[1] Whether an immediate appeal filed by a public-interest creditor against a decision of rejection of the reorganization program modification plan is legitimate

[2] Methods of exercising voting rights in the reorganization program

[3] Whether the person who consented to the previous reorganization plan is deemed to have consented to the alteration plan if he/she or his/her agent does not actually attend the meeting of interested persons for the resolution of the alteration plan and express his/her intention of disapproval (affirmative)

[4] The case affirming the judgment of the court below which held that the reorganization creditor who agreed to the previous reorganization plan consented to the modified plan pursuant to the proviso of Article 270 (2) of the former Company Reorganization Act even if he expressed his intention of disapproval by sending it in writing outside the meeting of interested persons, in case where the reorganization creditor did not appear at the meeting of interested persons for the resolution of the modified reorganization plan by legitimate service

[1] An immediate appeal may be filed against the decision of the part of the reorganization plan only by the person who has a legal interest, that is, the person whose own interest is infringed upon by the entry into force of the reorganization plan. Thus, unless the contents of the decision are agreed upon by the reorganization company, an immediate appeal filed by a public interest creditor against the decision of the part of the reorganization plan is unlawful, in principle, unless the contents of the decision are stipulated by the reorganization plan.

[2] The resolution under Article 204 of the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428, Mar. 31, 2005) which has the characteristic as a collective declaration of intent to the whole reorganization program is interpreted as requiring that the resolution should, in principle, be made by attending the meeting of interested persons or their agents practically and directly express their intent to consent or disapproval. In the company reorganization procedure where many interested persons exist, the transparency, clarity, and swiftness of the procedure are strongly required compared to the general litigation procedure. Among them, the resolution on the reorganization program is required to further enhance the stability and uniformity of the procedure. Thus, the exercise of voting rights, which is not in accordance with the procedure or method stipulated under the former Company Reorganization Act, is not allowed.

[3] Even in the procedure for modifying a reorganization plan, the exercise of voting rights by a method other than that prescribed by the former Company Reorganization Act (repealed by Article 2 of the Addenda to the Debtor Rehabilitation and Bankruptcy Act, Act No. 7428, Mar. 31, 2005) is not permitted. Thus, a person who has consented to the previous plan shall be interpreted as not being able to avoid the application of the proviso of Article 270 (2) of the former Company Reorganization Act unless he/she or his/her agent actually attends the meeting of interested persons to resolve the modified plan and expresses his/her intention of disapproval. The contents of the modified plan are contrary to his/her intention, or there is a circumstance that individually expresses his/her intention in a way that is not scheduled under the former Company Reorganization Act, or the custodian or the reorganization court knew or could have known such circumstances.

[4] The case affirming the order of the court below which held that the reorganization creditor who agreed to the previous reorganization plan consented to the modified plan pursuant to the proviso of Article 270 (2) 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) even if he expressed his intention of disapproval by sending it in writing outside the meeting of the persons concerned, in case where the reorganization creditor did not appear at the meeting of the persons concerned for the purpose of resolution on the modified plan, and by sending

[1] Articles 11 (see current Article 13 of the Debtor Rehabilitation and Bankruptcy Act), 216 (see current Article 199 of the Debtor Rehabilitation and Bankruptcy Act), 237 (1) (see current Article 247 (1) of the Debtor Rehabilitation and Bankruptcy Act), 240 (see current Article 250 of the Debtor Rehabilitation and Bankruptcy Act), and 270 (3) (see current Article 282 (3) of the Debtor Rehabilitation and Bankruptcy Act) of the former Company Reorganization Act (Amended by Act No. 7428, Mar. 31, 2005); Article 270 (2) of the former Debtor Rehabilitation and Bankruptcy Act (see current Article 30 of the Debtor Rehabilitation and Bankruptcy Act); Article 270 (3) of the Debtor Rehabilitation and Bankruptcy Act (see current Article 40 of the Debtor Rehabilitation and Bankruptcy Act); Article 273 of the former Company Reorganization Act (Amended by Act No. 7428, Mar. 31, 2005; Act No. 2014 of the Debtor Rehabilitation and Bankruptcy Act)

[1] Supreme Court Order 90Nu2833 delivered on March 12, 1991 (Gong1991, 1195) Supreme Court Order 2005Da60 Delivered on January 20, 2006 (Gong2006Sang, 386)

Masung Unemployment Co., Ltd. and two others (Attorneys Cho Jae-won et al., Counsel for the plaintiff-appellant)

Seoul High Court Order 2005Ra105 dated May 23, 2005

All special appeals are dismissed.

1. Determination on a special appeal by a mining unemployment company

An immediate appeal may be filed against the decision of the part of the reorganization program, namely, only the person whose interest is infringed upon by the validity of the reorganization program. Unless the content of the decision is agreed with the reorganization company, a public interest creditor is not effective by the reorganization program (see, e.g., Supreme Court Decision 90Nu283, Mar. 12, 191). Thus, an immediate appeal filed by a public interest creditor against the decision of rejection of the reorganization program is unlawful, in principle, as a matter of principle, by a public interest creditor.

