[1] The validity of the provision of the reorganization program which plans the issuance of new stocks by the third party allocation method within the limit of authorized capital as stipulated in the articles of incorporation (effective)

[2] In a case where new stocks are issued pursuant to the provisions of the reorganization program under which a third party allotment method is planned within the limit of authorized capital as stipulated in the articles of incorporation, whether the modification procedure of the reorganization program should be separately followed (negative)

[3] In a case where a company is liquidated due to the issuance of new shares by a third party method planned under a reorganization plan, whether the issuance of new shares is unlawful in a case where the pre-existing shareholder's value less than the liquidation value that can be distributed to the shareholders is attributed to the shareholders (negative in principle)

[4] Whether it constitutes a special ground for appeal as a matter of violation of the Constitution that affected the trial to dispute the need for issuance of new shares by the court of reorganization regarding the decision of permission for issuance of new shares (negative)

[1] In light of Article 22(3) of the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005) and the legislative intent of Article 418(2) of the Commercial Act, the provisions of the reorganization plan which plan issuance of new stocks by a third party with the permission of the reorganization court within the limit of authorized capital stipulated in the articles of incorporation cannot be deemed null and void.

[2] In case where the receiver of the reorganization company issues new shares with the permission of the reorganization court for the purpose of attracting new funds pursuant to the provisions of the reorganization plan which plans the issuance of new shares by a third party within the authorized capital limit stipulated in the articles of incorporation, the existing shareholders of the reorganization company merely realizes the disadvantage that the existing shareholders of the reorganization company would accept by the reorganization plan, and barring special circumstances, it is not necessary to go through the alteration procedure of the reorganization plan for the issuance of new shares by a third party.

[3] Even if the reorganization company is liquidated without issuance of new shares by a third-party allotment method due to the dilution of shares of the existing shareholders, the amount less than the liquidation value that the existing shareholders can receive in the event that the reorganization company is liquidated without issuance of new shares by a third-party allotment method under the reorganization plan would result in the result that the previous shareholders would belong to the existing shareholders, as long as the reorganization company's reorganization plan for continuing its business without choice of liquidation has become final and conclusive, the administrator of the reorganization company may determine the amount of new shares according to ordinary methods without being limited by the liquidation value on the account books at the time of issuance of new shares, barring special circumstances such as that the issue value of new shares issued after obtaining permission from the court of reorganization is remarkably unfair, it cannot be deemed that there is any violation of law

[4] An argument that there is no need for issuance of new shares by the court of reorganization regarding the decision of permission for issuance of new shares is a dispute over the fact-finding by the court of reorganization as to the necessity of issuance of new shares and the legitimacy of the judgment based thereon, and in the end, the argument that the decision violated laws, barring any special circumstance, there is a violation of the Constitution that affects the judgment.

[1] Articles 211(2) (see current Article 193(2)5 of the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005), 222(3) (see current Article 206(3) of the Debtor Rehabilitation and Bankruptcy Act), Article 418(2) of the Commercial Act / [2] Article 211(2) of the former Company Reorganization Act (repealed by Article 248 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428 of March 31, 2005), Article 270 (2) of the former Company Reorganization Act (see current Article 282 of the Debtor Rehabilitation and Bankruptcy Act), Article 418(2) of the Commercial Act / [3] Article 211(2) of the former Company Reorganization Act (see current Article 25(2) of the Debtor Rehabilitation and Bankruptcy Act, Article 28(2) of the Debtor Rehabilitation and Bankruptcy Act) of the Act (see current Article 319(2) of the Debtor Rehabilitation and Bankruptcy Act) of the Act

[4] Supreme Court Order 2007Ga18 dated January 24, 2008 (Gong2008Sang, 298)

Special Appellant 1 Co., Ltd. and 14 others (Attorney Hong Ho-hee, Counsel for the defendant-appellant)

The administrator of the Chungcheongnam-gu corporation, Chungcheongnam-gu et al. (Law Firm, Kim & Lee LLC, Attorneys Ba-han et al., Counsel for the defendant-appellant)

Daejeon District Court Order 2002No. 1 dated July 3, 2007 (Permission for allocation to a third party and conversion into equity shares)

All special appeals are dismissed.

The grounds of special appeal are examined.

1. As to the violation of Articles 23(1) and 37(2) of the Constitution on the grounds that the provisions on the issuance of new stocks of this case are invalid, the procedure for amending the reorganization plan of this case is omitted, the shareholders' fundamental rights are infringed, and the principle of guaranteeing liquidation value is violated, etc.

A. Article 22(3) of the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Act on the Establishment of New Shares, Act No. 7428 of March 31, 2005) provides that “type and number of new shares”, “where any person newly makes an investment in kind, property which is the object of such investment, price and the kind and number of shares to be given therefor”, and “the issue price and due date of new shares” shall be deemed to provide for the matters to be determined by the existing reorganization plan where the reorganization company actually issues new shares pursuant to the reorganization plan. The purpose of the above provision is to promote a merger of the approved reorganization company for business normalization, and the administrator shall obtain the permission of the court for the improvement of the existing reorganization plan within the scope of shares authorized by the Commercial Act, by taking into account such provisions in the Articles of incorporation, to the maximum extent necessary for the improvement of the existing reorganization plan and the number of new shares to be issued by the new reorganization company, such as the number of new shares to the extent necessary for the improvement of the existing reorganization plan.”

