won with 5% per annum from November 28, 2000 to May 31, 2003 and 20% per annum from the next day to the date of full payment.

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

3. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Basic facts

The following facts may be acknowledged as either in dispute between the parties or in full view of the purport of the entire pleadings in the entries in Gap 1 and 2:

A. If the company reorganization procedure was commenced on November 30, 200 after filing an application for the commencement of the company reorganization procedure with the Incheon District Court 2000 Da12001, the company Daewoo Motor Co., Ltd. (hereinafter referred to as the "Emort Motor Co., Ltd") was appointed as the manager on June 16, 2000 when the lawsuit in this case was in progress, he resigned from the administrator on June 16, 2003 when the lawsuit in this case was in progress, and he was appointed as the co-manager on June 16, 200 when he was in charge of the sale, liquidation, etc. of the reorganization company's overseas subsidiaries, and Kim Jong-sik took over the litigation in this case as the administrator Kim-sik (hereinafter referred to as

B. The defendant (Pacific International :7,107,470 shares; non-party 1:82,905 shares; Daewoo Electronic : 1,922,75 shares; 1,922,75 shares; 1,836,194 shares; 20,178 shares; 20,12,369,502 shares; 369,502 shares; 20,755 shares (hereinafter referred to as "shares") were present at a provisional general meeting of shareholders; 47,77,00 shares; and 1,92,75 shares, which were held by the above shareholders; and 1,92,75 shares, which were held by the above shareholders; and 47,777,00 shares, were to be paid for the same period of objection as the creditors during the period of capital reduction; and 1,836,194 shares, which were to be paid for the same period of capital reduction within the same period of 2717,737,27.7.

2. Determination:

According to the above facts, the retirement of the shares of this case by the capital reduction resolution of the defendant company was effective on November 28, 200 on the date following the expiration date of the above objection period (Article 343(2) and Article 441 of the Commercial Act). The defendant is obligated to pay 14,29,528,935 won (1,92,75 shares x 7,437 shares x 7,437 shares) and damages for delay.

2. The defendant's defense of set-off and judgment thereon

A. The parties' assertion

(1) The defendant asserts that the defendant's claim for the principal and interest of promissory note amounting to 12.9 billion won per face value against the defendant's Daewoo Motor is an automatic claim, and that the claim for the stock retirement price of this case against the defendant against the defendant was offset by 13,871,210,958 won per par value, and only 428,317,977 won (14,29,529,528,935 won - 13,871,210,958 won per face value per share with the claim for the stock retirement price of this case against the defendant of Daewoo Motor.

(2) As to this, the Plaintiff first asserted that the Defendant’s claim for the share retirement price of this case, which is the passive claim, constitutes “when the reorganization creditor, knowing that there was an application for suspension of payment, bankruptcy, commencement of composition, or commencement of reorganization proceedings, bears an obligation to the company with knowledge that there was an application for suspension of payment, or commencement of reorganization proceedings,” and thereafter, the Plaintiff asserted that the exercise of the Defendant’s right of offset cannot be permitted in light of the circumstances leading up to the acquisition of the instant shares, etc., even though the exercise of the Defendant’s right of offset does not fall under the foregoing prohibition clause.

(b) Markets:

(1) The basic facts

The following facts are not disputed between the parties, or each statement in Gap 3 through 24, Eul 1 through 10, and 14 (part 14), and the witness non-party 2's testimony in full view of the whole purport of the pleadings. Contrary to this, Eul 14 and part of the witness non-party 2's testimony are not trusted, and the witness non-party 2's testimony is not sufficient to reverse it and there is no other counter-proof.

(a) the offer of security for 9 affiliated companies of Kim U-Seng and Treatment Group 12 affiliate companies;

① Around December 1998, when an affiliated company of the so-called Treatment Group (hereinafter “affiliated company”) was unable to repay loans due to unreasonable business expansion, borrowing management, and the occurrence of the IMF situation, the creditor financial institutions, including the non-party corporation, etc. entered into a financial restructuring agreement with the Treatment Group to improve the financial structure through the sale of assets, the debt redemption through the sale of assets, the separation, sale, merger, etc. between the Treatment Group and the Treatment Group.

② However, the liquidity crisis deepening above points led to serious difficulties for the repayment of the early short-term credit, and the Financial Institutions Council agreed on July 19, 199 to extend the time limit for the early short-term credit to the affiliates of the Treatment Group for about six months, and to provide the above affiliates with approximately 4 trillion won new funds, and to secure this, to receive shares and real estate equivalent to KRW 10 billion from the affiliates of the Treatment Group, including personal property of approximately 1.3 billion won, as a joint security for the extension of the said time limit and new credit extension.

