[1] Purport of the requirements for authorization of reorganization plan under Article 233 (1) of the Company Reorganization Act

[2] The meaning of "fair and equitable" under Article 233 (1) of the Company Reorganization Act

[3] The case holding that an approval of a reorganization plan with the content that all stocks of insolvent stockholders of the reorganization company are retired without compensation cannot be deemed as unconstitutional beyond the limit of violation of Article 233 (1) 1, 2, and 3 of the Company Reorganization Act or limitation of private property right

[4] Whether Article 221 (4) of the Company Reorganization Act is unconstitutional

[5] The case holding that an approval of a reorganization plan, which stipulates the condition to fully exempt the claims acquired or acquired after an application for commencement of reorganization claims and reorganization proceedings by insolvent management shareholders of the reorganization company from the total amount of claims for indemnity, does not violate the principle of equality under Article 229 of the Company Reorganization Act or exceeds the essential limitation

[1] Article 233(1) of the Company Reorganization Act provides the requirements for the approval of a reorganization plan. The purpose of Article 233(1) is to ensure that the contents of the reorganization plan are fair and equitable among interested parties, and at the same time, to achieve the reorganization and reorganization of the company which is the purpose of the reorganization system.

[2] The term "fairness and fairness" under Article 233 (1) of the Company Reorganization Act means that the conditions of the reorganization plan should be fairly and fairly differentiated among the right holders of different species in consideration of the order of rights under Article 228 (1) of the same Act, and the conditions should be equally equal among the right holders of the same kind as prescribed by Article 229 of the same Act, and the equality under Article 229 of the same Act refers not to the equality of formal meaning, but to the substantial equality that is not contrary to the concept of fairness and equity.

[3] The case holding that an approval of a reorganization plan with the content that all stocks of insolvent stockholders of a reorganization company are retired without compensation shall not be deemed as unconstitutional beyond the limit of violation of Article 233 (1) 1, 2, and 3 of the Company Reorganization Act or limitation of private property rights

[4] Where a cause for the commencement of reorganization proceedings has occurred due to an act bearing a heavy responsibility under Article 221 (4) of the Company Reorganization Act, although it has become an indefinite concept, it is inevitable in legislative technology, and can reasonably determine whether it is an act bearing a significant responsibility even with the sound common sense of the average social person. Accordingly, it does not seem that the elements are unconstitutional provisions due to the abstract and ambiguous interpretation.

[5] The case holding that an approval of a reorganization plan, which stipulates the condition that a reorganization claim or a claim for indemnity acquired or to be acquired after an application for commencement of reorganization proceedings by insolvent management shareholders of the reorganization company will be exempted in full, shall not violate the principle of equality under Article 229 of the Company Reorganization Act or exceed the essential limits of

[1] Article 233 (1) of the Company Reorganization Act / [2] Articles 228 (1), 229, and 233 (1) 2 of the Company Reorganization Act / [3] Article 23 (1) of the Constitution of the Republic of Korea; Articles 221 (4) and 233 (1) of the Company Reorganization Act / [4] Article 221 (4) of the Company Reorganization Act / [5] Article 229 of the Company Reorganization Act; Article 23 (1) of the Constitution of the Republic of Korea

[1] [2] Supreme Court Order 98Da11 dated August 28, 1998 (Gong1998Ha, 2493) / [1] Supreme Court Order 87Ma277 dated December 29, 1987 (Gong198, 398) / [2] Supreme Court Order 88Ma266 dated July 25, 198 (Gong1997Sang, 285)

Special Appellant (Law Firm Domini, Attorneys Doh-won et al., Counsel for the defendant-appellant)

Seoul High Court Order 99Ra4 dated July 15, 1999

The special appeal is dismissed.

The grounds of special appeal are examined.

On the first ground for appeal

Pursuant to Article 233(1) of the Company Reorganization Act, the court may decide on the approval of a reorganization plan only where the reorganization plan satisfies the requirements provided for in each subparagraph of paragraph (1) of this Article. The purpose of Article 233(1) of the Act is to ensure that the contents of the reorganization plan are fair and equitable, and at the same time, to achieve the reorganization and reorganization of the company which is the object of the reorganization system, since the priority in the reorganization plan is changed by a resolution of other creditors, and that the contents of the reorganization plan are changed to the right by a resolution of other creditors (see Supreme Court Order 98Da11, Aug. 28, 1998).

Article 221(4) of the Act provides that "where a cause for commencement of reorganization proceedings has occurred due to an act attributable to a director, a person corresponding thereto, or a manager, a decrease in capital shall be made in such a way as to retire not less than 2/3 of the shares held by the shareholders who exercise substantial influence over such act and their relatives, or by the shareholders in a special relationship as prescribed by the Supreme Court Regulations," and Article 5 of the Rules on the Settlement of Companies established by the Supreme Court (No. 731 of July 9, 199) provides that "for free retirement of not less than 2/3 of the shares of the controlling shareholders, etc. as prescribed by Article 221(4) of the Act, a controlling shareholder who is not a legal director, shall command the directors, etc. behind it and actually participate in the company business by giving instructions or exercising influence over the major affairs of the company, and the directors, etc. shall be objectively proved by the ruling of the court, the investigation results, investigation results, or the manager of the company."

