[1] The burden of proving whether a beneficiary was unaware of the fact that another rehabilitation creditor was harmed at the time of the act subject to denial under Article 100(1)1 of the Debtor Rehabilitation and Bankruptcy Act (=beneficiary)

[2] The person in charge of rehabilitation procedures bears the burden of proving whether the subsequent purchaser becomes aware of the grounds for setting aside against the former beneficiary or the subsequent purchaser, as a requirement to exercise the right to set aside against the subsequent purchaser of the act subject to setting aside (=the custodian)

[3] In a case where Company A issued cashier's checks with funds withdrawn from the bank loan account opened by itself or a subsidiary and issued them to the representative director Eul, and delivered them to Byung for the purpose of repaying its debts to Byung's representative director without permission, and deposited this checks into Byung's bank account as provisional deposit, the case holding that the judgment below holding that Byung's act of issuing cashier's checks to Byung is subject to the exercise of right to set aside against the subsequent purchaser, even though there are many reasonable grounds to view that the act of issuing cashier's checks to Byung is subject to the exercise of right to set aside against the subsequent purchaser

[4] The act of extinguishing an obligation, such as repayment, performed by the debtor within 60 days prior to the suspension of payment, where the time of the act does not belong to the debtor's obligation does not infringe on equality with other rehabilitation creditors, etc. and thus is not subject to avoidance

[5] In a case where the debtor company issued cashier's checks with funds withdrawn from the bank loan account opened by the subsidiary as repayment two months prior to the maturity date, and delivered them to the creditor of the borrowed money, the case affirming the judgment below holding that the above issuing act constitutes an exercise of avoidance power under Article 100 (1) 3 of the Debtor Rehabilitation and Bankruptcy Act, and there is no special circumstance that the act does not harm equality with other rehabilitation creditors, etc. and thus is not subject to avoidance

[6] The burden of proof as to whether the creditor was unaware of the fact that the act subject to denial under Article 100(1)3 of the Debtor Rehabilitation and Bankruptcy Act would impair equality with other rehabilitation creditors, etc. (=creditor)

[7] Where the act subject to avoidance in rehabilitation procedures is harmful to other rehabilitation creditors, etc. but reasonable, whether the act is subject to the exercise of avoidance power (negative), and the standard for determining whether the act is reasonable

[8] The case holding that in a case where the debtor company immediately before the bill of exchange was issued a cashier's check with funds withdrawn from its own bank loan account, etc., and then delivered it to a certain creditor for the repayment of existing debts, but the check was collected as a collateral, but the date or following day of issuance of the check was eventually failed to settle the check, and thus, the act of issuing the check cannot be deemed as a case where the general rehabilitation creditor, etc. should accept the reduction of the assets of the rehabilitation company or unfair treatment because it is deemed that the act of issuing the check was necessary and reasonable in the social

[1] A custodian of rehabilitation procedures may deny an act performed by the debtor with knowledge that the debtor would harm the rehabilitation creditor or the rehabilitation secured creditor (hereinafter “ rehabilitation creditor, etc.”). In such cases, where a person who received a benefit from each act (hereinafter “beneficiary”) did not know the fact that the rehabilitation creditor, etc. was harmed at the time of the act, such act cannot be denied, but such act cannot be denied, given that the beneficiary’s bad faith is presumed, the beneficiary bears the burden of proving the burden of proof for his/her good faith.

[2] In order to exercise the right to set aside against a subsequent purchaser of an act subject to setting aside, a trustee in charge of rehabilitation procedures must inform the subsequent purchaser of the grounds for setting aside under Article 100(1) of the Debtor Rehabilitation and Bankruptcy Act with respect to the former beneficiary or the subsequent purchaser (electronic) (Article 110(1)1 of the same Act), and barring special circumstances, the trustee in charge of the subsequent purchaser’s bad faith bears the burden of proving the subsequent purchaser’s burden of proving the subsequent purchaser’s bad faith.

