The bankruptcy trustee of the bankrupt, who is the bankrupt, the bankruptcy trustee of the East Asia Mutual Savings and Finance Company, the bankruptcy trustee of the bankrupt, the bankruptcy trustee of the East Asia Mutual Savings and Finance Company, and the bankruptcy trustee of the bankrupt, the bankruptcy trustee of the East Asia Mutual Savings and Finance Company, the bankruptcy trustee of the bankrupt, the bankruptcy trustee of the East Asia Mutual Savings and Finance Company, the bankruptcy trustee of the Lee Jong-soo, the bankruptcy trustee of the Korea Deposit Insurance Personnel, the

Hyundai Swiss Mutual Savings Bank, Inc. and one other (Law Firm Chungcheong, Attorney Lee Jong-young, Counsel for the defendant-appellant)

September 13, 2005

Seoul Eastern District Court Decision 2002Gahap1343 Delivered on July 22, 2004

1. The plaintiff's appeal and the part of the plaintiff's claim that are changed in exchange in the trial are all dismissed.

2. The costs of the trial shall be borne by the plaintiff.

1. Purport of claim

A. As to each real estate listed in the separate sheet 1, each of the mortgage contract concluded on December 9, 200 between Defendant Hyundai Switzerland Mutual Savings Bank and Defendant Hyundai Switzerland Mutual Savings Bank and each of the mortgage establishment registration listed in the separate sheet 2 is denied.

B. The Plaintiff paid KRW 1,686,974,744 to the Defendant Hyundai Switzerland Mutual Savings Bank, and KRW 1,062,902,142 to the Defendant Hyundai Switzerland Mutual Savings Bank, Defendant Hyundai Switzerland Mutual Savings Bank, respectively (the Plaintiff changed the part of the claim in this case seeking the right to claim dividends and the notification of the transfer to the Plaintiff to seek monetary payment in the first instance).

2. Purport of appeal

The judgment of the first instance shall be revoked. The same shall apply to the description of the claim(a).

1.1. Basic Facts

The following facts are without dispute between the parties, or evidence of No. 1 through 3, evidence No. 1 through 4, evidence No. 3-1 through 4, evidence No. 4-1 through 4, evidence No. 5, evidence No. 6-1, 2, 7, evidence No. 9-1, 2, 10, evidence No. 11-1 through 3, evidence No. 12-1 through 4, evidence No. 14-3 through 5, 15 and 16, evidence No. 14-1 through 4, evidence No. 2-1 through 4, evidence No. 4-1 through 6, evidence No. 4-2, evidence No. 6-1, 7-2, evidence No. 1, 8-2, 1, 21, 4-1, and 5-2, and the purport of the whole evidence No. 1, No. 5-1, 4-1, and 5-2.

A. The plaintiff's status and the succession of lawsuit;

(1) On June 15, 2001, Dongi Mutual Savings and Finance Company (hereinafter “Dongi Mutual Savings and Finance Company”) was declared bankrupt by the Seoul Central District Court, and was appointed as the bankruptcy trustee on June 15, 2001 by attorneys Jeong Jong-jin and employees of the Korea Deposit Insurance Corporation. On April 25, 2003, the lawsuit in this case was pending in the first instance court, and the procedure for taking the procedure for taking the procedure of taking the lawsuit in succession was changed again on December 15, 2003 to Kim Jong-ho, which was changed again on December 15, 2003.

(2) (Name omitted) (hereinafter “Bankruptcy”) is an oligopolistic shareholder holding 51.9% of the shares of the East Asia’s Treasury, and has been in charge of duties as the president of the East Asia’s Treasury. The creditor, asserting that the instant real estate disposal act by the bankrupt constitutes a fraudulent act, and that the instant lawsuit seeking the revocation was pending in the first instance trial, and the Plaintiff was appointed as the bankruptcy trustee on November 5, 2003 by being declared bankrupt by the Seoul Central District Court on April 30, 2004. Accordingly, the Plaintiff, who was interrupted under Articles 78(2) and 60(1) of the Bankruptcy Act, was in charge of exercising the avoidance power under the Bankruptcy Act while taking over the instant lawsuit, and changed the purport of the claim and the cause of the claim.

