209 Ghana 23975 Objection against the final judgment on the inspection of bankruptcy claims

NewA (46 years old, South)

Attorney Hwang Tae-young, Counsel for the defendant-appellant

Attorney Park Jong-ho, Counsel for the plaintiff-appellant

(66 years old, South)

Attorney Yoon Chang-chul, Counsel for the plaintiff-appellant-appellant

October 26, 2009

November 16, 2009

1. The final claim inspection judgment of Busan District Court on January 30, 2009 2008Habae-5 Dated January 30, 2009 shall be amended as follows:

The defendant's bankruptcy claims against the defendant's shipping company are 10,662,768 won.

2. The plaintiff's remaining claims are dismissed.

3. 3/10 of the costs of lawsuit shall be borne by the Plaintiff, and the remainder by the Defendant, respectively.

On January 30, 2009, the Seoul District Court of District Office revoked the judgment in claim allowance proceedings of 2008 Down-5 on January 30, 2009, and confirmed that there is no bankruptcy claim against the debtor's marine transportation corporation of the defendant.

1. Basic facts

A. The shipping company (hereinafter referred to as the "debtor company") issued 65,00 shares of 10,000 shares that are 10,000 shares, and among them, 24,50 shares (each 37.69%), 14,500 shares (22.31%) and 1,500 shares (2.31%) by the Plaintiff.

B. On March 30, 2006, the current status of executive officers of the immediately preceding debtor company was as follows.

(1) The plaintiff was appointed as a director and a representative director on July 7, 2004.

(2) The grandchildren 1 was appointed as a director on July 7, 2004, and the representative director was appointed from August 19, 2005 to February 28, 2006.

(3) The grandchildren 2 was appointed as a director on October 14, 2005, and on February 28, 2006, the representative director was appointed on February 28, 2006. (4) The grandchildren 4: June 25, 2003. However, the term of office was expected to be terminated on March 31, 2006.

C. On March 30, 2006, the debtor company held a general meeting of shareholders and passed a resolution to appoint the defendant as standing auditors (hereinafter referred to as the "resolution to appoint the auditor of this case") at that general meeting of shareholders (hereinafter referred to as the "general meeting of shareholders of this case"). On March 30, 2006, the debtor company decided to appoint the defendant as standing auditors, appoint the defendant outside C5 directors, set the maximum amount of remuneration for full-time directors at 350,000,000 won, and set the maximum amount of remuneration for full-time auditors at 55,00,000 won. Accordingly, the defendant was appointed as auditor of the debtor company on March 30, 2006.

D. On July 14, 2006, the debtor company held a general meeting of shareholders on July 14, 2006, and enacted the "Rules on the Payment of Bonuses and Bonuses for Officers" and the "Retirement Allowance Regulations for Officers" at that general meeting of shareholders (hereinafter referred to as the "general meeting of shareholders"). The main contents of the "Rules on the Payment of Bonuses and Bonuses for Officers" are determined by the resolution of the board of directors (Article 4). The main contents of the "Rules on the Payment of Retirement Allowances for Officers" are as follows: First, the retirement allowance of officers is the amount calculated by multiplying the average remuneration for the three months before retirement (including bonuses) by the number of continuous service years, by the payment rate; second, the payment rate is determined by the board of directors in consideration of the number of years of continuous service, the degree of contribution by the company (Article 5); second, the special compensation can be paid separately from the retirement allowance with the resolution of the board of directors (Article 6).

E. On June 18, 2007, Extraordinary5 retired from office as a director of the debtor company.

F. On June 25, 2007, the debtor company held a board of directors on a resolution of the board of directors to determine the payment rate of retirement allowances and special compensation in a lump sum (hereinafter “resolution of the board of directors”) for the officers and employees including grandchildren 1, grandchildren 2, and the plaintiff and the defendant, among those in which the representative director is present and the director is not present. In the resolution of the board of directors of this case, the debtor company decided the payment rate of retirement allowances for the defendant as 1.0, and the special compensation amount as 25,00,000 won. The defendant resigned from the office of auditor of the debtor company on August 8, 2007.