In order to authorize a reorganization plan to retire all shares of stockholders, the reorganization plan shall conform to the above provisions of the Act, and it shall meet the requirements of Article 233 (1) of the Act such as fair and equitable. The "fair and equitable" in this context means that the conditions of the plan should be fairly and fairly differentiated among the right holders of different types, taking into account the ranking of the rights provided for in Article 228 (1) of the Act, and the conditions should be equal as prescribed by Article 229 of the Act. The equality referred to in Article 229 of the Act refers not only to formal equality but also to substantive equality that is not contrary to the concept of fairness and fairness (see, e.g., Supreme Court Order 98Da11, Aug. 28, 1998; Order 98Ma286, Jul. 26, 1989).

The court below, at the time of 193 at the time of the appellant’s resignation from office as representative director, appointed 3 South and North special appeal 1, etc. as representative director, the appellant practically involved in the appointment of representative director or internal personnel of the company as the director and the president, decided on the company’s business promotion and decision, and approved the company’s work order, etc. The appellant exercised influence over the company’s management, such as working at work, and ordered the company to provide excessive financial support to the international comprehensive construction, which is an affiliate, and the company’s financial insolvency by ordering the company, which is an affiliate, to provide large amount of financial support to the international comprehensive construction, etc., resulting in the decline in credit rating, and acknowledged that the company established a prefabricated-type housing factory at home and abroad with the company’s financial profitability in 192 at the time of the company’s business profitability and future, and that the company made an investment in this case’s insurance company’s new and outstanding investment during the period of 195 and its financial debt redemption.

Furthermore, the court below determined that the action of the reorganization court which approved the reorganization plan to be gratuitously retired of all of the appellant pursuant to Article 221(4) of the Act is not in conformity with the provisions of the Act, lack of fairness and fairness, or lack of fairness and fairness of the resolution, because it is objectively proved that the appellant who is a controlling shareholder is actually involved in the company's business by ordering the director, etc. to give instructions or exercising influence over the company's major business by exercising the direction or influence over the company's major business, and the director, etc. is objectively proved to have caused serious damage to the company due to the act of neglect of duty under the actual direction or influence of the controlling shareholder.

In accordance with the record, the reorganization program of this case provides that the shares of the general shareholders shall be combined and reduced to 1/10, and it shall be determined that the shares of the non-performing shareholders shall be retired in full, and the shares held by the non-performing shareholders of special resistance 1, non-special appeal 2, non-special appeal 3, non-special appeal 3, non-special appeal 4, and the special appeal 4 shall be taken into account. In addition, all other circumstances shown in the record shall be considered, and the recognition and decision of the court below are just in conformity with the above legal principles and legal requirements, and there is no violation of Article 233 (1) 1, 2, and 3 of the Act as alleged in the grounds for special appeal.

On the other hand, it is inevitable for the company to suffer disadvantages from retirement of all shares of the relevant shareholders in reorganization proceedings because it was caused by the act of significant liability of the shareholders with insolvency in this case, and it is also inevitable for the reorganization proceedings to make the company reorganization and reorganization by facilitating the third party acquisition through the exclusion of controlling shareholders' management. In addition, considering the suitability of the exercise of property rights as well as the public welfare of the exercise of property rights, it shall not be deemed as unconstitutional since it goes beyond the limit of the limitation of private property rights as to the exercise of property rights guaranteed by the Constitution

In addition, it does not seem that there is a provision unconstitutional due to an act with a heavy responsibility under Article 221(4) of the Act, where the cause of the commencement of reorganization proceedings has occurred due to an act with an indefinite concept, but it is inevitable in legislative technology, and can reasonably determine whether the act with a significant responsibility is an act with a sound common sense of the average of society, by which it is possible to reasonably determine whether it is an act with a significant responsibility.

In addition, the record reveals that the total amount of debts at the time of the commencement of reorganization proceedings exceeds the total amount of assets, and in such cases, the shareholders do not have voting rights (Article 129(3) of the Act), and the resolution of the reorganization plan was not fair on the ground that the special appellant, who is a shareholder, was unable to exercise voting rights.

All of the arguments of this issue in the special grounds for appeal shall not be accepted.

On the second ground for appeal

In light of the above legal principles as to equality under Article 229 of the Act, it does not constitute a violation of the principle of equality as mentioned above or a violation of the fundamental limitation of private property rights under the Constitution, by setting the conditions under which a special appellant, who is an insolvent management shareholder, has exercised considerable influence on the management of the reorganization company, and upon the end, has determined to exempt the whole amount of claims for indemnity acquired or acquired after the application for commencement of reorganization claims and reorganization proceedings, which led to an excessive situation in

We cannot accept the argument of the special grounds for appeal on this point.

Therefore, the special appeal is dismissed, and it is so decided as per Disposition by the assent of all participating Justices.

Justices Kim Jong-sik (Presiding Justice)