Plaintiff (Law Firm Na, Attorneys Kim Dong-ho et al., Counsel for plaintiff-appellant)

Seoul High Court Decision 201Na1448 delivered on August 1, 201

October 7, 2008

1. The defendant shall pay to the plaintiff 747,839,656 won and 213,839,656 won among them with 5% interest per annum from December 27, 2007 to 200,000 won per annum from January 5, 2008 to October 28, 2008; 20% interest per annum from the next day to the day of full payment; 50,000 won from September 11, 2006 to 80,000 won per annum from September 26, 2006 to the day of full payment; and 30% interest per annum from September 29, 2006 to the day of full payment; and 50,000 won from the next day to the day of full payment; and 30% interest per annum from September 26, 200 to the day of full payment.

2. The plaintiff's remaining claims are dismissed.

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

4. Paragraph 1 can be provisionally executed.

With respect to the Plaintiff KRW 747,839,656 and KRW 213,839,656 among them, the Defendant shall pay to the Plaintiff 5% per annum from December 27, 2007 to December 28, 2007, KRW 200,000,000 per annum from January 5, 2008 to the service date of a duplicate of the complaint of this case, and 20% per annum from the next day to the day of complete payment, with respect to KRW 50,00,00 per annum from September 11, 2006 to the day of complete payment, and with respect to KRW 80,00,00 per annum from September 18, 206 to KRW 36 per annum from September 18, 206 to the day of full payment.

1. Basic facts

The following facts are not disputed between the parties, or may be acknowledged by taking into account each statement of Gap evidence of 1 through 6, Eul evidence of 1 through 1, 2, 4, 12, 13, and 14 (including each number), and the testimony of non-party 2 and 1 of the whole purport of the pleadings:

A. The claim relationship between the Plaintiff and the New T&A Co., Ltd. (hereinafter “New T&A”)

(1) On October 4, 2006, the Plaintiff: (a) registered the establishment of a new ownership of the Plaintiff’s Cheonggu-dong, Gangnam-gu, Seoul (hereinafter omitted) with a view to securing the obligation of loans of KRW 200,000,000 from the Industrial Bank of Korea; (b) on the application of the Industrial Bank of Korea on December 26, 2007, the Plaintiff subrogated the Industrial Bank of Korea to the Industrial Bank of Korea for the following reasons: (c) on the application of the Industrial Bank of Korea on December 26, 2007, the Plaintiff made a voluntary auction on the said real estate; and (d) on December 26, 2007, the Plaintiff subrogated the obligor for the establishment of a new ownership of the loans of KRW 213,839,656 (= principal amount of KRW 200,000 + interest + cost of KRW 9,83,396,396,000 + cost of KRW 3956,260).

(2) The Plaintiff jointly and severally guaranteed each credit guarantee agreement that the new L&A entered into with the Korea Credit Guarantee Fund in order to obtain a loan from the National Bank and the Industrial Bank of Korea as listed in the following table. Due to the default of the new L&A, the Korea Credit Guarantee Fund paid to each of the above banks the indemnity amount of KRW 422,987,550 on behalf of the said banks within the scope of the guaranteed amount. The Plaintiff repaid the Credit Guarantee Fund of KRW 200,00,000 as a joint and several surety for each of the credit guarantee agreements of the above Korea on December 27, 2007.

본문내 포함된 표 보증일 보증금액(원) 대출은행 구상권발생일 구상원금(원) 2002. 11. 4. 150,450,000 국민은행 2007. 12. 17. 114,960,636 2002. 12. 30. 49,500,000 국민은행 2007. 12. 17. 44,572,920 2003. 10. 27. 63,000,000 국민은행 2007. 12. 17. 39,290,332 2005. 5. 27. 200,000,000 중소기업은행 2007. 12. 28. 182,533,443 2005. 10. 5. 47,880,000 국민은행 2007. 12. 17. 41,640,219 합계 510,830,000 ？ ？ 422,987,550

(3) In order to obtain a loan of KRW 204,00,000 from the Korea Technology Credit Guarantee Fund, the Plaintiff jointly and severally guaranteed the liability for indemnity against the Korea Technology Credit Guarantee Fund of the New Technology Credit Guarantee Fund of the New Technology Credit Guarantee Fund. On January 4, 2008, the Plaintiff paid the advance indemnity of KRW 204,00,000 on behalf of the New Technology Credit Guarantee Fund due to the default of the New Technology Credit Guarantee Fund of the New Technology Credit Guarantee Fund.

