The Bankruptcy Trustee of the Bankrupt Kimcheon Mutual Savings Bank (Attorney Park Jong-soo, Counsel for defendant-appellant)

Defendant 1 and seven others (Law Firm LLC, Attorneys Choi Jin-jin et al., Counsel for the defendant-appellant)

April 3, 2009

1. The Defendants jointly and severally pay to the Plaintiff 6,00,000,000 won with 20% interest per annum from April 3, 2009 to the date of full payment.

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

3. Paragraph 1 can be provisionally executed.

same as the order (as to Defendant 8, compensation for damages caused by tort and damages under Article 399(1) of the Commercial Act).

1. Facts of recognition;

The following facts shall be deemed to have been led by the Plaintiff and the Defendants 1, 4, 5, 6, and 7 pursuant to Article 150 of the Civil Procedure Act. The Plaintiff and the Defendants 2, 3, and 8 shall be deemed to have led to confession under Article 150 of the said Act. The following facts may be acknowledged by taking into account the following facts: (a) there is no dispute between the parties, or between the Plaintiff and the Defendants 2, 3, and 8; (b) evidence No. 1, 2, 6 through 9, 11, and 14 (including branch numbers); (c) evidence No. 4-220; (d) evidence No. 4-25 (part); and (e) evidence No. 4-15 of the said evidence, and it is insufficient to reverse the said evidence

A. The Kimcheon Mutual Savings Bank (which was established on March 6, 1970 and operated on March 6, 1970 for the main purpose of the credit installment savings business, the receipt of deposits and installment savings under the former Mutual Savings Bank Act (amended by Act No. 6429, Mar. 28, 2001; hereinafter referred to as the “the Bank in this case”), and was sentenced to a disposition of business suspension from the Financial Supervisory Service on March 20, 203, after being sentenced to a disposition of business suspension from the Daegu District Court on October 27, 2003, and the Plaintiff was appointed as the bankruptcy trustee of the Bank in this case on the same day.

B. Defendant 1 is the representative director of the bank of this case from September 11, 2002 to April 30, 2003; Defendant 2 is the auditor of the bank of this case from September 11, 2002 to April 30, 2003; Defendant 3 is the head of the business of the bank of this case from September 11, 2002 to April 30, 2003; Defendant 4 is the head of the credit bank of this case from October 1, 2002 to April 30, 203; Defendant 5 is the representative director of the bank of this case from November 12, 2002 to April 30, 203 to the representative director of the bank of this case; Defendant 2 is the largest shareholder of the bank of this case from September 20 to April 30, 200 to the representative director of the bank of this case; Defendant 30% of the loan ratio of this case from 203.

C. 1) Defendant 6 established ○○○○○○○○ (the trade name of Nonparty 1 corporation was changed on December 3, 2001; hereinafter “ Nonparty 1 corporation”) and established 35 branches nationwide to engage in monetary credit business. Defendant 6 acquired the entire shares of the instant bank with Defendant 8’s financial support, etc. around September 10, 2002 and took over KRW 3.795 billion, the entire shares of the instant bank as an employee of Nonparty 1 corporation, Defendant 1, a representative director, Defendant 2, a standing auditor, Defendant 3, the credit director, Defendant 4, and Defendant 5, respectively.

2) In collusion with Defendant 1, 2, and 3, on September 17, 2002, Defendant 6 acquired the same amount of financial gains by having the bank lend a total of KRW 2.69 billion over 22 times in total, and by having the bank acquire the same amount of financial gains and at the same time loan amount exceeding KRW 320 million,00,000,000,000,000,000,000,000,000,000 won (hereinafter referred to as the “general loan”) from the lender, who was not able to make repayment of the actual borrower’s loan at the intervals of Kimcheon-si, Kimcheon-si (hereinafter referred to as “detailed address omitted). The loan amount of KRW 320,000,000,000,000,000,000,000,000 won due to the loan amount of KRW 3.38,200,000,00.