(b) Use of illegal investors loans and loans by the bankrupt;

(1) Notwithstanding the fact that the bankrupt is an investor of the East Asia’s Fund, and is not entitled to a lawful loan from the East Asia’s Fund under the Mutual Saving and Finance Company Act, the bankrupt did not offer a security to the East Asia’s Fund with a major shareholder and a president position, and received a loan of KRW 1,543,439,00 from the name of the company (title omitted) in the form of a unsecured credit loan, as well as a loan of KRW 247,07,07,114,00 in total over 301 times during the period from February 14, 1995 to December 8, 200, the bankrupt borrowed the loan of KRW 22,429,114,00 (the amount of the loan as above was 22,429,114,000 until November 21, 200) and did not repay it.

(2) The bankrupt, who is one’s own partner and is the vice president, non-party 1, vice president 2, standing auditor 3, non-party 4, executive director, and non-party 5, etc. with an order to borrow an illegal investor loan. The amount equivalent to KRW 79,630,00,000 for the repayment of the principal and interest of the existing loan, the amount equivalent to KRW 31,520,000 for the repayment of principal and interest of the loan of other financial institutions, the amount equivalent to KRW 114,570,000 for the stock investment, and the amount equivalent to KRW 41,830,00,000 for the support of the affiliate, which is the shareholder of the bankrupt or his family, and the amount equivalent to KRW 16,570,000 for the capital increase and the compensation for the loss of claim.

(c) Disposition of real estate by the bankrupt;

The bankrupt was a change in the name of the defendant Hyundai Switzerland Mutual Savings Bank (former Hyundai Switzerland Mutual Savings Bank on August 8, 200, Hyundai Switzerland Mutual Savings Bank on March 1, 200, changed to the current name on March 1, 2002; hereinafter the defendant's "on-site Savings Bank"), with loans of total of KRW 3.2 billion on December 14, 199 and June 29, 190, each of the total of KRW 1.6 billion on June 29, 200, and the name of the defendant Hyundai Switzerland Mutual Savings Bank (former Gangnam Mutual Savings Bank Co., Ltd. and Hyundai Switzerland Mutual Savings Bank on August 10, 200 changed to the current name on March 1, 20, each of the above contracts to establish a mortgage on July 21, 200 each of the above real estate (hereinafter referred to as "mortgage-mortgage agreement") was entered as a collateral each of the above real estate registered on July 21, 2002.

D. The bankrupt's property status at the time of establishing each of the instant mortgage contracts

(i)affirmative property;

(4) At the time of each contract to establish a collective security right of this case, (1) the bankrupt owned 3,420,276,060 won in the auction case for the exercise of the security right of this case (Seoul Eastern District Court 201 200,270,000 won. (2) The appraisal value of the real estate was 2,61,000 won around October 8, 2001. (3,63.89/3,327.6 shares and its ground, which were 1,663.89/6, 78.7 shares and 20.7 shares in the auction case of the same real estate (20,000,000,0000,000,000,0000,0000,000,0000,000,0000,000,000,000,000,000 won.)

In addition, the bankrupt was holding 51.9% of the shares of the East Asia Treasury (the paid-in capital of KRW 20,000,000), and 71.06% of the shares of the credit safe (mutual omitted) (the paid-in capital of KRW 40,130,00,000), but in the case of the East Asia Treasury, as of December 8, 2000 as of December 8, 200, as of December 26, 200, the liabilities of KRW 5,05.5 billion of the assets were in excess of KRW 7,72 billion of the assets, and the business was suspended after the commencement of the business management as of December 9, 200, (mutual omitted) as of December 26, 200, as of December 26, 200, the assets were suspended as of KRW 3,548,000,000 of the credit safe as of December 26, 2000.

(2) Petty property

As seen in the above A. (2), the bankrupt was liable for damages of KRW 247,077,114,00 for the East Asia’s Fund (the amount of illegal investor loan up to November 21, 200) (the amount of KRW 222,429,114,000 for the loans of KRW 229,114,00 for the Defendant’s Mutual Savings), the debtor was liable for the loans of KRW 2 billion for the Defendant’s Hyundai Mutual Savings; the debtor was liable for the repayment of KRW 45,00,000 for the deposit money of KRW 45,000 for the Defendant’s Joint Defendant in the first instance trial; and the debtor was liable for the registration of establishment of a mortgage of KRW 143-41,496.8,000 for each of the above buildings with KRW 143-4,000 for each of the above 21,000 for each of the above common property at the time of registration of establishment of a mortgage.

(e) Business suspension order and accusation against the Fund of East Asia;

(1) In addition to the increase in losses due to the above large amount of illegal loans by the bankrupt and the investment losses due to the improper operation of surplus funds in excess of the limit of investment in securities, the Bank of East Asia revised on October 31, 200 and revised on January 1, 200, under the Depositor Protection Act that will enter into force on January 1, 2001, reduced the limit of insurance money to KRW 50,000,000, the demand for withdrawal of deposit from the deposit holders may be avoided, and eventually, on December 8, 200, it applied for suspension of business and business management to the Financial Supervisory Service on December 8, 200, and the Financial Supervisory Service commenced business management on December 9, 200.