[3] In a case where Gap company issued cashier's checks with funds withdrawn from its own or the bank account opened by its subsidiary and issued them to the representative director, and Eul issued checks for the purpose of paying its debts to Byung's bank account with no representative representing Byung's representative director, the case holding that the above cashier's checks were issued to Byung, regardless of its name, such as repayment of borrowed funds, donation, lending, etc., Eul issued checks to Byung for its own debt without definition, or that Eul issued checks to Byung for the purpose of paying its debts to Byung's representative director without definition, or that Eul issued checks to Byung for the purpose of selling them again for lease, etc., but the above cashier's check was issued to Byung for the purpose of avoidance because the above cashier's act of paying its debts to Byung is sufficient and reasonable, and because the above cashier's checks were delivered to Byung, the court below's act of denying Eul's obligation should be viewed as having been issued to Byung's specially related person, which is the object of the above cashier's check, and there is no error in law by misunderstanding of law as to 10.

[4] Where a debtor’s act of extinguishing an obligation within 60 days prior to the suspension of payment does not belong to the debtor’s obligation, barring special circumstances, the act becomes subject to avoidance by causing rehabilitation creditors, etc. (Article 100(1)3 of the Debtor Rehabilitation and Bankruptcy Act). However, in cases where the debtor borrows funds from a third party to raise funds to extinguish an obligation such as repayment, the third party and the debtor agreed to use the loan in order to extinguish the specific obligation, and the repayment of the specific obligation was made in accordance with the agreement. In light of all the circumstances, including the time, circumstances, and methods of the loan and the loan, it can be deemed that the repayment of the specific obligation was made by the loan in question. Considering the third party providing conditions of the loan, such as interest, repayment period, and collateral security, and the relationship between the debtor and the third party providing the loan and the debtor, if it is acknowledged that the debtor’s assets have not been reduced after the extinguishment of the obligation, such as repayment, etc., as a whole, the act of extinguishing the obligation can be deemed as a special circumstance not exist.

[5] In a case where the debtor company issued cashier's checks with funds withdrawn from the bank loan account opened by the subsidiary as repayment two months prior to the maturity date, and delivered them to the creditor of the borrowed money, the case affirming the judgment below holding that the above issuing act constitutes an exercise of avoidance power under Article 100 (1) 3 of the Debtor Rehabilitation and Bankruptcy Act, and the debtor company cannot be recognized as having been provided with funds to the subsidiary company only for the purpose of paying the above creditor at the time when it was provided with funds to the subsidiary company, and there are no special circumstances where the above issuing act is not subject to avoidance because it does not harm other rehabilitation creditors, etc.

[6] Even if an act subject to avoidance under Article 100 (1) 3 of the Debtor Rehabilitation and Bankruptcy Act is an act subject to avoidance, if the obligee did not know that the obligor would impair equality with other rehabilitation creditors, etc. at the time of the act, it shall not be denied. However, in such a case, the obligee is presumed to have known that the obligor would impair equality with other rehabilitation creditors, etc. at the time of the act, and thus, the obligee bears the burden of proof as to

[7] Even if the act subject to avoidance in the rehabilitation procedure is harmful to rehabilitation creditors, etc., there are cases where it is deemed that rehabilitation creditors, etc. should suffer a decrease in the assets of the rehabilitation company or unfair business practices due to individual and specific circumstances at the time of the act. In such exceptional cases, it shall not be subject to the exercise of avoidance power under Article 100(1) of the Debtor Rehabilitation and Bankruptcy Act in light of the guiding ideology or the concept of justice of the law, such as equality of creditors and coordination of interests in the protection of debtors. Here, the existence of reasonableness of the act should be determined specifically in light of the principle of good faith and the idea of fairness, in light of the source of repayment fund, relationship between the rehabilitation company and creditors, and whether the creditor exercised influence, such as in collusion with the rehabilitation company or forcing the rehabilitation company to repay.