③ Accordingly, on July 25, 1999, the Council of Financial Institutions established a collateral security right on the real estate owned by the affiliates of Kim Jong-dong and Treatment Group. On the other hand, on July 25, 1999, on the other hand, on the part of Kim Jong-dong and nine affiliate companies (Seng Heavy Industries Co., Ltd., Treatment Heavy Industries Co., Ltd., Orion Electric Co., Ltd., Treatment Automobile Sales Co., Ltd., Oriondong Co., Ltd., Dives Korea, Inc., Ltd., Inc., Ltd., Ltd.) the above extension of period and new support credit as collateral obligation, and the above extension of period and new support credit amount as 17 trillion won include 3,779,127 shares issued by the affiliates of Kim Jong-dong Co., Ltd. (which include some of the shares of this case) and nine affiliate companies (which include 7,923,515 shares issued by the Defendant Co., Ltd., Ltd., Ltd.) concluded a collateral pledge right to dispose of the above shares issued by the Council.

④ Despite the above efforts for rehabilitation through the offer of collateral, the Treatment Group failed to overcome the continued financial difficulties, and on August 26, 1999, 12 affiliate companies of the Treatment Group (including treatment automobiles) were selected as companies subject to corporate financial structural improvement (one-person workout program) and began to proceed with the workout procedure, such as preparing a workout program for each heat company and concluding a workout program. On the other hand, the Treatment Automobile was in progress as it suspended the workout program on November 9, 200, and it was in progress on November 10, 199, and as seen earlier.

(B) Request for commercial retirement of the Defendant’s stocks and treatment stocks owned by the Defendant’s Kim UV and holding them at a cost.

① On March 31, 200, the Defendant: (a) laid off and reduced shares issued by the above Defendant Company (3,779,127 shares issued by the said Defendant Company (39.05% of the total number of issued shares) as collateral from treatment of the non-party Company (18.62% of the total number of issued shares); and (b) demanded that the Council of Financial Institutions (the first creditor bank, the first creditor bank, the first creditor bank, the first creditor bank) implement a restructuring plan of the Treatment Group and a special financial restructuring agreement with the claim group; and (c) request that the Council of Financial Institutions (the first creditor bank, the second creditor bank, the second creditor bank, the second creditor bank), in order to reduce the amount of shares issued by the Defendant, which were offered as collateral, as collateral, to reduce the amount of shares issued by the said Defendant Company; and (d) request that the Council of Financial Institutions (the first creditor bank, the second creditor bank, the second creditor bank, the second creditor bank), in order to reduce the amount of shares issued by the Defendant as collateral.

② On April 6 of the same year, the Council of Financial Institutions approved the Defendant’s above-mentioned reduction of capital, but it decided to deliver the actual shares to the offerer and terminate the security if the stock retirement price was fully deposited in the deposit account in the name of Kim Jong-dong established in the Japanese bank and treatment corporation. The Council notified the Defendant on the 11st of the same month that the payment of the stock retirement price was to be distributed to creditor financial institutions later in accordance with the allocation standards, and that the Defendant approved the cancellation of the security for the capital reduction and the capital reduction, and that the bank account was opened in the name of the company treated as the payment of the stock retirement price.

③ Accordingly, around May of the same year, the Defendant retired shares above 7,923,515 shares issued by the Defendant, which had been offered as security, and paid the amount for the retirement of shares.

(C) The process of acquiring the instant shares of the treatment Motor Vehicle

① On June 16, 200, the Council of Financial Institutions reduced its members to 38 creditor financial institutions. As seen earlier, the scope of the secured liabilities of common collateral, such as stocks and real estate, which were provided as security by the affiliates of Kim Yong-J and Treatment Group, was changed to the new loan obligations of KRW 3.9,46.4 billion for corporate improvement except for the loans subject to extension of the due date, and the debtor was changed to 6 affiliated companies (including treatment of the stock company, treatment Heavy Industries, treatment Motor Vehicles, Telecommunications, Treatment Electronic Co., Ltd.), including treatment Motor Vehicles, etc., which were provided as new funds, and the security offered by Kim Yong-J changed to the joint collateral obligations of the relevant affiliate.

