[1] In a case where a contract for corporate improvement is concluded under a prior agreement on private reorganization between an enterprise after insolvency and a principal creditor bank, whether the effect of the change of right such as the reorganization of claims, etc., upon such agreement, may also affect creditor financial institutions that participated in the resolution of the creditor financial council and object to the corporate improvement work as a member of the creditor financial council (affirmative), and the validity of the contract for the reorganization of claims concluded separately with the company concerned (effective)

[2] Whether a financial institution, which was not a member of the creditor financial institution council prior to the enforcement of the former Corporate Restructuring Promotion Act, concluded individually with the company in question, is re-amended according to the resolution of the council newly organized after the enforcement of the Act (affirmative with qualification)

[3] The case holding that the installment repayment agreement concluded individually with the company by a financial institution which was not a member of the creditor financial institution council prior to the enforcement of the former Corporate Restructuring Promotion Act does not fall under the "resolution made by the principal creditor bank or the council prior to the enforcement of the Corporate Restructuring Promotion Act" under Article 3 of the Addenda of the same Act, such as postponement of exercising the claim, conclusion of agreement to implement

[1] Where insolvency occurs between financial institutions and the debtor company, the court shall start corporate improvement work under the lead of the creditor bank instead of entering the legal rehabilitation procedure in which the debtor company is involved, and the creditor financial institutions holding not less than 3/4 of the credit amount with the consent of the creditor financial institutions holding not less than 3/4 of the credit amount. Furthermore, when the principal creditor bank as an agent of other creditor financial institutions belonging to the creditor financial institutions and entered into a prior agreement on private reorganization (corporate restructuring agreement) of a kind of private reorganization in which the principal creditor bank entered into a corporate improvement work agreement to implement the final and conclusive resolution as mentioned above with the company as an agent of other creditor financial institutions belonging to the creditor financial institutions, the principal creditor bank shall convene a council of the creditor financial institutions related to the debtor company and make a resolution on the corporate improvement work, and then the principal creditor bank and the corporation enter into the corporate improvement work agreement to carry out such resolution, regardless of whether the agreement was effective as a member of the creditor bank's resolution, it shall naturally affect the creditor financial institutions' objection to the corporate improvement work agreement or amendment of the corporation.

[2] Even if a financial institution, which was not a member of the creditor financial institution council prior to the enforcement of the former Corporate Restructuring Promotion Act, concluded a contract on the debt readjustment individually with the relevant company, it shall decide to apply the resolution matters concerning the debt readjustment by the previous council to the newly organized financial institution's claims after the enforcement of the said Act, and in case where the financial institution objects thereto but it did not exercise the right to demand purchase as an opposing creditor, the claims of the newly modified financial institution under the individual debt readjustment contract shall be modified again according to the contents of the resolution.

[3] In a case where a financial institution, which was not a member of the creditor financial institution council prior to the enforcement of the former Corporate Restructuring Promotion Act, concluded a installment repayment agreement with the relevant company, the case holding that the said agreement does not constitute "a resolution made by the principal creditor bank or the council prior to the enforcement of the Corporate Restructuring Promotion Act, suspension of the exercise of claims, conclusion of an agreement for the implementation of the management normalization plan, adjustment of claims, and other acts," even if the business management council approved it at the level of confirmation of the act related to the execution of funds during the business activities of the relevant company, even though it was merely an individual agreement concluded with the relevant company outside the framework of the corporate restructuring work executed by the council centering on the principal creditor bank

[1] Articles 105, 731, and 732 of the Civil Act / [2] Articles 2, 27, and 29 (1) of the former Corporate Restructuring Promotion Act / [3] Article 3 of the Addenda of the former Corporate Restructuring Promotion Act (effective August 14, 2001)

1. The term “the term “the term” means “the term” means “the term “the term” means “the term” means “the term.

Treatment Telecommunications Co., Ltd. (Law Firm Mad Co., Ltd., Counsel for the plaintiff-appellant-appellee)

Seoul High Court Decision 2003Na26381 delivered on May 11, 2004

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

The grounds of appeal are examined (to the extent of supplement in case of supplemental appellate briefs not timely filed).

