New Bank of Korea (Law Firm LLC, Attorneys Seo-young et al., Counsel for the defendant-appellant)

Jinch Co., Ltd. (Attorney Choi Han-chul, Counsel for the plaintiff-appellant)

Lee Pd Co., Ltd. and two others (Law Firm Ba, Attorneys Yang Woo-won, Counsel for the plaintiff-appellant)

April 3, 2012

1. Defendant Pream Co., Ltd. and Defendant 2 jointly and severally paid to the Plaintiff the amount of KRW 185,871,441 as well as KRW 154,85,41 as well as KRW 19% per annum from October 26, 2010 to November 5, 2010, and KRW 20% per annum from the following day to the date of full payment. Defendant 2 shall be paid within the limit of KRW 260,00,000 per annum.

2. A. A. Revocation of the assignment of claim agreement concluded on March 16, 2009 between Defendant P. P. P. and Defendant 3 (Defendant of the appellate court and the Supreme Court Decision) with respect to the claims indicated in the separate sheet.

B. Defendant 3 shall pay to the Plaintiff 72,620,641 won and 5% interest per annum from the day immediately following the day the judgment of this case became final to the day of complete payment.

3. The costs of lawsuit shall be borne by the Defendants.

4. Paragraph 1 can be provisionally executed.

The same shall apply to the order.

1. Determination as to the request for loans

A. Facts of recognition

1) On July 14, 2008, the Plaintiff entered into a credit transaction agreement with Defendant Co., Ltd. and Daehan (hereinafter “Defendant Co., Ltd.”) with a credit amount of KRW 200,000,000,000, and with July 14, 2009, with interest market standard interest rate of KRW 16% per annum or 21% per annum, and lent KRW 200,000 to the Defendant Co., Ltd., and Defendant Co., Ltd., the representative of the Defendant Co., Ltd., guaranteed the Defendant Co., Ltd’s obligations within the limit of KRW 260,000 on the same day.

2) From May 2009, Defendant Company lost the benefit of time by delaying the payment of the principal and interest of the loan from around October 25, 2010, the principal and interest of the loan unpaid as of October 25, 2010 are totaling KRW 185,871,441 (= Principal KRW 154,855,411 + Interest KRW 31,016,030 + Interest KRW 31,030). The compensation rate for delay for principal is 19% per annum.

[Reasons for Recognition] Unsatisfy, Gap evidence 1 to 3, the purport of the whole pleadings

B. Determination

Defendant 2, a joint and several surety, jointly and severally and severally with the Defendant Company that is the principal debtor, shall pay to the Plaintiff the amount of KRW 185,871,441 and the principal amount of KRW 154,85,41 among them, with 19% per annum from October 26, 2010 to November 5, 2010, which is the last delivery date of a copy of the complaint of this case, and 20% per annum under the Act on Special Cases concerning the Promotion, etc. of Legal Proceedings from the next day to the day of full payment, and Defendant 2 is liable to pay damages for delay within the limit of KRW 260,00,000, which is the guarantee limit amount.

2. Determination on the revocation of fraudulent act and the claim for restitution

A. Establishment of fraudulent act

1) Basic facts

A) On October 13, 2006, as a corporation engaged in the meat processing manufacturing and wholesale retail business, the Defendant Company leased from Nonparty 1 (the Nonparty in the judgment of the Supreme Court) the site and its ground factory building in Namyang-si (hereinafter address omitted); ② from Nonparty 1’s Intervenor who works as representative director, all facilities within the above factory building (hereinafter collectively referred to as “the above site, factory building and facilities”) were leased deposit amounting to KRW 80 million (hereinafter referred to as “the lease deposit in this case”); and from October 20, 2006 to October 19, 2007, the term of lease was set to be leased from Nonparty 1 (the Nonparty in the judgment of the Supreme Court omitted); and the Defendant Company received the lease deposit in this case from the Plaintiff’s Intervenor who works as representative director and renewed the lease contract in this case after the delivery of the lease contract in this case; and the period was expired.

