2018Da213903 Objection

Land Development Co., Ltd.

Ship Management Co., Ltd.

Incheon District Court Decision 2017Na57786 Decided January 18, 2018

June 15, 2018

The judgment below is reversed, and the case is remanded to the Incheon District Court.

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. Article 250(2)1 of the Debtor Rehabilitation and Bankruptcy Act provides that the rehabilitation plan does not affect the rights of the guarantor of the debtor for whom the rehabilitation procedure has commenced (hereinafter referred to as "viable debtor"), and other persons who bear obligations together with the debtor. However, in cases where the rehabilitation plan of the debtor debtor who is the primary debtor is determined to conduct a conversion of investment in lieu of the payment of all or part of the rehabilitation claims or rehabilitation security rights, the guarantor's surety obligation of the debtor shall be deemed to have been repaid the amount of debt equivalent to the appraised amount of the rehabilitation claims, etc. within the limit of the amount of the rehabilitation claims, etc. that the rehabilitation creditors, etc. have acquired as of the date of issuance of new shares through a conversion of investment and the market price of the newly issued shares as of the date of issuance of the new shares through a conversion of investment shall be assessed as at the time of the effective date of the conversion of investment (see, e.g., Supreme Court Decisions 2002Da12703, Jan. 10, 2003; 2014Da254

2. The reasoning of the lower judgment and the evidence duly admitted reveal the following.

(A) On August 10, 2011, the first Twitter Co., Ltd. (hereinafter referred to as the “One Twitter Day”) issued a promissory note (hereinafter referred to as the “instant promissory note”) with a face value of KRW 111,100,000, and the due date on December 5, 2011.

(B) On August 11, 201, the Plaintiff exempted the Defendant from drawing up a certificate of non-payment, and transferred the Promissory Notes in this case by endorsement, but the Promissory Notes in this case was rejected.

(C) On the other hand, on August 29, 201, the first day of the first day was decided on October 19, 201 after filing an application for commencing rehabilitation procedures with the Seoul Central District Court 201 Ma116, and the Defendant reported the instant promissory note claim against the first day as a rehabilitation claim (hereinafter “instant rehabilitation claim”), and the principal amount was KRW 111,100,000 for the instant rehabilitation procedure.

(D) Since then, 70% of the rehabilitation claims in this case were converted into investment in lieu of repayment, and the remaining 30% was submitted with a rehabilitation plan to repay in cash over ten years, and was authorized on April 13, 2012. Accordingly, on April 14, 2012, the Defendant acquired new shares 3,888 shares (hereinafter “new shares”) issued with the issuance price per share of KRW 20,000 on April 14, 2012. (E) Meanwhile, on January 5, 2012, the Defendant filed a lawsuit claiming against the Plaintiff for reimbursement of the redemption bond following the refusal of payment of promissory notes (hereinafter “the redemption bond in this case”) by the Incheon District Court 2012 group 1299, against the Plaintiff, and the said lawsuit was concluded on April 30, 2012 and the judgment was rendered to accept the claim on April 14, 2015.

3. Examining these facts in light of the legal principles as seen earlier, even if a debt-equity swap was conducted in place of repayment of KRW 77,760,00 among the instant rehabilitation claims ( = issue price of KRW 20,000 x 3,888), insofar as there is no proof as to the fact that the appraised value of the instant new shares reaches the amount of rehabilitation claims that would substitute for repayment due to the debt-equity swap as of April 14, 2012 when the issuance of new shares became effective, it cannot be readily concluded that the amount of KRW 77,760,00 among the instant rehabilitation claims was repaid.

Nevertheless, the lower court determined that the market price of the instant new shares was KRW 77,760,000,000, solely on the ground that the issue price per share of the instant new shares was issued in 20,000 and substituted for repayment of KRW 77,760,00 among the rehabilitation claims of this case, and accordingly, 77,760,000 out of the payment obligations of the Promissory Notes jointly and jointly borne by the Plaintiff was substantially satisfied by the Defendant. In so doing, the lower court erred by misapprehending the legal doctrine on the scope of the obligations extinguished through a conversion into equity swap, thereby adversely affecting the conclusion of the judgment, by failing to exhaust all necessary deliberations. The allegation contained in the grounds of appeal assigning this error is with merit.

4. Therefore, without further proceeding to decide on the remaining grounds of appeal, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

The presiding judge shall keep the record of the Justice

Justices Kim In-young

Justices Cho Jae-chul