In a case where a request for resumption of a lawsuit under Article 172 of the Debtor Rehabilitation and Bankruptcy Act is made before the end of the period for investigating the claim, whether such request is lawful (negative)

The taking-over of legal proceedings under Article 172 of the Debtor Rehabilitation and Bankruptcy Act is proceeding as part of the confirmation of a rehabilitation claim, and any objection is raised against the rehabilitation claim of a custodian, etc. by the end of the inspection period, and a rehabilitation creditor files an objection with all of the objectors as the other party to the lawsuit for the confirmation of his/her right, and the custodian who becomes the other party to the lawsuit becomes the party to the lawsuit in the status of the objection as to the rehabilitation claim. As such, a party cannot file an application for taking-over of the lawsuit in advance without being dissatisfied with the claim, and thus, it is unlawful even if

Articles 59(1), 148, 170(1) and (2), and 172 of the Debtor Rehabilitation and Bankruptcy Act

Dongbu Fire Marine Insurance Co., Ltd. (Law Firm Dongdong International Law, Attorneys Seo Dong-hee et al., Counsel for the defendant-appellant)

Daio Plast Co., Ltd., a litigation taking place by the non-party, the administrator of Daewoo Plastics Co., Ltd., a litigation taking place by the non-party (Attorney Seo-sung et al., Counsel for the plaintiff-appellant-appellee)

Seoul Central District Court Decision 201Na16508 Decided January 11, 2012

The judgment of the court below is reversed. The plaintiff's appeal is dismissed. The lawsuit for confirmation added selectively by the court below is dismissed. The litigation costs after the appeal are filed 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).

When rehabilitation procedures commence, litigation procedures concerning rehabilitation claims that fall under property claims that accrue prior to the commencement of rehabilitation procedures (Article 59(1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter referred to as the "Act"); rehabilitation creditors who intend to participate in rehabilitation procedures shall report rehabilitation claims to the court within the period for reporting the claims (Article 148 of the Act); when rehabilitation claims are not confirmed on the grounds of legitimate objection by the administrator, etc. (Article 170(1) of the Act), the right holder who holds the rehabilitation claims may file an application for the final claim inspection judgment (Article 170(1) of the Act); where litigation procedures are pending on the grounds of the objection claim at the time of commencement of rehabilitation procedures, all objectors shall take over the litigation procedures to seek the final claim inspection judgment (Article 172(1) of the Act); and the above lawsuit proceedings shall be filed within one month from the last day of the inspection period (Article 170(2) and Article 172(2) of the Act); and where rehabilitation claims are filed after the expiration of the period, such lawsuit shall be illegal (see, etc.).

In addition, the taking-over of the proceedings under Article 172 of the Act is proceeding as part of the confirmation of the rehabilitation claim, and any objection is raised against the rehabilitation claim of the receiver, etc. by the end of the inspection period, and the rehabilitation creditor files an objection against all of the objectors to the lawsuit for the confirmation of the right. In the taking-over of the lawsuit, the administrator who becomes the counterpart becomes a party to the lawsuit as an objection against the rehabilitation claim. As such, the party cannot file an application for taking-over of the lawsuit before the taking-over of the lawsuit without the filing of an objection to the claim. Thus, the taking-over of

According to the records, the plaintiff filed the lawsuit of this case on June 17, 2009, and on July 23, 2009, the decision of commencing rehabilitation procedures was issued against the debtor treatment-based corporation, the defendant, on July 23, 2009, and the plaintiff reported the claim to the rehabilitation court as a rehabilitation claim on September 4, 2009, which is within the reporting period of the rehabilitation claim; the debtor's administrator has filed an objection against the above rehabilitation claim during the claims inspection period; the non-party was found to have raised an objection against the above rehabilitation claim; the last day of the inspection period of the claim was October 16, 2009; on the other hand, the administrator's non-party was recognized to have submitted the application of taking-over of the lawsuit of this case to the court of first instance on August 26, 2009, and it was confirmed that no one can file an application for taking-over within one month from the last day of the inspection period of the claim.

In light of the above facts in light of the provisions and legal principles as seen earlier, the litigation procedure of this case was interrupted due to the decision to commence rehabilitation procedures for the debtor treatment-based corporation. Since there was a legitimate objection within the period of rehabilitation claim reporting by the plaintiff who is a rehabilitation creditor and the debtor's administrator, the litigation procedure should be taken over within one month from the end of the inspection period. Thus, the lawsuit of this case is unlawful. Thus, the lawsuit of this case is filed against the plaintiff who was not yet reported the rehabilitation claim before the inspection period of the claim expires, and even if the administrator raises an objection against the non-party by legitimate objection under the plaintiff's report of the rehabilitation claim after the request to resume, it cannot be deemed a legitimate request to resume the procedure.

Nevertheless, the court below made a decision on the merits on the premise that the administrator had lawfully taken over the proceedings. In so doing, it erred by misapprehending the legal principles on taking over the proceedings relating to the disputed claims, thereby adversely affecting the conclusion of the judgment. The ground of appeal assigning this error is with merit.

Therefore, without further proceeding to decide on the remaining grounds of appeal, the judgment of the court below is reversed, and this case is sufficient for the court to decide on the remaining grounds of appeal. As seen earlier, the lawsuit of this case should be dismissed unlawfully and thus, the judgment of the court of first instance with the same conclusion is justifiable, and thus, the plaintiff's appeal is dismissed, and the lawsuit for confirmation is dismissed selectively at the court below, and the litigation cost after filing the appeal is assessed against the losing party. It is so decided as per Disposition by

Justices Lee In-bok (Presiding Justice)