(4) On September 11, 2006, the Plaintiff lent 3% interest rate of 50,000,000 to Hyan L&A as of October 11, 2006, and determined 3% interest rate of 80,000,000 on September 18, 2006 and lent 3% interest rate of 3% interest rate and October 18, 2006.

B. The relationship between the new L&A and the Defendant (hereinafter “Defendant Company”) regarding the division and merger between the name of the new T&A and the Defendant (the name of the new T&A Co., Ltd. was changed from the K&C Co., Ltd. on April 5, 2007 to the new T&C Co

(1) Around November 2006, Nonparty 2, the representative director of the New T&A, requested Nonparty 1, the management consultant, to establish a new company that only the government-funded construction works, by removing only the electrical construction portion of the New T&A, and paid KRW 15,00,000 at the service cost.

(2) In accordance with the above service agreement, Nonparty 1 tried to establish a company called New Electricity Co., Ltd. by dividing the portion of electrical construction business and telecommunications construction business into a corporation (tentative name). After that, Nonparty 1, a dormant company, which was the Dormant Company, holding shares in the name of Nonparty 3 and Nonparty 4, decided to merge the electrical construction portion of the Dolsung’s New Technology Co., Ltd., and written the written agreement of November 28, 2006 (hereinafter “instant written agreement”).

② Defendant Company shall comprehensively succeed to the rights and obligations of the license, equipment and personnel, contractual rights, defect repair, etc. of the part of the electrical construction business, which is part of its business.

(1) On the basis of the current list of property as of November 28, 2006, new L&A shall transfer all of the rights and duties concerning business divided on the date of merger after division prescribed in Article 6 to the defendant company, and the defendant company shall succeed to such transfer.

(2) The defendant company shall succeed to all guaranteed liabilities and all loans for the number of units of equity held by the new L&Wn's Electric Construction Financial Cooperative.

The new L&A and the defendant company do not alter the total number of shares issued and capital by merger through division.

The merger date between the defendant company and the new L&A shall be March 9, 2007: Provided, That when the procedures for the division and merger have not been completed until the above date, the above period may be extended through an agreement between the defendant company and the representative of the new L&A.

(3) On November 28, 2006, the non-party 1, who was rendered the service of the divided-merger procedure, did not have a joint and several liability on the debt other than the investment property of Article 530-9 (1) of the Commercial Act, and the creditor who raised an objection to the company was not subject to the following separate procedures: (a) the non-party 1 prepared a minutes of the shareholders' meeting to the effect that the non-party 1 was approved by the plaintiff and the non-party 2, who held shares of the non-party 1 in his or her or the non-party 2, with delegation from the plaintiff and the non-party 2, who approved the written agreement of this case; and (b) thereafter, the non-party 1 did not separately complete the procedure of the division-merger with the non-party 2, the non-party 2, who became aware of the following facts: (c) on December 1, 2006, after undergoing the resolution under Article 530-9 (2) of the Commercial Act; and (d) the non-party 16).

(4) On March 12, 2007, the Defendant Company and New L&C completed a corporate division and merger registration with the Defendant Company to divide and divide part of the L&C’s electrical construction business into the Defendant Company. The New L&C continued to operate the electrical construction business on March 27, 2007 after adding the electrical construction business to its business purpose on the registry with a new electrical construction license.

(5) However, on February 207, Nonparty 2, who was the representative director of L&A, proposed to acquire the Defendant Company at KRW 700 million to Nonparty 1, and thereafter, on March 29, 2007, Nonparty 1 entered into a contract under which the Defendant Company paid KRW 700 million to L&A and received the right of registration for electrical construction business (hereinafter “instant contract for transfer of the right of registration”).