H. On December 27, 2007, the debtor company was declared bankrupt by Busan District Court by 2007Hahap6, and registered on January 2, 2008.

I. In the above bankruptcy procedure, the Defendant filed a report on the total amount of 36,676,440 won of retirement pay and special compensation, and the amount of tax settlement with bankruptcy claims. Accordingly, the Plaintiff and the debtor company’s bankruptcy trustee raised an objection thereto. As a result, the procedure for a judgment in claim allowance proceedings was conducted under the Busan District Court Decision 2008Haper 5 with respect to the Defendant’s above claim, and the above court decided on January 30, 2009 that the Defendant’s bankruptcy claim against the debtor company was KRW 36,676,440.

[Grounds for Recognition: Evidence Nos. 1, 3 through 6, Evidence No. 1, 3, 4, 7, and 8, and the purport of the whole pleadings]

2. The plaintiff's assertion

A. (1) Since the general meeting of shareholders for the appointment of auditors of this case was not lawfully convened, the resolution of the appointment of auditors of this case is nonexistent or null and void.

(2) The shareholders’ losses and grandchildren’ C1 and 2 of the debtor company have special interests in approving the limit of directors’ remuneration as directors of the debtor company and changing the regulations on retirement allowances for officers, so they cannot exercise their voting rights. Nevertheless, since the shareholders’ losses and grandchildren’ losses exercise voting rights at the shareholders’ meeting of appointment of auditors, the resolution of appointment of auditors in this case is null and void.

(3) Although the debtor company did not have a reason to appoint a full-time auditor, it cannot be recognized as a full-time auditor in good faith that the defendant was appointed as a full-time auditor, and thus the resolution on appointment of the auditor in this case is null and void

B. (1) The grandchildren 1 and BaC2, as a director of the debtor company, have a special interest in relation to the retirement allowance and special compensation of a director, cannot exercise their voting rights thereon. Nevertheless, as they exercised their voting rights in the resolution of the board of directors in the instant case on retirement allowance by the grandchildren 1 and BaC2, the resolution of the board of directors in the instant case, including the contents concerning the payment rate of retirement allowances and special compensation against the defendant, is entirely null and

(2) If the management performance and financial status are difficult as much as the filing of a petition for bankruptcy was filed, the debtor company would immediately change the controlling shareholder, and accordingly, would have been sufficiently anticipated to change the director's performance. However, the board of directors' resolution to determine the rate of payment of retirement allowances for executives and to pay a high amount of special compensation is too prejudicial to the debtor company's capital adequacy, and thus, the resolution of the board of directors in

(3) Since a resolution on the payment rate of retirement pay and special compensation is a matter of resolution of the general meeting, the resolution of the board of directors of this case is null and void. Therefore, the defendant does not hold a bankruptcy claim against the debtor company.

3. Determination on the resolution to appoint an auditor of this case

A. Whether to convene a general meeting of shareholders

As seen above, the shares issued by the debtor company are 65,00 shares. Meanwhile, according to the evidence No. 3, at least 39,000 shares among the resolution of the general meeting of shareholders for appointment of auditor of this case, including the resolution of appointment of auditor of this case, at least 60% of the shares can be recognized as exercising voting rights. In light of these facts, even if there is a defect in convening the general meeting of shareholders for appointment of auditor of this case, it is difficult to deem that the resolution of appointment of auditor of this case is nonexistent or null and void.

(b) Whether a specially interested person exercises his/her voting right;

No person who has a special interest in a resolution of the general meeting of shareholders shall exercise his voting right.

(Article 368(4) of the Commercial Act. Accordingly, it is insufficient to recognize that there was a separate resolution that approves the limit of remuneration of directors at a general meeting of shareholders of the instant case, which is a single general meeting of shareholders, on the instant resolution to appoint the Defendant as an auditor, solely on the ground that grandchildren 1 and grandchildren 2, who are directors, have special interests in the instant resolution to appoint the Defendant as an auditor, and that there was a separate resolution that approves the limit of remuneration of directors, as seen earlier. Therefore, there is no other evidence to recognize otherwise. Therefore, the instant resolution to appoint auditors cannot be deemed null

C. Whether the principle of good faith is violated

It is insufficient to recognize that the debt holding company was declared bankrupt as above and there is no reason to appoint a standing auditor in the debtor company. Therefore, the resolution on the appointment of the auditor in this case cannot be deemed null and void against the good faith principle.

