Whether Article 37-3 of the Korea Technology Credit Guarantee Fund Act applies to a corporate small and medium enterprise, which is not likely to obtain immunity pursuant to the procedures prescribed by the Debtor Rehabilitation and Bankruptcy Act (negative)

Notwithstanding Article 567 of the Debtor Rehabilitation and Bankruptcy Act, Article 37-3 of the Korea Technology Credit Guarantee Fund Act, where a creditor is the Korea Technology Credit Guarantee Fund, the joint and several liability obligations shall also be mitigated or exempted at the same rate if the principal obligation is mitigated or exempted by a small or medium enterprise at the time when immunity is granted after a declaration of bankruptcy. The aforementioned “time when immunity is granted after a declaration of bankruptcy” is premised on the premise that a small or medium enterprise is granted immunity in accordance with the procedure prescribed by the Debtor Rehabilitation

However, unlike the individual bankruptcy procedure, the Debtor Rehabilitation Act does not stipulate the exemption procedure in the corporate bankruptcy procedure. Therefore, the above provision does not apply to corporate small and medium enterprises which are not likely to obtain immunity pursuant to the procedure under the Debtor Rehabilitation Act.

The Korea Technology Credit Guarantee Fund Article 37-3

Korea Technology Finance Corporation (Law Firm Doel, Attorney Lee In-hee, Counsel for defendant-appellant)

Defendant (Attorney Lee Jae-soo, Counsel for defendant-appellee)

Seoul Southern District Court Decision 2015Na56647 decided February 5, 2016

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

Notwithstanding Article 567 of the Debtor Rehabilitation and Bankruptcy Act, where a creditor of the Korea Technology Credit Guarantee Fund is the Korea Technology Credit Guarantee Fund, joint and several surety obligations shall be reduced or exempted at the same rate if the principal obligation is reduced or exempted at the time when a small or medium enterprise is granted immunity after a declaration of bankruptcy. However, it is reasonable to interpret that “the time when immunity is granted after a declaration of bankruptcy” is premised on the premise that a small or medium enterprise is granted immunity under the procedure prescribed by the Debtor Rehabilitation Act.

However, unlike the individual bankruptcy procedure, the Debtor Rehabilitation Act does not stipulate the exemption procedure in the corporate bankruptcy procedure. Therefore, the bankruptcy procedure of small and medium enterprises, which are corporations and are not likely to obtain immunity pursuant to the procedure under the Debtor Rehabilitation Act, does not apply to the instant

In the same purport, the lower court was justifiable to have determined that the Defendant’s joint and several liability could not be reduced or exempted by applying the instant provision, since there was no exemption procedure even if the lower court was declared bankrupt against the central electronic precision equipment company, which is the primary debtor. In so doing, it did not err

Therefore, the appeal is 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 Lee Sang-hoon (Presiding Justice)