The purpose is to divide the electrical construction business, information and communications construction business, and fire fighting construction business from the new L&Wn's business and transfer it to the defendant company.

(1) The purchase price for electrical construction business shall be KRW 700 million.

(2) The down payment shall be paid at the same time as the contract is made, and the balance shall be the electrical construction business, information and communications business, and fire-fighting business divided and approved, and the investments of each mutual-aid association shall be the settlement key at

(2) Before transfer and acquisition, new L&A takes responsibility for its liabilities and the surety obligations of the Information and Communications Mutual-Aid Association, and if the new L&A succeeds jointly and severally to the Defendant Company, this Agreement shall become null and void, and at the same time pay compensation of 25% per annum of the transfer proceeds.

(6) At the time of entering into the instant registration right transfer agreement, the new L&A and the non-party 2 and the non-party 5, who are the shareholders of the company, are liable to Non-party 1 for all obligations and contingent obligations arising before and after the merger by split. If a joint and several liability arises for the defendant company, the merger by split-merger becomes null and void, and the new L&A shall pay the defendant company the amount of the transfer price and the amount of compensation at the rate of 25% per annum to the defendant company. However, the plaintiff refused to prepare each of the above contents as a result of the dispute over the user of the transfer price received from the non-party 1.

2. The parties' assertion and judgment

A. The parties' assertion

(1) The plaintiff's assertion

The Defendant Company is jointly and severally liable to pay the Plaintiff’s debt to the Plaintiff pursuant to Article 530-9(1) of the Commercial Act, as a company that divided and merged the part of the electrical construction business of Danified.

(2) The defendant company's assertion

(A) Since a contract for the transfer and acquisition of electrical construction business between the defendant company and the new L&A is not a division and merger of a company under Article 530-2 of the Commercial Act, but a transfer of business under Article 41 of the Commercial Act, the defendant company is not jointly and severally liable for the debt of the new L&A under Article 530-9 of the Commercial Act.

(B) Even if the contract for the transfer and acquisition of electrical construction business between the defendant company and the new L&A is a merger as stipulated in Article 530-2 of the Commercial Act, the defendant company passed a resolution and publicly announced so as not to support the debt of the new L&A at the time of the merger after division so that the defendant company is not jointly liable for the debt of the new L&A pursuant to Article 530-9(3) of the Commercial Act

(C) Since the Plaintiff’s claim for reimbursement against the Plaintiff is a claim arising after the merger between the Defendant Company and the New T&A, the Defendant Company is not jointly and severally liable for payment.

(D) Even if the Plaintiff and the Defendant are jointly and severally liable for the Defendant’s debt to the Defendant Company, the Plaintiff and the Defendant are jointly and severally liable for the principal debt to the Bank of S&A, the Credit Guarantee Fund, and the Korea Technology Credit Guarantee Fund. Therefore, the Defendant Company is solely liable for the portion exceeding the Plaintiff’s share.

(E) When it is difficult for the Plaintiff to make a tender for government-funded construction due to the lack of business performance while operating the new L&A, the Plaintiff removed the electrical construction portion of the new L&A from the Defendant Company, a dormant company, and sold it for KRW 700 million to Nonparty 1, as well as selling it for KRW 700 million to Nonparty 1, while exercising the right to indemnity against the Defendant Company, even though it was actually used by the Plaintiff for the operation of the new L&A, it violates the good faith principle.