D. Sub-determination

Thus, the resolution of appointment of an auditor of this case cannot be null and void, and it is valid to appoint the defendant as an auditor through the resolution of appointment of an auditor of this case at the general meeting of shareholders of this case. Therefore, the defendant has the right to receive remuneration from the debtor company as prescribed by the law.

4. Judgment on the resolution of the board of directors of this case

(a) Whether a specially interested person passes a resolution;

In the case of the board of directors, a person who has a special interest in a resolution like the general meeting of shareholders cannot exercise his/her voting right (Article 391(3) and Article 368(4) of the Commercial Act). However, Article 388 of the Commercial Act provides that the remuneration of a director shall be determined by the articles of incorporation or the resolution of the general meeting of shareholders; Article 388 of the Commercial Act provides that a retirement allowance or special compensation to be paid to a director c1 and a grandchild 2 shall directly transfer the debtor company's property to the debtor company; and the debtor company is an expenditure to the debtor company and a grandchild 1 and a grandchild c2 shall be an individual interest; each resolution related to c1 and kbC2 may be separately made against other executives and employees; in light of the fact that the resolution of the board of directors of this case can be made separately from the resolution of the board of directors of this case, the

However, in a case where a part of a juristic act is null and void, the whole invalidation shall be deemed null and void, but the remaining part shall not be deemed null and void if it is deemed null and void (Article 137 of the Civil Act). In the case of a resolution of the board of directors of this case, it shall be deemed a joint act in the form of a juristic act. Since the debtor company needs to set the retirement allowance rate for the retired executive officers and employees, it is deemed that the resolution of the board of directors of this case, i.e., the part related to the defendant and other executive officers and employees, with the exception of the part related to the C1, c2, the director of the board of directors of this case, i.e., the part related to the defendant and other executive officers and employees, even though there are no parts related to C1, c2, regardless of the fact that the resolution of the board of directors of this case relating to

B. Whether it is against the principle of capital adequacy

On the sole basis of the fact that a debt subsidiary was declared bankrupt, paying a retirement allowance or special compensation to the Defendant by a resolution of the board of directors of this case is insufficient to deem that the payment of the total amount of capital (=10 million won X 65,000 won) to the Defendant would be a major threat to maintaining its capital, and there is no other evidence to recognize it. Therefore, the resolution of the board of directors of this case cannot be deemed null and void contrary to the principle of capital adequacy.

(c) Whether matters are resolved upon by the board of directors

According to Articles 415 and 388 of the Commercial Act, remuneration of an auditor of a stock company shall be determined by a resolution of the general meeting of shareholders, if the amount is not determined by the articles of incorporation. On the other hand, a retirement allowance for an auditor and a special compensation for retirement (in this case, a special compensation) shall be included in remuneration paid to a retired person at the cost of performing his/her duties while in office.

If so, according to the statement in Gap evidence No. 4, whether there was a determination of the amount of retirement allowance or special compensation of the auditor in the articles of incorporation of the debtor company, the articles of incorporation of the debtor company only determined the amount of the officer's remuneration or retirement allowance at the general meeting of shareholders (Article 24) but did not determine the amount differently. Therefore, the amount of the defendant's retirement allowance or special compensation of the auditor must be determined by a resolution

However, Articles 415 and 388 of the Commercial Act provides that an auditor’s remuneration shall be determined by a resolution of the articles of incorporation or the general meeting of shareholders for guaranteeing the independence of auditors who audit of directors. Thus, it is null and void as it goes against the legislative intent of Articles 415 and 388 of the Commercial Act to arbitrarily delegate the determination of the amount of retirement allowances and special compensation for auditors by the articles of incorporation or the resolution of the general meeting of shareholders of a stock company. Provided, That it is valid to set the specific standards for retirement allowances and special compensation for auditors at a general meeting of shareholders, and to delegate the determination of the amount of retirement allowances

