In cases where a creditor has reported a reorganization claim, whether a person who has made a subrogation on behalf of a creditor and acquired a claim for indemnity may make a subsequent completion report pursuant to Article 127 (2) of the Company Reorganization Act or a report of change pursuant to Article 127 (4) of the same Act regarding the difference between the amount of subrogation and the reported amount

In full view of the contents of Articles 110(1) and (2), 118(2), 127(2) and (4), and 128(1) of the Company Reorganization Act, and the purpose of the corporate reorganization system, a person holding future right to indemnity against the reorganization company may exercise rights as a reorganization creditor by participating in reorganization proceedings regarding the total amount of indemnity claim. However, in cases where a creditor files a report as a reorganization claim concerning the whole amount of claim at the time of commencement of reorganization proceedings, a person holding future right to indemnity may not exercise rights as a reorganization creditor. In such cases where a creditor makes a substitute payment to a creditor after the creditor files a report as a reorganization claim, the person holding a future right to indemnity may not exercise rights as a reorganization creditor. Where a creditor makes a substitute payment after the creditor files a report as a reorganization claim, the reorganization claim shall be transferred by the creditor to the person holding the right to indemnity maintaining its identity and the amount reported by subrogation after the expiration of the reporting period, even if a person holding a right to indemnity has not reported the amount of indemnity by subrogation after the expiration of the reporting period.

Articles 110(1) and (2), 118(2), 127(2) and (4), and 128(1) of the Company Reorganization Act

Seoul Guarantee Insurance Co., Ltd. (Law Firm Vindication, Attorneys Gyeong-soo et al., Counsel for the defendant-appellant)

Defendant (Attorney Lee Jae-hwan, Counsel for the defendant-appellant)

Seoul High Court Decision 2000Na50253 delivered on January 10, 2001

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

In full view of the contents of Articles 110(1) and (2), 118(2), 127(2) and (4), and 128(1) of the Company Reorganization Act, and the purpose of the corporate reorganization system, a person holding future right to indemnity against the reorganization company may exercise rights as a reorganization creditor by participating in reorganization proceedings regarding the total amount of indemnity claim. However, where a creditor reports a reorganization claim to a reorganization creditor as at the time of commencement of reorganization proceedings, a person holding future right to indemnity may not exercise rights as a reorganization creditor. If a creditor makes a substitute payment to a creditor after the creditor reports a reorganization claim to a creditor, the person holding a future right to indemnity may not exercise his/her rights as a reorganization creditor. If a creditor makes a substitute payment to the creditor after the expiration of the reporting period, the reorganization claim shall be transferred by the creditor to the person holding the right to indemnity in proportion to his/her repayment while maintaining its identity. Even if the subrogation claim has occurred by subrogation after the reporting period, a person holding a right to indemnity cannot report the difference between the reported amount by subrogation and the creditor.

In light of the above legal principles and the records, the court below is just in holding that the portion of 125,908,720 won, which is the creditor of the lawsuit of this case, is transferred to the plaintiff with the identity of the plaintiff as a result of the plaintiff's subrogation. Thus, there is no interest in confirmation, and thus, the plaintiff cannot exercise his right to indemnity against the remainder of 101,214,850 won, which is the difference between the subrogated amount and the reported amount of reorganization claim, and there is no error in the misapprehension of legal principles as to Articles 110 and 127 of the Company Reorganization Act, as alleged in the ground of appeal.

Therefore, the appeal is dismissed 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 Son Ji-yol (Presiding Justice)