B. Determination

(1) Legal nature and validity of the instant merger agreement and the instant registration right transfer agreement

(A) According to the above evidence, new L&C requested the non-party 1 to remove only the part of electrical construction and to establish a new company specialized in government-funded construction, and entered into the merger agreement between new L&C and the defendant. It is the actual owner of the defendant company at the time of the merger agreement of this case and the minutes of the general meeting of shareholders, and the registration of division and merger was made by the non-party 1 as delegated by the non-party 2, and the actual general meeting of shareholders was not held at the end of the merger agreement of this case. Even if the defendant company acquired the part of the electrical construction business of new L&C, it can be acknowledged that new L&C would actually continue to conduct electrical construction business while operating the defendant company. However, it is problematic that if the company transfers all or part of its business to a third party, it would go through any legal method of the parties' agreement, and the merger agreement between the defendant company and the non-party 1 and the non-party 2 of this case would be effective by the new company's merger and merger agreement of this case.

(B) As to the merger after division of a company, the Commercial Act provides for legal matters to be entered in the written agreement of the merger after division (Article 530-6 of the Commercial Act), approval of the general meeting of shareholders on the written agreement of the merger after division (Article 530-3 (1) of the Commercial Act), and provides that if creditors raise an objection to the merger within two weeks from the date a resolution of the general meeting of shareholders is passed to approve the merger after division, the creditors known to submit them shall be notified within a period of not less than one month and shall be notified separately to creditors known (Article 530-9 (4) of the Commercial Act and Article 527-5 (1) of the Commercial Act). As seen above, the written agreement of this case was made on November 28, 2006 and entered in the legal matters of the written agreement of the merger after division and merger under the Commercial Act with the company and the shareholders controlling the defendant company, the company's assertion that the merger after division registration agreement of this case was invalid after the merger after the agreement of this case was made.

(C) However, even if in the above registration right transfer agreement, the new L&C, Nonparty 2, 5, and Defendant Company agreed to assume the responsibility for all obligations and contingent obligations arising before and after the merger through division, the agreement that the newly incorporated company or the existing company would not entirely succeed to the obligations of the company before the merger through division or the merger through division is in violation of Article 530-9 of the Commercial Act, and thus has no effect in relation to the creditors regardless of whether the newly incorporated company or the existing company violated the procedure for protecting creditors under Article 527-5 of the Commercial Act (Supreme Court Decision 2006Da26380 Decided October 12, 206).

(2) Whether the Defendant Company is jointly and severally liable for the Defendant’s debt owed to the Plaintiff of the New T&A.

(A) In the case of a corporate division, in principle, the Commercial Act provides that the divided company and the newly incorporated company shall be held jointly and severally liable for the obligations of the company prior to the division, and exceptionally, upon a special resolution of the general meeting of shareholders that approves the plan for division, the newly incorporated company shall bear only the obligations with respect to the assets invested in the company prior to the division among the obligations of the company prior to the division and exclude a certain portion of the joint and several liability. In this case, the relationship with which the interests of creditors accrue, which requires the creditors known to the company prior to the division to make a peremptory notice as to whether they have raised an objection individually, and shall provide repayment or reasonable security to the creditors who have raised an objection or trust considerable property to the trust company for the purpose of protecting creditors, exceptionally, in order to avoid the joint and several liability of the newly incorporated company, the exclusion of joint and several liability to the creditors cannot be effective if the procedures for protecting creditors are omitted, and in principle, the newly incorporated company and the divided company shall be jointly and severally liable (see Supreme Court Decision 2003Da25973, Aug. 30, 20,

(B) On November 28, 2006, the new L&C at the time of the instant merger after division, based on the inventory on November 28, 2006, succeeded to all the rights and obligations regarding the business divided on the date of division and merger, and the defendant company succeeds to all the guaranteed obligations and all the loans regarding the number of equity shares of the new L&C's electrical construction mutual aid association. Meanwhile, according to the above merger after division agreement, the non-party 1 publicly notified that the defendant is not jointly and severally liable for obligations other than the invested assets under Article 530-9 (1) of the Commercial Act, but on the other hand, the plaintiff jointly and severally and severally guaranteed the obligations of the new L&C to the Industrial Bank of Korea or the Korea Credit Guarantee Fund, and the new L&C lent lent money to the new L&A, and thus the plaintiff or the Industrial Bank of Korea is jointly and severally liable for the merger after division and merger between the plaintiff 2 and the defendant company and the new 300-5 (1) of the Commercial Act.