In the case of the portion concerning retirement allowances in the Regulations on the Payment of Retirement Allowances for Officers (including bonuses) adopted at the general meeting of shareholders under the Regulations on the Payment of Retirement Allowances for Officers, as seen earlier, the amount calculated by multiplying the retirement allowances by the number of years of continuous service and the payment rate shall be determined by the board of directors, comprehensively taking into account the number of years of continuous service, the limit of the payment rate shall be determined by the board of directors, and since the board of directors specifically set the criteria for retirement allowances and delegates the amount to the board of directors in accordance with such criteria, this portion shall be deemed valid. However, in the case of the portion concerning special compensation, if an officer who has contributed to the company retires from office, it is determined that the special compensation can be paid separately from the retirement allowances subject to the resolution of the board of directors, and it is not effective

If so, determining the rate of payment of retirement allowances to the defendant is a resolution of the board of directors of the debtor company, but it is not a resolution to determine the special compensation for the defendant. Therefore, it is valid to determine the rate of payment of retirement allowances to the defendant among the resolution of the board of directors of this case under the Regulations on Payment of Retirement Allowances for Officers. However, it is invalid to determine the special compensation for the defendant.

5. Claim amount of the defendant

(a) The basis for calculating the amount of claims;

(1) In full view of the purport of the entire pleadings in the statement in subparagraph 2, the Defendant’s basic remuneration for the three-month period immediately preceding his retirement is KRW 4,580,000 per month.

(2) In full view of the purport of the argument in the statement of evidence No. 5, the defendant can recognize the fact that the defendant received bonuses of 500% per annum from the debtor company according to the resolution of the board of directors of the debtor company. However, since the bonus also includes audit fees under Articles 415 and 388 of the Commercial Act as consideration for the performance of duties of the directors, if the articles of incorporation do not provide for the amount of the bonus, it shall be determined by the resolution of the general meeting of shareholders. However, according to the statement of evidence No. 4, the articles of incorporation of the debtor company did not provide for the bonus or retirement allowance of the officer (Article 24) other than that of the general meeting of shareholders (Article 24). Meanwhile, according to the above facts, the company's general meeting of shareholders for legislative purposes of this case stipulated the Rules on Bonuses and Bonuses Payment of Bonuses, the main contents are merely determined by the resolution of the board of directors (Article 4) and thus, the above provisions are not effective to determine the bonus as remuneration of the officer.

(3) On the other hand, if the amount of income settlement and the purport of the entire argument in Gap evidence No. 1 is added, the State and local governments may recognize the fact that the debtor company, who is the withholding agent, settled the income tax and resident tax paid by the defendant and refunded KRW 4,426,450 among them to the debtor company. Such refund amount is the money to be returned to the defendant,

B. Sub-determination

The Defendant’s retirement allowance is determined by the amount calculated by multiplying the average remuneration (including bonuses) for the three months before his retirement by the length of service and the rate of payment. Therefore, this is 6,236,328 won (=(4,580,000 won X3 months)/3 months X 497 days/365 x 1.0), and the income tax and resident tax refund amount are 4,426,450 won. Therefore, the Defendant has a claim against the obligor company in total 10,62,78 won.

5. Conclusion

Then, the Busan District Court's 2008Haw-5 Dated January 30, 2009 judgment of final bankruptcy shall be changed to determine that the defendant's bankruptcy claim against the debtor company is KRW 10,662,768. Therefore, the plaintiff's claim is justified within the above recognition scope, and the remaining claims in excess are dismissed due to the lack of reasonable grounds.

Judges Lee Jong-soo

(i) if the total annual basic remuneration and bonus does not exceed the annual remuneration limit decided at a general meeting of shareholders, such reward;

money may be deemed reasonable as remuneration within the extent determined by the general meeting of shareholders, but in this case, the defendant

Annual basic remuneration and bonus amounting to KRW 77,860,00 = 4,580,000 = X (12 months + 5)). The appointment of the auditor in this case

The annual remuneration limit of standing auditors decided at a general meeting of shareholders exceeds 5,00,000 won much.