[8] In a case where the debtor company immediately before the bill of exchange was issued a cashier's check with funds withdrawn from its own bank's loan account, etc., and then delivered it to a certain creditor for the repayment of the existing debt, but the check was collected as a collateral, but the date or following day of issuance of the check was eventually impossible to settle the check, the case held that the act of delivery of the check is deemed to have collected the check issued at king and to be exempted from criminal punishment of the representative director due to the issuance of the check, and even considering the motive of the act, it is difficult to conclude that the act of delivery of the check constitutes an act of objectively assisting the company's rehabilitation, in light of the fact that it is difficult to conclude that the act of payment of the specific debt provided as a collateral is an act of objectively assisting the company's rehabilitation, since it is deemed that the act of delivery of the check was necessary and reasonable, or that ordinary rehabilitation creditors, etc. should accept the reduction of company's property or unfair business.

[1] Article 100(1)1 of the Debtor Rehabilitation and Bankruptcy Act, Article 288 of the Civil Procedure Act / [2] Articles 100(1) and 110(1)1 of the Debtor Rehabilitation and Bankruptcy Act, Article 288 of the Civil Procedure Act / [3] Articles 100(1)1 and 110(1)1 of the Debtor Rehabilitation and Bankruptcy Act, Article 288 of the Civil Procedure Act / [4] Article 100(1)3 of the Debtor Rehabilitation and Bankruptcy Act / [5] Article 100(1)3 of the Debtor Rehabilitation and Bankruptcy Act / [6] Article 100(1)3 of the Debtor Rehabilitation and Bankruptcy Act, Article 288 of the Civil Procedure Act / [7] Article 100(1) of the Debtor Rehabilitation and Bankruptcy Act, Article 288 of the Civil Act

[7] Supreme Court Decision 2005Da22398 Decided September 21, 2007

Non-party 1 (Attorney Kim Jong-young et al., Counsel for the defendant-appellant)

Korean Bank, Inc.

Mansung Unemployment Co., Ltd. (Law Firm Civil and Civil, Attorneys Go Tae-tae et al., Counsel for the defendant-appellant)

Seoul High Court Decision 2008Na119431 decided August 13, 2009

The part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the Seoul High Court. The Defendant’s appeal is dismissed.

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

1. Plaintiff’s ground of appeal

A. As to the second ground for appeal

According to the reasoning of the judgment below, the court below rejected the plaintiff's assertion that on January 31, 2008, the Postal Construction Co., Ltd. (hereinafter "Postal Construction") issued the instant cashier's checks (the cashier's checks listed in attached Tables 1 through 6, 10 through 13 of the judgment of the court below) to the defendant directly, and such acts constitute the object of avoidance as stipulated in Article 100 (1) 1 or 3 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter "Act"), on the grounds that the evidence submitted by the plaintiff is insufficient to recognize the fact that Postal Construction Co., Ltd. directly delivers the instant cashier's checks to the defendant, and there is no other evidence to prove otherwise.

Examining the reasoning of the judgment below in light of the records, we affirm the above judgment of the court below, and there is no error in the misapprehension of the reasoning as otherwise alleged in the ground of appeal.

The ground of appeal on this part is without merit.

B. As to the grounds of appeal Nos. 1 and 3

A custodian of rehabilitation procedures may deny any act performed by the debtor with the knowledge that the debtor would harm rehabilitation creditors or rehabilitation secured creditors (hereinafter referred to as " rehabilitation creditors, etc."). In such cases, where any person who received any benefit from each act (hereinafter referred to as "beneficiary") did not know the fact that the rehabilitation creditors, etc. at the time of such act, such act cannot be denied, but such act cannot be denied, given that the beneficiary's bad faith is presumed, the beneficiary bears the burden of proof for the good faith.

Meanwhile, in order for the custodian of rehabilitation procedures to exercise the right to set aside against the subsequent purchaser of an act subject to setting aside, the subsequent purchaser must be aware of the grounds for setting aside prescribed in Article 100(1) of the Act with respect to the former beneficiary or the subsequent purchaser (electronic), and barring special circumstances, the custodian bears the burden of proving the subsequent purchaser’s bad faith to the subsequent purchaser, barring any special circumstance.

