[1] In a case where a list of individual rehabilitation creditors has been submitted or other individual rehabilitation creditors have participated in the individual rehabilitation procedure, whether the interruption of prescription remains effective in the course of the individual rehabilitation procedure (affirmative in principle), and whether the decision to authorize the repayment plan in the individual rehabilitation procedure affects the interruption of prescription (negative)

[2] In a case where Gap limited liability company Eul filed an application for individual rehabilitation before the expiration of the extinctive prescription period, and submitted a list of creditors with Gap company as creditors, and Gap company sought to grant authorization of the repayment plan against Byung as joint and several guarantors, the case affirming the judgment below which held that Eul's debt is suspended at the time when Eul filed an application for individual rehabilitation and submitted a list of creditors with Gap company as creditors, and as long as Eul's individual rehabilitation procedure is not discontinued and continues to proceed without the discontinuation of Eul's individual rehabilitation procedure, the interruption of prescription against Eul is effective against Byung as guarantor Byung

[1] Where a list of individual rehabilitation creditors has been submitted in the individual rehabilitation procedure or where other individual rehabilitation creditors participate in the individual rehabilitation procedure, the interruption of prescription is effective (Article 32 subparag. 3 and Article 589(2) of the Debtor Rehabilitation and Bankruptcy Act), and the interruption of prescription remains effective while the individual rehabilitation procedure proceeds, barring special circumstances. Even if a decision to authorize the repayment plan in the individual rehabilitation procedure is rendered, any change in rights according to the repayment plan does not accrue until the immunity decision becomes final and conclusive (Article 615(1) of the Debtor Rehabilitation and Bankruptcy Act). Therefore, the decision to authorize the repayment plan alone does not affect the interruption of prescription.

[2] In a case where Gap limited liability company Eul filed an application for individual rehabilitation before the expiration of the extinctive prescription period, submitted a list of creditors with Gap company as creditors, and then sought to authorize the repayment plan against Byung as joint and several guarantors, the case affirming the judgment below which held that Eul's debt is suspended at the time when Eul filed an application for individual rehabilitation and submitted a list of creditors with Gap company as creditors, and as long as Eul's individual rehabilitation procedure is not discontinued and is still in progress, the interruption of prescription against Eul is effective against Byung as guarantor Byung

[1] Article 32 subparag. 3, Articles 589(2) and 615(1) of the Debtor Rehabilitation and Bankruptcy Act / [2] Article 32 subparag. 3, 589(2), and 615(1) of the Debtor Rehabilitation and Bankruptcy Act; Article 440 of the Civil Act

[1] Supreme Court Decision 2013Da42878 Decided September 12, 2013 (Gong2013Ha, 1775)

Maritime Asset Management Loans Limited Liability Company

Defendant

Seoul Eastern District Court Decision 2019Na22052 decided May 10, 2019

The appeal is dismissed. The costs of appeal are assessed against the defendant.

The grounds of appeal are examined.

1. Where a list of individual rehabilitation creditors has been submitted in the individual rehabilitation procedure or where other individual rehabilitation creditors participate in the individual rehabilitation procedure, the interruption of prescription is effective (Article 32 Subparag. 3 and Article 589(2) of the Debtor Rehabilitation and Bankruptcy Act), and the interruption of prescription is maintained as is while the individual rehabilitation procedure is in progress, barring any special circumstance (see Supreme Court Decision 2013Da42878, Sept. 12, 2013). Even if a decision to authorize the repayment plan in the individual rehabilitation procedure is rendered, any change in rights according to the repayment plan does not arise until the immunity decision becomes final and conclusive (Article 615(1) of the Debtor Rehabilitation and Bankruptcy Act), and the decision to authorize the repayment plan alone does not affect the interruption of prescription.

On the other hand, the interruption of prescription against the principal obligor is effective as against the surety (Article 440 of the Civil Code).

2. The lower court rejected the Defendant’s assertion of extinctive prescription for the following reasons.

On January 25, 2008, before five years have elapsed since the extinctive prescription period of the non-party, the principal debtor, filed a list of creditors with the plaintiff as the creditor, and received a decision to authorize the repayment plan on July 15, 2008, and the procedure is in progress by the date of closing of argument in the lower court. The non-party’s debt was suspended on January 25, 2008, and as long as the non-party’s individual rehabilitation procedure is in progress without discontinuing the non-party’s individual rehabilitation procedure, the extinctive prescription period shall remain in effect, and the interruption of the prescription period against the non-party shall also be effective against

3. Examining the reasoning of the lower judgment in light of the aforementioned legal doctrine and the evidence duly admitted, the lower court’s determination is justifiable.

The precedents cited in the grounds of appeal are related to the former Company Reorganization Act (repealed by Act No. 7428 of March 31, 2005, Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act (Act No. 7428 of March 31, 2005, hereinafter referred to as the "former Company Reorganization Act") or the former Composition Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act (Act No. 7428 of March 31, 2005, hereinafter referred to as the "former Composition Act"). In the company reorganization procedure, when a decision to authorize a reorganization plan is made, the alteration of rights or exemption pursuant to the reorganization plan becomes effective (Articles 241 and 242(1) of the former Company Reorganization Act), and the alteration of rights pursuant to the composition conditions becomes effective when a decision to authorize a composition becomes final and conclusive (Article 58 of the former Composition Act). Accordingly, the precedents cited in the grounds of appeal are different from the decision to authorize a repayment plan under the individual rehabilitation procedure.

4. The Defendant’s appeal is without merit, and the costs of appeal are assessed against the losing party. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Lee Dong-won (Presiding Justice)