B) Defendant 3 engaged in the business of importing and selling meat; Defendant 3 traded with Defendant Company (Nonindicted 5 resigned on April 2, 2008, and Defendant 2 was appointed as director on the same day) who was employed as a director by Nonparty 5 of the above Defendant, and Defendant 2 from November 2006. The Defendant Company, around the second half of the year of 2008, requested Defendant 3 to additionally lend the land revenue amount of KRW 3,000,000 to Defendant 3, but around that time, requested Defendant 3 to offer the refund claim of the lease deposit of this case, on the ground that Defendant 3 did not own real estate.

On October 1, 2008, the Defendant Company, and Defendant 3 transferred the right to KRW 80 million per day of the factory deposit to Defendant 3 (hereinafter address omitted). Section 2.1 of the same Article takes effect only when the Defendant Company did not pay its obligations to Defendant 3.3. On October 1, 2008, the Defendant Company and Defendant 3 drafted “Conditional performance undertaking” with the content that “as of October 1, 2008, Defendant 3 lent approximately KRW 90 million to the Defendant Company.”

C) On March 16, 2009, when the Defendant Company discontinued its business with the default of payment on February 2009, the Defendant Company and Defendant 3 entered into a contract for the assignment of claims to the effect that the Defendant Company would transfer the claim for the refund of the instant lease deposit to Defendant 3 for the repayment of obligations against Defendant 3 (hereinafter “instant contract for the assignment of claims”). On March 24, 2009, the Defendant Company delivered the instant factory by giving notification to Nonparty 1 on March 24, 2009 and notification of the termination of the instant lease.

D) At the time of the instant assignment contract, the Defendant Company owned the claim to return the lease deposit of this case with the sole property. However, the small property bears the Plaintiff’s loan obligation of KRW 200 million against the Plaintiff, tax liability of KRW 16,44,660 against the Republic of Korea, overdue rent of KRW 8,66,60 against Nonparty 1, goods payment obligation of KRW 990,00 against the Plaintiff’s Intervenor, and the attempted amount payment obligation of KRW 96,66,60 against Defendant 3.

[Reasons for Recognition] The facts without dispute, Gap evidence Nos. 4 through 7, 9 (including provisional number), Eul evidence Nos. 1 through 5, the non-party 3's testimony and the purport of the whole pleadings

2) The parties’ assertion

The Plaintiff asserted that the Defendant Company, which was in excess of the obligation, entered into the instant transfer contract with Defendant 3 on the claim to return the lease deposit of this case, which is its sole property, is a fraudulent act detrimental to the general creditor. Accordingly, Defendant 3 asserts that the instant transfer contract does not constitute a fraudulent act even if the repayment according to the principal claim would result in the decrease in the joint security of other creditors.

3) Determination

A) Even in a case where the debtor’s repayment according to the principal place of debt to a specific creditor in excess of his/her obligation results in a decrease in the joint security of other creditors, such repayment does not constitute a fraudulent act in principle. However, if the debtor in collusion with some creditors and performs performance with the intent to prejudice other creditors, it constitutes a fraudulent act (see Supreme Court Decision 2004Da10985, 1092, Mar. 25, 2005, etc.).

B) Although the fact that the Defendant Company entered into the instant contract for the purpose of repaying its obligations, such as loans to Defendant 3, it is acknowledged that: (a) Defendant 3 was aware of the fact that there was no property other than the obligation to return the instant lease deposit; (b) Defendant Company transferred its claim for the return of the instant lease deposit to Defendant 3, the sole property of which is its own property under excess of the obligation, such as the obligation to pay KRW 200 million to the Plaintiff; (c) at that time, Defendant Company was already in bankruptcy and discontinued its business; and (d) Defendant 3 was aware of such circumstances; (e) Defendant Company delivered the instant factory at the same time while giving notice of the termination of the lease agreement to Nonparty 1; and (e) Defendant Company was also liable for attempted payment equivalent to KRW 90 million when it borrowed additional KRW 90 million from Defendant 3; and (e) Defendant Company was aware that there was an intention to commit a fraudulent act in collusion with Defendant 3, including that of Defendant 2, even if it appears to have been aware that Defendant 3 had been performing its business.

B. Determination on Defendant 3’s bona fide defense

1) Defendant 3’s assertion

The assignment contract of this case was concluded ex post to receive the refund of the lease deposit of this case from Nonparty 1, and when Defendant 3 actually acquired the lease deposit of this case, it was October 1, 2008, which prepared a “Conditional Performance Declaration”.