According to the reasoning of the judgment below, the court below rejected the plaintiff's assertion that on January 31, 2008, the Postal Construction issued the instant cashier's check to the non-party 1 who was the representative director, and issued the instant cashier's check to the non-party 2 for the repayment of debts to the non-party 1, and the non-party 2 again offered it to the non-party 2 for the repayment of debts to the non-party 1's representative director, or the Postal Construction directly offered the instant cashier's check to the non-party 2 for the repayment of debts to the non-party 2, and the non-party 2 offered it as a loan to the defendant. In any case of all evidence submitted by the plaintiff, the Postal Construction issued the instant cashier's check to the non-party 1 under the name of the non-party 1 for the repayment of debts to the non-party 2 who was the non-party 1's representative director, and there was no other evidence to acknowledge that the non-party 1's act was the non-party 2 or the above.

In light of the reasoning of the judgment below, in accordance with the plaintiff's assertion, the judgment of the court below is based on the premise that the defendant's burden of proof of bad faith, which is attached to the position of the subsequent purchaser, is the administrator, and there is no error in the judgment below in violation of the legal principles as to the burden of proof

However, the court below's rejection of the plaintiff's assertion on the grounds as seen earlier is difficult to accept for the following reasons.

First, according to the reasoning of the lower judgment, there is no evidence to acknowledge that the instant cashier’s checks were issued directly to the Defendant. However, according to the testimony, etc. of Nonparty 3, which was not rejected by the lower court, Nonparty 3, who served as the Defendant’s management director on January 31, 2008, issued the instant cashier’s checks to Nonparty 2 as partial repayment of private bonds by Nonparty 1, who is the representative director of the postal administration construction. The instant cashier’s checks were deposited into the Defendant’s bank account on February 1, 2008, under the name of Nonparty 2’s representative director, and issued 2.4 billion won in total to Nonparty 1’s respective cashier’s checks (such as list 5,6,100 or 13 of the instant cashier’s checks) to Nonparty 2 under the name of Nonparty 3’s representative director’s checks, etc., or issued 9.7 billion won in total face value of the instant cashier’s checks to the Defendant.

If the circumstances leading to the issuance of the instant cashier’s checks to Nonparty 1 are as follows: (a) the act of issuing the instant cashier’s checks to Nonparty 2 is deemed to harm the rehabilitation creditors or rehabilitation secured creditors of postal administration construction (hereinafter “ rehabilitation creditors, etc.”); (b) the act of issuing the instant cashier’s checks to Nonparty 2, the Defendant’s act of not issuing the instant cashier’s checks to Nonparty 1; (c) the act of issuing the instant cashier’s checks to Nonparty 2 at the time of the issuance of large amount of bonds to Nonparty 1; and (d) the Defendant’s act of issuing the instant cashier’s checks to Nonparty 2 on the same date is deemed to be subject to avoidance stipulated in Article 100(1)1 of the Act. Furthermore, even if the Defendant’s assertion was based on the lower court’s judgment, the Defendant had loans to Nonparty 2 from around 202 to 203; and (e) the Defendant’s act of issuing the instant cashier’s checks to Nonparty 1 and the instant cashier’s checks on the same date.

On the contrary, if the circumstances leading up to issuing the instant cashier’s checks are as follows: (a) the issuance of the instant cashier’s checks to Nonparty 2 of postal administration construction on behalf of another person in excess of liabilities or in fact in insolvency; (b) the act detrimental to rehabilitation creditors, etc. may also be denied under Article 100(1)1 of the Act; and (c) in this case, Nonparty 2’s bad faith, who is the beneficiary, is presumed to be presumed to be the beneficiary; and (d) if Nonparty 2’s bad faith, who is the representative director, is presumed to be presumed to

Therefore, even though there is room to view that the Defendant’s act of delivering the instant cashier’s checks from Nonparty 2 is subject to the exercise of the right to set aside against the subsequent purchaser, the lower court rejected the Plaintiff’s assertion that the Defendant, who acquired the instant cashier’s checks, exercised the right to set aside against the Defendant, solely on the grounds as indicated in its reasoning. In this context, the lower court erred by misapprehending the legal doctrine on the burden of proof of the beneficiary’s good faith in the rehabilitation procedure, or exceeding the bounds of the principle of free evaluation of evidence in violation of logical and empirical rules in determining the value of fact-finding and evidence, thereby adversely affecting the conclusion of the judgment. The allegation in the grounds of appeal