3) In addition, around September 2002, Defendant 6 planned a loan product of “Spanish social loan” that provides credit loans of 180 million won to the 500 million employees of this case’s entertainment business establishment at the end of 2002. On October 14, 2002, Defendant 7, who had been working for the loan-raising business, was assigned to Defendant 4 and 5 as the representative director of the non-party 2 corporation, who had been working for the loan-raising business, at the same time as the above 600 million employees of this case’s loan-raising business, and had the above 600 million employees of this case’s loan-raising business, including the above 300 million employees of this case’s loan-raising business, and had Defendant 1, 2, and 3, etc. receive 800 million won loan from the bank of this case’s loan-raising business from 600 million won to 700 million won per head of this case’s loan-raising business.

D. (1) Defendant 1, as the representative director of the instant bank, has occupational duties to manage and supervise the credit business of the instant bank in an appropriate manner in accordance with all the regulations, in collusion with Defendant 6, the representative director of Nonparty 1, Defendant 2, and Defendant 3, the president of the instant bank, who is the president of the instant bank, and the director of the credit division, in collusion with Defendant 3, who is the director of the instant bank. Defendant 1 obtained financial benefits equivalent to 2.69 billion won through an improper loan over 22 occasions, as described in subparagraph (c) of the said paragraph. Defendant 6 borrowed the instant bank in excess of the loan limit to the same person at the same time.

2) In addition, according to the orders of Defendant 6, who is the representative director of the non-party 1 corporation, Defendant 1 made a so-called "Span social loan" loan product that can be loaned at KRW 200 million on credit with Defendant 2 and 3, together with Defendant 3. Defendant 4 established the branch office of the bank of this case at Sungnam-si, Sungnam-si, and managed the social loan affairs. Defendant 7 took charge of social affairs as the representative director of the non-party 2 corporation. Nonparty 7 made the loan brokerage company non-party 9 to recruit the name lender. The loan broker's fee of KRW 100 through 200 million was paid to the name lender, and the loan lender's loan amount of KRW 200 million was collected from the bank of this case, and the loan lender's loan amount of KRW 500 million was collected from the bank of this case in succession to the above loan amount of KRW 3600 million,500,000,0000,000.

3) In addition, according to the Securities Management Regulations enacted on December 29, 200, a mutual savings bank has established and operated an appropriate level of risk and transaction by department or business division to efficiently manage risks. According to Article 8 of the Securities Management Regulations enacted on December 29, 200, when the assessed value of securities falls below 80/100 of the purchase price, it shall be immediately sold and prevent additional losses. However, Defendant 1 may have five listed stocks, such as Samsung Electronic Co., Ltd., Ltd., through the consignment account opened in Hyundai Securities Co., Ltd., Ltd. from September 11, 2002 to February 4, 2003, 2000 KRW 1,157,510,596, and 200,000,000,000,000,000,000,000,000,000,000,000,00,000.

E. 1) Defendant 2, as the standing auditors of the instant bank, should closely audit whether the instant bank violated laws and regulations at the time of loan handling, and prevented Defendant 1, etc. from violating the relevant laws and regulations, he actively participated in the tort such as Defendant 1, etc., such as signing and approving the loan documents, and thereby causing damage to the instant bank, as described in paragraphs (d) and (2).

2) In addition, Defendant 2 neglected to perform accounting and audit as an auditor of the instant bank, thereby preventing Defendant 1’s unfair management of securities, thereby causing damage to the instant bank as described in paragraph (d)(3) of the same Article.

F. Defendant 3, while holding office as the head of the business of the instant bank and dealing with the loan, closely examined the credit status of the borrower, whether the borrower is eligible to handle the loan, and whether the loan violates relevant Acts and subordinate statutes, and then, even if not dealing with such violation, he actively participated in the act of breach of trust by Defendant 1, etc., and thereby resulting in damage to the instant bank, such as those described in paragraphs (d) and (2).

G. Defendant 4, while dispatching the head of the business division of the instant bank to Seoul area mainly, obtained financial benefits equivalent to the above amount from Defendant 6 by falsely lending KRW 51.63 billion over 302 occasions, as described in Section 4, by falsely preparing the revenue and operating status of the loan application or by recognizing the contents stated in the loan application as they are, in examining the loan applicants recruited by Nonparty 2, while being on dispatch to Seoul area, without confirming the credit status of the borrower and the purpose of the loan use, etc., and thereby treating the same as mentioned in Section 4-2, and thereby causing damage equivalent to KRW 45.5576 billion to the outstanding loan balance due to the instant bank.