② On July 18 of the same year, the Defendant requested the Council of Financial Institutions to verify and change the number of shares to be held by each of the above companies since the shares in the name of Kim Jong-dong were donated to the creditor financial institutions as a collateral by the receiving companies of the above 3,779,127 shares in the name of Kim Jong-dong, and they were in possession of the above companies. Accordingly, the Council of Financial Institutions requested to clarify the distribution of the proceeds from the disposal of shares in the name of Kim Jong-dong offered as joint collateral of the issuing companies, 3,79,127 shares in the name of Kim Jong-dong, 1,922,75 shares, 1,836,194 shares, and 20,178 shares, which were donated from Kim Jong-dong, to the Defendant at the time of concluding the agreement on the deposit of shares in the name of the said company, and then the Council of Financial Institutions was approved to the Defendant for the deposit of shares in the name of the said company.

③ In accordance with the above resolution of the Financial Institutions Council on September 21, 21 of the same year, Kim Jong-woo entered into a contract to donate 1,922,755 shares (the shares of this case), to treatment Electronic Co., Ltd., 1,836,194 shares, and 20,178 shares to transfer the corresponding right to claim the return of share certificates to the Financial Institutions Council on the same day, and thereafter, the defendant entered into a transfer of the right to claim the return of share certificates to the Financial Institutions Council on the same day. At that time, the defendant entered into a transfer of the above shares including the shares of this case, 3,779,127 shares in the name of the beneficiary company.

④ On September 27, 200 of the same year, the Financial Institution Council transferred to the Korea Asset Management Corporation the summary pledge established with the creditor financial institutions, the debtor and the pledger, and delivered the share certificates of this case to secure the amount of KRW 718.5 billion on the commercial paper bonds of the creditor financial institutions, and the stock certificates of this case. The above creditor financial institutions notified the Defendant of the transfer of the above bonds and pledge.

(D) The occurrence of the instant share retirement price and the Defendant’s expression of intent to offset the shares

① On October 26, 200, at a special shareholders’ meeting, the Defendant passed a resolution on the temporary retirement of 3,779,127 shares including the shares in this case, and the resolution became effective on November 28, 200, when the period for raising an objection by the creditors expires.

② On the other hand, after the company reorganization procedure for Daewoo Motor Vehicle has commenced, the Defendant only requested the extension of the payment deadline for the Plaintiff’s claim for the retirement price payment of the instant shares, and did not express its intent or intent as to the exercise of set-off rights at all. On December 27, 2000 before the expiration of the period for reporting the company’s own reorganization claim, the Defendant notified the Plaintiff on August 18, 1999 that the amount of the principal of the Promissory Notes issued by Daewoo Motor Co., Ltd. and the interest payment claim for arrears from August 27, 1999 to the date of presentment of the payment of the said Promissory Notes, which is the date of payment of the said Promissory Notes, would be the automatic claim for the payment of the interest for delay from August 27, 199 to the date of full payment, and the declaration of intention of set-off reached the Plaintiff on August 28, 200.

(2) Determination as to whether the Defendant’s exercise of the right of offset in this case constitutes the prohibition of offset under Article 163 subparag. 2 of the Company Reorganization Act

(A) First, as seen earlier, it constitutes the suspension of payment for the vehicle which was finally disposed of on November 9, 200, and the Defendant’s obligation to pay for the stock retirement of this case, which was deemed as the passive claim, occurred on the 28th of the same month thereafter, and at the time of the occurrence of the above obligation, the Defendant was aware of the fact that the payment was suspended, and thus, the Defendant’s exercise of the right of offset in this case constitutes a case where the Defendant, a reorganization creditor, was aware of the fact that the payment was suspended, and thus, is prohibited by Article 163 subparag. 2 of the Company Reorganization Act.

(B) On this issue, the Defendant asserted that the obligation to pay for the retirement of shares of this case constitutes an exceptional set-off clause under Article 163 subparagraph 2 (b) of the Company Reorganization Act, since the special resolution of the provisional general meeting of shareholders of the Defendant company, which is the legal relation that forms the basis of the occurrence, consists of October 26, 2000, prior to November 9, 200, which is the date of payment suspension of treatment automobiles. The Defendant’s obligation to pay for the retirement of shares of this case was arising from the cause that occurred before the Defendant becomes aware that the payment suspension of treatment automobiles was suspended, and thus the exercise of the right to offset