The court below classified the above special appellant's claims into "public-interest claims to be succeeded to by the acquirer" in the modified plan of this case and, even though the reorganization company has the provision that "the above amount shall be repaid by agreement between the acquirer and the above special appellant", it shall not be bound by the above special appellant's modification clause unless the reorganization company determines the modification of rights in agreement with the above special appellant. Thus, even if the special appellant's claims for public-interest in accordance with the above special appellant's claim exist, the above special appellant dismissed the immediate appeal of this case on the ground that he does not have any factual or economic interest as to the approval decision of this case, regardless of the existence of the above special appellant's claims, is justified in accordance with the above legal principles, and there is no error of violation of the Constitution and Article 49 (1) of the Civil Procedure Act, which affected the judgment,

2. Determination on the special appeal by Plaintiff 2 and Minejin Unemployment Co., Ltd.

A. In light of the fact that the meeting of interested parties for the examination of reorganization programs conducted jointly with the meeting of interested parties for the resolution of the general meeting of interested parties (Article 168 of the Company Reorganization Act), the meeting of interested parties for the examination of the reorganization programs is premised on discussions, acquisition, and negotiations between interested parties. As a result, unless otherwise provided in the Act, the reorganization programs can be amended or amended for a long time until the meeting of interested parties for the examination is completed (see Articles 196 and 197 of the Company Reorganization Act). Therefore, it is unreasonable to presume that the voting right holders voluntarily expressed the reorganization programs delivered prior to the meeting of interested parties by way of written dispatch, etc., and in response to the fact that it is unreasonable that the resolution of Article 204 of the Company Reorganization Act, which has the character as a collective declaration of intention to the whole reorganization programs, requires that the resolution of the meeting of interested parties should be made by directly expressing their consent or disapproval by attending the meeting of interested parties. In the company reorganization programs where many interested parties exist, the transparency, probability and promptness of the procedure is required more than the exercise of voting rights.

B. Meanwhile, Article 270(2) of the Company Reorganization Act provides that “Where an application for change of a reorganization plan is filed to a company which is deemed to have an unfavorable effect on the reorganization creditors, etc., the provisions of Article 204 of the Company Reorganization Act concerning procedures, etc. shall apply mutatis mutandis to the case where the reorganization plan is submitted, and Article 270(2) provides that “a person who has consented to the previous plan and fails to appear at the meeting of interested persons to resolve the amendment plan shall be deemed to have consented to the amendment plan (hereinafter “instant

C. In light of the above legal principles, the exercise of voting rights by means other than those stipulated by the Company Reorganization Act cannot be permitted even in the procedure for amending the reorganization plan. Thus, a person who has agreed to the previous plan shall not be interpreted differently on the ground that there are such grounds as asserted by the special appellant, including the following: (a) it is interpreted that the application of the deemed provisions in this case cannot be avoided in addition to the manner in which the principal or his agent actually appeared and expresses his intention of disapproval; (b) the content of the modified plan is contrary to his intention; (c) it is not against the company Reorganization Act; or (d) the administrator or the reorganization court knew or could have known such circumstances.

D. Meanwhile, in light of the following: (a) the modification of the reorganization plan is recognized only when the circumstances that would have been naturally prepared if it would have been anticipated at the time of approving the original plan; (b) the court determines whether to grant authorization for the modification plan, ex officio examination is made as to whether the contents of the modification plan meet various requirements required by the Company Reorganization Act, such as fair and equitable principles and possibility of implementation; (c) in the case of the holder of the right at disadvantage, a procedural right is guaranteed to the creditor who actually expresses his/her consent, as well as the creditor who is deemed to have been absent at the meeting of interested persons for the resolution of the modification plan, and the creditor who is deemed to have consented by the absence of the meeting of interested persons for the resolution of the modification plan is entitled to the procedural right to resolve the disadvantage by filing an appeal against the decision; and (d) on behalf of a person who is unable to directly attend the meeting of interested persons due to unavoidable reasons, it cannot be deemed that the provision of this case is unreasonable to interpret that the reorganization creditor or reorganization creditor who expressed his/her consent in a manner other than the meeting of interested persons.

E. According to the records, the above special appellants, who are reorganization creditors, agreed to the reorganization plan prior to the amendment plan of this case, and did not appear after being duly served at the meeting of interested parties of this case. Accordingly, according to the deemed provision of this case, the above special appellants were deemed to consent to the amendment plan of this case, and thus, the decision of the court below to affirm the approval order of this case which was made on the premise that the amendment plan of this case was adopted, is just in accordance with the above legal principles, and there is no violation of the Constitution and Article 49(1)

3. 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)