Furthermore, in the event that new shares are issued with the permission of the reorganization court within the scope of authorized capital for the purpose of attracting new shares pursuant to the above provision of the reorganization plan which plans the issuance of new shares by the third party allotment method, barring special circumstances, it is merely a concrete reality that the disadvantages that the existing shareholders of the reorganization company are expected to accept by the reorganization plan, and barring any special circumstance, it is unnecessary to go through the alteration procedure of the reorganization plan for the issuance of new shares by the third party allotment method. Furthermore, even if the reorganization company is liquidated without the issuance of new shares by the third party allotment method planned in the reorganization plan, if the existing shareholders are liquidated without the issuance of new shares by the third party allotment method planned in the reorganization plan, the liquidation value which the existing shareholders are entitled to receive is less than the liquidation value which the reorganization company will continue to conduct without selecting the liquidation, so long as the reorganization company's issuance of new shares becomes final and conclusive, the administrator of the reorganization company may determine the value of new shares by the ordinary method without being restricted by the liquidation value at the time of the issuance of new shares.

B. According to the records, the "paragraph 3 of new shares issued by the 0-month reorganization company" provides that "1. The company may issue new shares in installments over several occasions with the permission of the court from the 0th day of the approval of the reorganization program to the 0-month reorganization period." 2. The new shares issued by the 0-month reorganization company's 7th day after the 0-month reorganization period's 4th day after the 0-month reorganization period's 7th day after the 0-month reorganization period's 5th day after the 0-month reorganization period's 5th day after the 0-month reorganization period's 4th day after the 0-month reorganization period's 7th day after the 0-month reorganization period's 5th day after the 0-month reorganization period's 5th day after the 0-month reorganization period's 40-month reorganization period's 5th day after the 20-month reorganization period's 50-month reorganization period's 4000-month period'

C. According to the above facts, the administrator of the reorganization company applied for issuance of new shares within the limit of authorized capital stipulated in the articles of incorporation of the reorganization company for the purpose of attracting new funds pursuant to the provision on the issuance of new shares by a third party of the reorganization plan of this case, which was prepared for the normalization of the management through a merger of companies, and the reorganization court decided to permit the issuance of new shares, and there are no special circumstances to deem that the issuance price of the new shares is not invalid because the issuance price of the new shares is remarkably unfair. Thus, in light of the above legal principles, the order of the court below is not erroneous in violating Articles 23(1) and 37(2) of the Constitution by infringing on the fundamental rights of shareholders and violating the principle on the guarantee of liquidation value without undergoing the alteration of the reorganization plan pursuant to the invalid provision on the special grounds for raising special objections. This part of the grounds for special appeal is rejected.

The Supreme Court Order 2004Ga84 dated June 15, 2005 cited in the special grounds for appeal is different from the case, and it is inappropriate to invoke the case in this case.

2. As to the violation of Articles 37(2) and 23(1) of the Constitution on the grounds of lack of necessity to issue new shares of this case, protection of trust, violation of the principle of trust and good faith, etc.

A. Where an administrator of a reorganization company applies for the issuance of new shares within the authorized capital limit as stipulated by the articles of incorporation for the normalization of the company through a merger with a third party, whether it is permitted by the reorganization court shall examine the financial structure and business situation of the reorganization company in comparison with the reorganization plan, the balance of funds, the smooth repayment possibility of the liquidation obligation, etc. The liquidation court shall compare and determine the necessity of the reorganization company's financing and new investment, the current economic situation of domestic and foreign markets, the degree of disadvantage to the interested parties arising from the issuance of new shares by taking into account and taking into account the needs of the reorganization company's financing and new investment, the current situation of the domestic and foreign markets, the degree of disadvantage to the interested parties arising from the issuance of new shares, etc. In specific cases, the determination of whether the reorganization company has the necessity to issue new shares pursuant to the reorganization plan shall be deemed to be a matter of finding and assessing the fact-finding by the reorganization court, and therefore, it cannot be viewed that there is no need for the issuance of new shares for the permission decision by the reorganization court to the above.

According to the records, the actual inspection and liquidation value report on the reorganization company prepared and submitted by Samsung Accounting Corporation to the liquidation court on July 28, 2006 can be seen as evaluating the asset value of 2,73.8 billion won at the time of liquidation of the liquidation company as of March 31, 2006 to the amount of 203.8 billion won. However, as seen above, in the situation where the accounting corporation proposed the promotion of corporate merger as one of the measures to improve the low business performance and poor production system of the reorganization company and normalize the company, the liquidation court may not find out that it is desirable to set new funds by taking into account the social and economic interests obtained by the reorganization company due to large-scale capital increase by the third party allotment method and disadvantage to the interested parties, such as existing shareholders, as long as possible, by raising the cost of new stocks issued to the third party pursuant to the provision on the issuance of new stocks. In light of the above legal principles, the court below's assertion that there is no need to set new stocks issued by the court below to acknowledge new stocks in violation of the law.

B. A special appellant trusted that he/she can obtain management rights of the appellant from the receiver and the reorganization court, and acquired the shares of the reorganization company through the first and second public tender offer. The special appellant's claim for the reason that the administrator of the reorganization company promoted a large-scale issuance of new shares to a third party and violated the principle of trust protection and good faith in relation to the special appellant merely because it is erroneous in the judgment of the court below that the special appellant violated the principle of trust protection and good faith in relation to the special appellant, and thus, it cannot be accepted.

3. On the violation of the principle of equality

The order of the court below is merely a decision to permit the issuance of new shares by a third party in accordance with the provisions of the reorganization program of this case, and there was no decision to determine how to repay to the reorganization creditors and security holders with the acquisition price of new shares paid through the issuance of new shares as financial resources. Thus, the argument of the grounds for special appeal disputing the fairness and fairness of the repayment terms cannot be accepted.

4. Conclusion

Therefore, all special appeals are dismissed. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Park Si-hwan (Presiding Justice)