1. As to the grounds of appeal Nos. 1 and 2

In the event of insolvency between financial institutions, when the debtor company and the principal creditor bank enter the legal rehabilitation procedure in which the court is involved, and instead of entering the rehabilitation procedure, the company improvement project is initiated under the lead of the principal creditor bank, and the creditor financial institutions holding not less than 3/4 of the credit amount with the consent of the creditor financial institutions holding not less than 3/4 of the credit amount, and the principal creditor bank, as the representative of the creditor financial institutions belonging to the council, has made a prior agreement on a kind of private reorganization (hereinafter referred to as the "corporate restructuring agreement") in which the principal creditor bank entered into a corporate improvement project to implement the final and conclusive resolution between the principal creditor bank and the principal creditor bank. If the principal creditor bank, as the principal creditor bank, has concluded a prior agreement on the corporate improvement project by convening a council of creditor financial institutions related to the debtor company as stipulated in the prior agreement, and then the agreement on the corporate improvement project has been concluded for the execution of the said resolution between the principal creditor bank and the principal creditor bank, regardless of whether the agreement or the amendment of rights to the agreement would naturally affect the corporate improvement project execution agreement.

However, the former Corporate Restructuring Promotion Act (as of December 31, 2005, pursuant to Article 2(1) of its Addenda), as well as mutual savings banks under the Mutual Savings Banks Act, automatically recognizes the status of members of the Council to many financial institutions that were not members of the previous Corporate Restructuring Convention (Article 2), and as the previous autonomous agreement remains in existence, creditor financial institutions bear the obligation to perform matters resolved with the consent of creditor financial institutions holding not less than 3/4 of the total amount of credit extension by creditor financial institutions (Article 27(1) and (2)). If a creditor financial institution fails to file a claim for purchase of claims within a fixed period of time, it shall be deemed that it consented to the resolution of the relevant Council (Article 29(1)). Although the former Corporate Restructuring Promotion Act concluded a contract on the reorganization of claims individually with a financial institution which was not a member of the Council prior to the enforcement of the former Corporate Restructuring Promotion Act, it shall be deemed that the previous bonds newly participated by the Council after the implementation of the former Corporate Restructuring Promotion Act are subject to a resolution on the reorganization of claims.

Examining the reasoning of the judgment below in light of the above legal principles and the records, it is not somewhat inappropriate for the expression of the judgment below as to the majority opinion that the installment repayment agreement of this case lost its validity by the resolution of the council of this case. However, the validity of the resolution of the council of this case which had existed after the enforcement of the former Corporate Restructuring Promotion Act shall be effective to the plaintiff. Therefore, the repayment date of the plaintiff's claim shall be deferred from the previous date to December 31, 2004 as well as the claims of other financial institutions belonging to the council which continued to have a status as a member. There is no violation of the rules of evidence or misapprehension of the legal principles that affected

In addition, in light of the progress of the business restructuring of this case and the progress of the conclusion of the installment repayment agreement of this case, the installment repayment agreement of this case is merely an individual agreement concluded with the defendant outside the framework of the business structural improvement that was promoted by the council centering around the principal creditor bank. Thus, even if the representative management group approved the act related to the execution of the fund during the defendant's business activities, it cannot be deemed as an "resolution made by the principal creditor bank or the council prior to the enforcement of the corporate restructuring promotion, deferment of the exercise of claims, conclusion of agreements for the implementation of the business normalization plan, adjustment of claims, and other acts" under Article 3 of the Addenda of the former Corporate Restructuring Promotion Act, and therefore, it shall not be deemed as effective prior to the resolution of the council of this case on the ground of Article 3 of the Addenda. Examining the reasoning of the judgment below in light of the records, the judgment of the court below is justifiable, and there is no

2. Regarding ground of appeal No. 3

In light of the records, even if the time when the installment repayment agreement in this case was approved after the enactment of the former Corporate Restructuring Promotion Act and the time prior to the enforcement of the same Act, the circumstance that the same Act will be implemented immediately is not only the defendant, but also the plaintiff, and it cannot be accepted in light of the concept of justice by delaying the exercise of claims identical to other creditor financial institutions. Thus, it is difficult to view that the defendant's assertion that the period of repayment should be deferred in accordance with the resolution of the Council in this case held after the enforcement of the former Corporate Restructuring Promotion Act as the exercise of rights contrary to the principle of good faith. The argument in the grounds of appeal on this part is unacceptable.

3. Conclusion

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.

Justices Kim Young-ran (Presiding Justice)