At the time, Defendant Company requested additional lending of funds on the basis of good meat import cases. Defendant 3 loaned money on the premise that, in light of the Defendant Company’s credit, good faith, business plan, etc., the amount to be claimed was not much, and if the business is successfully conducted, the amount to be reimbursed can also be reimbursed. However, since the remaining obligation for attempted payment remains, it was merely offered as security the claim for the refund of the instant lease deposit, it was not sufficient to think that the Defendant Company will discontinue its business as of October 1, 2008, or would harm other creditors. Accordingly, Defendant 3 acquired the claim for the refund of the instant lease deposit in good faith.

2) Determination

As to the time of the transfer of the right to the lease deposit of this case, (1) the Defendant Company decided to transfer the right to the refund of the lease deposit of this case to Defendant 3, but (2) the condition attached to the validity of the transfer of the right is attached only when the Defendant Company fails to pay its obligations; and (3) it is difficult to deem that the execution of the contract of this case was concluded on October 1, 2008 by preparing the “Conditional Performance Declaration” explicitly because the condition is set out in the procedure to determine the obligation that the Defendant Company has not repaid. (2) The Defendant Company and Defendant 3 concluded the transfer of the right of this case separately on March 16, 2009, and the Defendant Company notified Nonparty 1 of the transfer of the transfer of the right based on the instant transfer of the right to the claim of this case, and (3) as seen later, Defendant 3 did not have any other grounds to recognize the transfer of the right to the lease deposit of this case to Nonparty 1 in the lawsuit against Nonparty 1, 2009.

(c) Methods of reinstatement;

1) Facts of recognition

A) Defendant 3 filed an application for provisional attachment with the claim amounting to KRW 80,000,000 as to the real estate owned by Nonparty 1 (Seoul Northern District Court 2009Kadan5312), and obtained the decision of acceptance on July 9, 2009. Around that time, Nonparty 1 filed a lawsuit for the claim of takeover (Seoul Northern District Court 2009Kadan332566) against Nonparty 1 on the ground of the contract for the assignment of the claim of this case. The appellate court (Seoul Northern District Court 2010Na4378) decided on April 15, 201 after deducting the overdue rent, etc. of Defendant Company, and the court rendered a decision of revocation of provisional attachment from April 25, 2009 to April 15, 2011, with the above judgment of KRW 61,524,494 as to the above amount to Defendant 3, which became final and conclusive on April 25, 2011.

B) Meanwhile, the Plaintiff filed the instant lawsuit on October 28, 2010 after receiving a decision of acceptance on May 27, 2010, with respect to the claim for the return of the loan due to the revocation of the fraudulent act against Defendant 3’s non-party 1 as the preserved right, upon receiving an application for debt collection and a provisional disposition prohibiting disposal (JJ District Court Decision 2010Kadan2583), and Defendant 3 paid KRW 72,620,641 out of the amount of the amount of damage deposited by Nonparty 1 on November 8, 2011 while the instant lawsuit is pending.

[Reasons for Recognition] Uncontentious Facts, Gap evidence 8, 10 evidence, Eul evidence 1, the purport of the whole pleadings

2) Determination

A) Since the above amount is the object of the execution of the judgment of the lawsuit claiming the above amount, it is identical with the deposit for lease. As long as Defendant 3 has already received the deposit by the contract for the assignment of claims of this case, it is impossible to return originals by notifying Nonparty 1 of the cancellation of the contract for the assignment of claims of this case. In this case, restitution is in accordance with the method of compensation for the equivalent value, and it is obvious that the Plaintiff’s loan claim exceeds the amount

B) Therefore, the assignment contract of this case should be cancelled as a fraudulent act, and Defendant 3 as a compensation for value is obligated to pay to the Plaintiff 72,620,641 won and damages for delay calculated at the rate of 5% per annum under the Civil Act from the day immediately following the day the judgment of this case became final to the day of full payment to the day of full payment.

3. Conclusion

Therefore, the plaintiff's claim against the defendants is reasonable, and all of them are accepted and decided as per Disposition.

[Attachment]

Judges Kim Hyun-un (Presiding Judge) Kim Jong-sik's strong treatment