(2) After that, as illegal investor loan to the bankrupt was revealed, on January 3, 2001, the Governor of the Financial Supervisory Service accused 11 of the bankrupt, Nonparty 1, and Nonparty 3, and reported the fact to the media on the ground that the above illegal investor loan to the Seoul Central District Prosecutors' Office constituted illegal and unfair business operations, and the Financial Supervisory Commission revoked the business license of the East Asia's Treasury on April 27, 2001.

F. Progress of auction of each real estate of this case

On March 10, 2001, the Defendant Hyundai Mutual Savings filed an application for auction to exercise the right to collateral on March 12, 2001 with respect to each of the instant real estate at Seoul Eastern District Court Decision 2001Mo3904, and the commencement of auction on March 12, 2001 was awarded to Nonparty 6 on March 11, 2002 at KRW 2,61,00,00, and each of the instant mortgages was cancelled on the same day. On March 27, 2002, the establishment registration of each of the instant units was first 1,594,346,201 won with respect to the Defendant Hyundai Hyundai Mutual Savings and the Defendant Hyundai Hyundai Mutual Savings and KRW 1,04,539,50 won with respect to each of the instant units of real estate at KRW 1,597,646,976,205,296,205,279,2964,279,27,294,27, and945, respectively.

2.2. The argument and judgment

A. The plaintiff's assertion

The plaintiff asserts that each of the instant mortgage contract constitutes a legal act subject to avoidance under Article 64 subparagraph 1 of the Bankruptcy Act as a fraudulent act, and that the act of non-performance of the effective requirements based on the above fraudulent act is subject to avoidance under Article 64 subparagraph 1 of the Bankruptcy Act and Article 66 subparagraph 1 of the Bankruptcy Act, as the conjunctive act is subject to avoidance under Article 64 subparagraph 1 of the Bankruptcy Act and Article 66 subparagraph 1 of the same Act. Thus, the plaintiff's right to set aside each of the instant mortgage contract and each of the establishment registration of mortgage are denied upon the plaintiff's exercise of the plaintiff's right to set aside, and the defendants are obligated to pay to the plaintiff each

B. Determination on each part of each of the instant mortgage contract

(1) Whether a fraudulent act was committed

Article 64 subparagraph 1 of the Bankruptcy Act provides not only fraudulent act which reduces the general property of a bankrupt who is a joint security for bankruptcy claims by deviating from the general property of the bankrupt, which is a joint security for the whole bankruptcy claims, but also includes so-called biased act which interferes with equal distribution among the bankruptcy creditors by affecting the bankrupt's property relations, such as repayment to a specific creditor or provision of security against a specific creditor (see Supreme Court Decision 2001Da78898 delivered on August 23, 2002), but also includes so-called biased act which interferes with equal distribution among the bankruptcy creditors (see Supreme Court Decision 2001Da78898 delivered on August 23, 2002). Meanwhile, if it is known that the bankrupt's act would reduce the liability property, which is a joint security for the bankruptcy creditors at the time of the act being denied, or undermine the satisfaction of other bankruptcy creditors, at the time of the act being denied, it can be recognized.

On the other hand, according to the above facts, unlike the other real estate of the bankrupt, the real estate of this case was not in excess of the active property, and according to the evidence No. 3-1 through No. 3, unlike the other real estate of the bankrupt, the real estate of this case has no burden of provisional seizure or collateral security before the registration of establishment of each of the preceding real estate of this case was completed. In light of these facts and the fact that even if the debtor establishes a security right to the existing obligation, the security right becomes a right to separation of bankruptcy (Article 84 of the Bankruptcy Act) and the total amount of the dividends of other bankruptcy creditors may be reduced to that degree, it would result in a violation of fairness in relation to other bankruptcy creditors, and the bankrupt's act of entering into each of the contracts of this case with the defendants of this case would result in a loss to other bankruptcy creditors.

(2) Determination as to the Defendants’ bona fide assertion

The defendants asserted that the bankrupt was not aware of the fact that the bankrupt was in excess of his/her liability in August 2000, when the documents necessary for the registration of the establishment of the neighboring mortgage were received from the bankrupt.