However, the purport of the proviso of Article 163 subparagraph 2 (b) of the Company Reorganization Act exceptionally grants a set-off is to protect the legitimate expectation of a set-off that the reorganization creditor, etc. had had before ascertaining the crisis situation such as the suspension of payment. Thus, the legal relation causing the debt burden corresponding to the "reasons that occurred before the reorganization creditor becomes aware that the payment has been suspended" in the proviso of Article 163 subparagraph 2 (b) of the Company Reorganization Act should be the direct measure to the extent that the exercise of the right of set-off should be permitted even from the perspective of fairness of all creditors, and it does not constitute only the general expectation of set-off, but it does not constitute the above basic fact. As seen in the above basic fact, it was conducted upon the approval of the Financial Institution Council under the premise that the share retirement was distributed to and reverted to creditor financial institutions. The defendant first requested a postponement of payment with respect to the claim for the retirement payment of the plaintiff's shares after the company's commencement of the company, even if the defendant requested the postponement of payment, the defendant did not have accepted the above proviso of temporary retirement.

(3) Assumptive determination as to whether the defendant abused the right of set-off

(A) Even if the Defendant’s exercise of the right to offset in this case constitutes an exceptional set-off clause in subparagraph (b) of the said proviso, it cannot be permitted as follows as it constitutes an abuse of the right to offset.

(B) First, it is reasonable that the exercise of the right of set-off goes beyond the purpose and function of the set-off system and is not allowed because it is against the good faith principle or it abused the right of set-off if there is no value to legally protect the right of set-off in light of the purpose and background of acquiring the claim or obligation subject to set-off, and the specific and individual circumstances where exercising the right of set-off is exercised, since it is based on the fact that the purpose of the set-off system is to smoothly and fairly deal with the obligation of both parties by settling the claim and obligation, and the existence of the claim in fact for the person who intends to exercise the right of set-off is worth legally protecting the right of set-off (see Supreme Court Decision 2002Da59481, Apr. 11, 2003).

(C) Comprehensively considering the above evidence and the overall purport of oral arguments as to the shares held by the shareholders' general meeting of financial institutions, i.e., repayment of existing obligations to creditor financial institutions, such as subsidiaries with liquidity crisis, and i., provision of new funds to the associations of financial institutions for the purpose of using them for the improvement of its financial structure and corporate rehabilitation. Accordingly, the associations of financial institutions have the authority to dispose of these shares and to actually dispose of the shares in their name. ii) The defendant proposed that the funds of the Association of Financial Institutions will be sold to the Association of Financial Institutions be disposed of at the time of the request for disposal of the shares of the Financial Institutions, and that the funds will be disposed of under the name of the Association of Financial Institutions to the effect that the funds would be disposed of under the agreement of the Association of Financial Institutions to the effect that the funds would have been disposed of under the name of the Association of Financial Institutions. 32.28% of the funds of the Financial Institutions will be disposed of for the purpose of the Association of Redemption of the Financial Institutions to be disposed of under the name of its own shares.

In addition, there was such an implied agreement between the defendant and the financial institution council, but there was no reason for the defendant to consent to the stock retirement in this case if it was anticipated that the defendant would offset the stock retirement price claim into several bonds. On the other hand, if the defendant would not have passed a resolution of the financial institution council to transfer the stock in the name of treatment automobile for the purpose of financial structure such as the redemption of the loan, it was not likely that the defendant would offset the stock retirement price claim with several bonds. In addition, the claim for stock retirement price, which is the passive bond, was not generated without the consent to the stock retirement of the financial institution council (or creditor financial institutions of treatment automobile) which is the actual disposal authority, and was resolved to retire the stock price claim under the premise of his consent. Accordingly, it was not possible for the defendant to use the stock retirement price claim as a collateral against the defendant's trusted bond, which is automatic bond, and it was not possible for the Korea Asset Management Corporation to use it as a collateral against the defendant's trusted bond, and it was not possible for the defendant to claim the stock retirement price of this case against the defendant.

(4) Therefore, the defendant's defense of set-off is without merit.

3. Conclusion

Therefore, the defendant is obligated to pay to the plaintiff 14,299,528,935 won and damages for delay at the rate of 5% per annum from November 28, 2000 to May 31, 2003, which is the effective date of the above resolution of retirement, and 20% per annum from the next day to the full payment date under the Act on Special Cases Concerning the Promotion, etc. of Legal Proceedings. Thus, the plaintiff's claim of this case is justified and it is so decided as per Disposition.

Judges Cho Jong-sung (Presiding Judge)