2. As to the Defendant’s ground of appeal

A. As to the assertion that the repayment by the loan is not subject to avoidance

In a case where a debtor’s act of extinguishing an obligation within 60 days prior to the suspension of payment does not belong to the debtor’s obligation, barring any special circumstance, barring any special circumstance, it becomes subject to avoidance by damaging the debtor’s property (Article 100(1)3 of the Act). However, in a case where the debtor borrows funds from a third party to raise funds to extinguish his/her obligation, such as repayment, from a third party, the third party and the debtor agree to use the borrowed funds to extinguish the specific obligation, and the repayment of the specific obligation was actually made according to the agreement. In light of all the circumstances, including the time, circumstances, and methods of the loan and repayment, it can be deemed that the repayment of the specific obligation was made by the loan. Considering the conditions of the loan such as interest, repayment period, and collateral security, and the relationship between the third party and the debtor, if it is acknowledged that the debtor’s property is not reduced after the repayment, etc. extinction of the obligation, the act of extinguishing the obligation such as repayment, etc. can be deemed as a whole and special circumstances exist.

The court below rejected the defendant's assertion that the act of delivering the second cashier's check to the defendant on January 31, 2008, which was before the maturity date of March 31, 2008, which was 2.5 billion won of the borrowed debt owed by the construction of postal services to the defendant, constitutes an exercise of the right to set aside under Article 100 (1) 3 of the Act, and that the issuance of the second cashier's check to the defendant is not subject to avoidance because the postal administration construction was issued with the money borrowed from Jindo Construction or from the plaintiff's supplementary intervenor and issued the second cashier's check to the defendant. The court below rejected the defendant's assertion that the Jindo Construction was recognized to have issued the second cashier's check, although it was recognized that the postal administration construction was issued with the funds withdrawn from the borrowed account opened under the credit transaction agreement entered into with the plaintiff's supplementary intervenor, and there was no evidence to acknowledge that the postal administration construction was provided on the condition that it was used only for the repayment

Although the reasoning of the judgment below is not sufficient, the above measure of the court below is acceptable in light of the above legal principles, and there is no error in the misapprehension of legal principles as to the requirements for the establishment of the avoidance power in the rehabilitation procedure, as otherwise alleged in the ground of appeal.

The ground of appeal on this part is without merit.

B. As to the argument that the defendant is a bona fide beneficiary

Even if an act subject to avoidance prescribed in Article 100 (1) 3 of the Act is an act subject to avoidance, if a creditor does not know that at the time of such act the debtor harms equality with other rehabilitation creditors, etc., it shall not be denied, but in such a case, the creditor is presumed to have known that the debtor would harm equality with other rehabilitation creditors, etc. at the time of such act, and thus, the creditor bears the burden of proof for his good faith

According to the reasoning of the judgment below, in light of the relationship between the defendant and the construction of postal services, and the circumstances where the number of shares of postal services construction was suspended immediately after the construction of postal services provides the defendant with the second cashier's checks, the court below determined that each of the evidence in its judgment alone is insufficient to recognize that the defendant was unaware of the fact that he would prejudice the creditor of postal services construction at the time of issuance of the

The judgment of the court below is just on the premise of the above legal principles, and it did not err by misapprehending the legal principles on the burden of proof as to the good faith of the beneficiary in the rehabilitation procedure, as otherwise alleged in the ground of appeal.

This part of the grounds of appeal is without merit.