In light of the following facts: first of all, the Defendants received the documents necessary for the registration of creation of the mortgage of this case from the bankrupt on or around August 2000, each part of the evidence Nos. 12 and 13, corresponding thereto, is difficult to believe; the records Nos. 3, 14-1 and 2, and the fact inquiry conducted on July 1, 2005 with respect to the head of the Gangnam-gu Seoul Metropolitan City Gambling 2 Dong-gu, Seoul. However, there is no other evidence to acknowledge it; however, according to each evidence Nos. 4 and 3-2, the date of issuance of each certificate of personal seal impression attached to the written application for the registration of establishment of the mortgage of this case was all the date of issuance of each certificate of personal seal impression attached to the written application for the registration of establishment of each of the mortgage of this case from November 22, 200 to Nov. 22, 200 to 30, the Financial Supervisory Service had already secured the documents of this case between the Defendants and each of this case.

Furthermore, examining whether each of the above contracts establishing a mortgage was established by the Defendants on November 2, 200. The Defendants were 1 to 6, 14-1, and 11-2 of the evidence Nos. 1 to 3, and the Defendants were 1 to 200,000 won for each of the above contracts establishing a mortgage. The Defendants were 200,000,000 won and were 1 to 30,000,000 won for each of the above contracts establishing a mortgage. The Defendants were 1 to 30,000 won for each of the above contracts establishing a mortgage, and the Defendants were 1 to 30,000,000 won for each of the above contracts establishing a mortgage. The Defendants were 1 to 30,000 won for each of the above contracts establishing a mortgage by the Bankrupt and 1 to 106,000 won for the reason that they were not aware of each of the above contracts establishing a mortgage.

C. Determination as to each part of the establishment registration of a neighboring mortgage of this case

(1) Judgment on the main argument

The purport of Article 66 of the Bankruptcy Act, which provides for the requirements for setting up against the obligor and the requirements for effective effect itself, is to be set aside by the general provisions of Article 64 of the Bankruptcy Act. However, if it is impossible to deny the act which is the cause of the alteration of a right, it shall be interpreted that the act meets the requirements for setting up against the obligor and the requirements for setting up the obligor should be set aside as much as possible, and if it satisfies the strict requirements under Article 66 of the Bankruptcy Act, it shall be particularly denied. Thus, it shall be interpreted that the act satisfying the requirements for the effect of the alteration of right shall be set aside only if it satisfies the strict requirements under Article 66 of the Bankruptcy Act, and it shall not be set aside under Article 64 of the Bankruptcy Act (see Supreme Court Decision 2003Da53497, Feb. 12, 2004).

Therefore, since the establishment registration of each of the preceding mortgages of this case is the effective condition of each of the instant mortgages contracts, it shall not be subject to avoidance under Article 64 of the Bankruptcy Act independently from each of the instant mortgages contracts, which are the act of causing the establishment registration of each of the instant mortgages of this case. Therefore, the Plaintiff’s assertion that each of the instant mortgages of this case is subject to avoidance under Article 64 of the Bankruptcy Act is without merit without further review.

(2) Judgment on the conjunctive assertion

Article 66 of the Bankruptcy Act provides that in case where a registration that has the effect of establishing a right has been made after the suspension of payment or a petition for bankruptcy was filed, such registration may be denied if it was made in bad faith 15 days after the act of assuming an obligation, which is the cause of the registration, was performed in bad faith after the expiration of 15 days from the date on which the act of assuming an obligation, which is the cause of the registration, was performed. As seen earlier, the fact that all the establishment registration of a neighboring mortgage of this case was made before August 2003 on the date on which the petition for bankruptcy was filed against the bankrupt, and there is no evidence to prove that there was a payment suspension under the Bankruptcy Act before the bankruptcy petition was filed against the bankrupt. Thus, each

On the other hand, the plaintiff argued that the bankrupt's act of escape was an external expression of his intention to suspend payment explicitly and implicitly, but the above facts alone cannot be seen as a suspension of payment. Thus, the plaintiff's above assertion is not accepted. The plaintiff's assertion is not accepted. The plaintiff's assertion that the bankrupt's act of escape is not a suspension of payment.

3. Conclusion

Therefore, all of the plaintiff's claims in this case are dismissed as it is without merit (the part seeking the right to claim dividends and the notification of transfer has been withdrawn due to the exchange change in the trial and the judgment of the court of first instance has become null and void). The judgment of the court of first instance on this part is just and consistent with this conclusion, and the plaintiff's appeal is dismissed, and all of the part seeking the payment of the changed amount in exchange at the trial is dismissed as it is without merit, and it is so decided as per Disposition.

[Attachment]

Judges Clerks (Presiding Judge)