(C) As to the Defendant’s assertion that the Defendant Company cannot be held jointly and severally liable as a debt incurred after the merger after the division and merger of this case, the Defendant’s assertion that the Defendant Company was not jointly and severally liable as to the Defendant’s claim that the Plaintiff had been incurred from the division and merger of this case, the Plaintiff’s loan obligation to the Industrial Bank of the New T&A on December 26, 2007, the Plaintiff’s loan obligation to the Credit Guarantee Fund of the New T&A on December 27, 2007, the amount of indemnity obligation to the New T&A on January 4, 2008, and the amount of indemnity obligation to the Korea Technology Credit Guarantee Fund of the New T&A on January 4, 2008, on the other hand, each of the above payments was made by the joint and several surety obligation already made before the division and merger of this case, and thus, the Defendant Company’s aforementioned assertion is without merit.

(D) Even if the Plaintiff and the Defendant are jointly and severally liable for the Defendant’s debt prior to the merger between the Plaintiff and the Defendant Company, the Plaintiff and the Defendant Company are jointly and severally liable for the same debt as to the principal debt against the Bank of S&A, the Korea Credit Guarantee Fund, and the Korea Technology Credit Guarantee Fund. As to the Defendant’s assertion that the Defendant Company is jointly and severally liable for the portion exceeding the Plaintiff’s share, the Plaintiff is the Industrial Bank of Korea of S&A, the Korea Credit Guarantee Fund, the surety’s surety’s obligation against the Korea Technology Credit Guarantee Fund, or the joint and several surety’s obligation against the Defendant Company, or the Defendant Company is jointly and severally liable for the full amount of the Defendant’s debt as the principal obligor, as in the case of S&A

(3) Judgment on Defendant Company’s assertion of violation of the good faith principle

In light of the above facts, it is difficult for the Plaintiff to prepare a new L&C loan agreement with the Defendant Company to use the loan money in its name and sell it for KRW 700 million to Nonparty 1, who is a Dormant Company, and the Plaintiff’s claim for reimbursement against the Defendant Company is against the principle of good faith. The Plaintiff’s assertion that the Plaintiff’s claim for reimbursement against the Defendant Company is against the principle of good faith, and that it is difficult for the Plaintiff to use the loan money in its name before and after the merger, and that it is difficult for the Plaintiff to use the loan money in its own name, and that the Plaintiff’s claim for reimbursement against the Defendant Company to use the loan money in its name is against the duty of trust and good faith, and that it is difficult for the Plaintiff to use the loan money in its own name, and that it is not against the duty of trust and good faith to use the loan money in its own name before and after the merger. However, the Plaintiff’s claim for reimbursement against the Defendant Company’s new Y’s new &C’s claim for reimbursement against the Defendant’s new 2’s claim for reimbursement.

C. Sub-committee

Therefore, the defendant is liable to the plaintiff for a total of 747,839,656 won of the amount of subrogated payment and the amount of subrogated payment to the plaintiff of New L&C (213,839,656 won of the amount of subrogated payment to the Bank of Korea + KRW 200,000 of the amount of subrogated payment to the Korea Technology Credit Guarantee Fund + KRW 130,000 of the amount of subrogated payment to the Korea Technology Credit Guarantee Fund + KRW 130,000 of the amount of subrogated payment to the Korea Technology Credit Guarantee Fund; KRW 213,839,656 of the amount of subrogated payment to the Bank of Korea from the date of December 27, 2007; KRW 200,000 of the amount of subrogated payment to the Korea Technology Credit Guarantee Fund from the date following the 200th day of December 28, 207; and KRW 200,000 of the amount of subrogated payment to the Korea Technology Credit Guarantee Fund from the date of 208.

3. Conclusion

Therefore, the plaintiff's claim of this case is justified within the above scope of recognition, and the remaining claims are dismissed as it is without merit. It is so decided as per Disposition.

Judges Lee Jin-ro (Presiding Judge)