C. As to the assertion that the act is not subject to avoidance as reasonable

Even if the act subject to avoidance under rehabilitation procedures is harmful to rehabilitation creditors, etc., there may be cases where it is deemed that rehabilitation creditors, etc. need to suffer decrease or unfair business practices due to the individual and specific circumstances at the time of the act. In such exceptional cases, it shall not be subject to the exercise of the right to set aside under Article 100(1) of the Act in light of the guiding ideology or the concept of justice, such as equality of creditors, protection of debtors, and coordination of interests among creditors. Here, the determination of reasonableness of such act should be made specifically in light of the principle of good faith and the ideology of fairness, as well as the subjective state of the rehabilitation company at the time of the act, such as the source of the repayment fund, relationship between the rehabilitation company and creditors, and whether the creditor in collusion with the rehabilitation company or exercised influence such as forcing the rehabilitation company to repay (see, e.g., Supreme Court Decision 2005Da22398, Sept. 21, 207).

According to the reasoning of the judgment below and the records, the total amount of 286,025,00,000 won and the total amount of 313,773,000,000 won and the amount of 24.4 billion won and the amount of 2.4 billion won and the 1.5 billion won and the 1.0 billion won and the 2.5 billion won and the 2.3 billion won and the 1.5 billion won and the 200 billion won and the 3.5 billion won and the 3.0 billion won and the 1.5 billion won and the 200 billion won and the 1.3 billion won and the 3.0 billion won and the 1.0 billion won and the 205 billion won and the 3.7.1 billion won and the 3.7.08 billion won and the 205 billion won and the 3.7.1 billion won and the 2005 billion won and the 3.7.1 billion won and the 3.7.

In light of the above facts, it appears that the delivery of the check on January 31, 2008 to the Defendant of the check on the second cashier’s check was to be aimed at getting the representative director of the non-party 1 criminal punishment of the non-party 1 due to the illegal issuance of the check after recovering the check on January 31, 2008, and, even considering the motive for such act, it is clear that the act of paying a large amount of promissory notes was done in default and thus, it is difficult to conclude that the act of paying a certain amount of obligations provided as a collateral is objectively helpful for the company’s rehabilitation. In addition, in full view of all the circumstances such as the source of funds for each of the above-issued check, the amount of the repayment, and the time when the construction of the postal administration was insolvent, it is not recognized that the act of issuing the second cashier’s check on the postal administration constitutes a case where it is deemed that the ordinary rehabilitation creditors, etc. should be subject to the reduction of the company’s property

Although the reasoning of the court below is somewhat insufficient, it is just to reject the defendant's assertion that the issuance of the second cashier's check constitutes a substantial act and thus it does not constitute an exercise of the avoidance power, and there is no error of law such as misunderstanding of legal principles as to the requirements for the exercise of the avoidance power in the rehabilitation procedure, as otherwise

This part of the ground of appeal is without merit.

D. As to the assertion that it constitutes a violation of the good faith principle or an abuse of avoidance power

The court below determined that the plaintiff's exercise of the right to set aside against the defendant is a violation of the principle of good faith, on the ground that the Postal Construction provides the defendant with the second cashier's checks for the purpose of recovering the check issued as debt security, and that when the representative director is exempted from criminal punishment, it would violate the principle of good faith or abuse the right to set aside power. The second cashier's checks, which issued the second cashier's checks, and the repayment of the debt to the defendant is a postal construction before the commencement of the rehabilitation procedure. The exercise of the right to set aside power under the Act is a legal separate entity between the debtor and the debtor, and the exercise of the right to set aside power constitutes the inherent authority of the manager to deny the repayment of the company's debt prior to the commencement of the rehabilitation procedure.

The above judgment of the court below is just and acceptable, and there are no errors in the misapprehension of the principle of good faith or the legal principles on abuse of the right to set aside in the rehabilitation procedure, as alleged in the grounds of appeal.

The defendant's ground of appeal on this part cannot be accepted.

E. As to other grounds of appeal

The Defendant’s other grounds of appeal are the purport of disputing the selection of evidence or fact-finding, which belongs to the lower court’s exclusive jurisdiction, and is not a legitimate ground of appeal.

3. Conclusion

Therefore, the part of the lower judgment against the Plaintiff is reversed, and that part of the case is remanded to the lower court for further proceedings consistent with this Opinion. The Defendant’s appeal is dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Cha Han-sung (Presiding Justice)