H. From November 7, 2002, Defendant 5 worked for the branch office of the Bank of this case from November 7, 2002, and participated in the illegal loan of KRW 32.51 billion in total over 192 occasions under the orders of Defendant 4, as shown in the attached Table No. 132 to 323, such as the attached Table No. 132 to 1923, thereby obtaining pecuniary benefits equivalent to the above amount from Defendant 6. The bank of this case suffered losses equivalent to KRW 29.26 billion in the outstanding loan balance due to the illegal loan.

I. Defendant 7, upon being entrusted with the loan recruitment business from the bank of this case, paid the prescribed fees from October 4, 2002 to February 6, 2003, and borrowed 301 persons, including Nonparty 10, etc. from the bank of this case to borrowed 51.46 billion won from the bank of this case to the bank of this case as if the above holders actually used the funds, and was falsely prepared a false loan application and borrowed 51.46 billion won from the bank of this case to the bank of this case, and then remitted 4.5.5 billion won to the bank of this case to the bank of this case, and thereby, Defendant 7 actively participated in the illegal acts such as Defendant 1, etc., thereby causing damage to the bank of this case as above.

(j) While Defendant 8 was unable to receive approximately KRW 15 billion loan from Defendant 6 to Defendant 6, Defendant 6 proposed that "it would be able to take over money from mutual savings banks by acquiring savings banks and deducting them from their deposits." From May 2002 to September 202, Defendant 8 provided funds necessary to take over the mutual savings bank to Defendant 6, and Defendant 6 was urged to take over the loan amount of KRW 7 billion from Defendant 60 billion to Defendant 60 billion, Defendant 60 million to take over the loan amount of KRW 8 billion, Defendant 60 million to take over the loan amount of KRW 60 billion, Defendant 600,000,000,000,0000,0000,000 won and KRW 60,000,000,000,000,000,000,000 won and KRW 606,00,000,00,000.

2. Determination as to the Plaintiff’s claim against Defendant 1, 2, 3, 4, 5, 6, and 7

In light of the above facts, Defendant 1, 2, 3, 4, and 5, as an executive or employee of the Bank of this case, caused damages to the Bank of this case by violating the statutes or the articles of incorporation or neglecting the duty of care of good managers. Defendant 6 and 7, in collusion with the above Defendants, inflicted damages on the Bank of this case. As such, Defendant 1 and 2 jointly and severally agreed with the said Defendants for compensation for damages arising from nonperformance or tort, KRW 46.35 billion (general financing damages amount + KRW 32.576 billion + damages amount of 4.5 billion in Spanish social loan + KRW 45.6 billion + damages amount of 4.5 billion in Spanish social loan + damages amount of KRW 4.6 billion to the Defendants, the above Defendants are jointly and severally liable to compensate for damages with the aforementioned amount of KRW 4.5 billion to the Plaintiff by the date of the above Defendants.

3. Determination on the Plaintiff’s claim against Defendant 8

A. Determination on the cause of the claim

1) The plaintiff's assertion

The Plaintiff asserts that Defendant 8 is liable to compensate the Plaintiff for damages caused by illegal acts such as Defendant 1, 2, and Defendant 6, or that Defendant 1, a representative director of the above bank, through Defendant 6, who was the controlling shareholder of the bank of this case, who caused damages to the bank of this case, or by using his influence on the bank of this case, instructed Defendant 1, a representative director of the above bank through Defendant 6, and thus, Defendant 8 is liable to compensate the Plaintiff for damages under Article 399(1) of the Commercial Act.

2) Determination

First of all, we examine the claim for damages against Defendant 39(1) of the Commercial Act, and Defendant 8 provided funds necessary to take over the bank of this case. The majority shareholder of the bank of this case holding 40.3% shares of 40.3% shares of the company of this case, and instruct Defendant 1, etc., the representative director of the bank of this case, through Defendant 6, to make an unfair loan of KRW 51.63 billion in total as stated in the above facts-finding (C. 3) and to use the above unfair loan in the accounts managed by Defendant 6 for repayment of debts to Defendant 8. The above unfair loan of this case was jointly and severally liable to compensate the defendants for damages with the above amount of KRW 45.5 billion in total due to the above improper loan of this case by 9.5 billion in total, and the remaining amount of damages to Defendant 80 billion in total due to the loan of this case is jointly and severally liable to the defendants 6.5 billion won in accordance with the law of this case.

B. Determination as to Defendant 8’s assertion

1) Defendant 8 asserts that Defendant 8’s assertion that he is liable to compensate the Plaintiff for damages under Article 399(1) of the Commercial Act as an executive instruction under Article 401-2 of the Commercial Act is against the principle of timely submission, and thus, it should be dismissed.

After the plaintiff filed a lawsuit in this case on July 7, 2008, the plaintiff claimed damages for tort against the defendant 8, and the above defendant claimed that the damages for tort caused by tort against the above defendant had expired by prescription through a preparatory document dated December 11, 2008. Accordingly, the plaintiff was liable for damages under Articles 401-2 and 399(1) of the Commercial Act through a preparatory document dated January 12, 2009, and the ten-year prescription has been applied, and the ten-year prescription has not lapsed, and it is clear that the plaintiff filed a lawsuit in this case as of January 16, 2009 after the pleadings were closed at the date of the second pleading of this case, and the plaintiff received an order from the court as of February 11, 2009 to make an alternative claim as to whether the above liability for damages under the Commercial Act has been claimed from the above defendant 8 as of the date of pleading of this case as of March 31, 2009, and it is evident that the plaintiff submitted the above application for damages as of this case as of this case as of title 39.

However, since the selective addition of the plaintiff's claim for damages under the above Commercial Code is not a new form of attack or defense, it is not a new form of attack, and it is not allowed to modify the claim if Article 262 of the Civil Procedure Act concerning the rejection of the actual time limit attack or defense is applied to the alteration of the claim, and the procedure is substantially delayed. The addition of the plaintiff's claim for damages under the above Commercial Code is only different resolution methods in disputes concerning the same living facts or the same economic interests as that of the existing tort claim, and it is not obvious to delay the litigation procedure because it can use the previous litigation data for the deliberation of the new claim, and in light of the progress of the lawsuit in this case, it cannot be seen as a purpose to delay the selective addition of the plaintiff's claim cause as mentioned above. Thus, the above assertion by the defendant 8 cannot be accepted.

2) In addition, Defendant 8 argues that the degree of participation in the above unfair loans by Defendant 8 is relatively small, and that the above Defendant also suffered a lot of damage from Defendant 6, in view of the equitable burden of damages under the good faith principle, Defendant 8’s liability for damages against Defendant 8 should be limited to KRW 8.73 billion remitted to the account of Defendant 8 and his family members, etc. among the amount of social loans of KRW 51.63 billion. However, Defendant 88,1 million ( Daegu High Court Decision 2006Na9324, 9331 (combined)) is limited to the above defendant’s liability and the amount of damages against the above defendant in relation to the above unfair loans is limited to KRW 8.88 billion (the above defendant’s liability is limited to KRW 8.8 billion,000,000,000,000 won, which is more than the above claim amount of KRW 7.85 billion,000,000,000.

3) Finally, Defendant 8 asserts that Defendant 8’s compensation amount should be reduced to not less than 30% by taking account of the negligence of the bank in the above circumstances, since Defendant 8 had already aggravated management status of the bank, as well as the negligence in business administration, which did not establish a risk management system that could prevent illegal loans, and the gross negligence in appointing and supervising its executives and employees, the bank of this case must be reduced to not less than 30%. In addition, Defendant 8’s assertion that a person who intentionally committed an act by taking advantage of the victim’s care would have reduced his own responsibility on the ground of the victim’s negligence cannot be allowed unless there are any special circumstances (see Supreme Court Decision 2007Da36445, Jun. 12, 2008). Defendant 8, along with Defendant 6, obtained the bank of this case with Defendant 6 to deduct the deposit of the bank of this case through illegal loans, and acquired the bank of this case, which was operated by Defendant 6, and did not have any property damage as seen earlier.

4. Conclusion

Therefore, the plaintiff's claim against the defendants of this case is justified, and it is so decided as per Disposition by the assent of all.

【Crime Disturbing Table】

Judges Choi Young-young (Presiding Judge) Kim Cheong-American