[1] The purport of Article 530-9 of the Commercial Act

[2] The purport of Article 272(1) and (4) of the Debtor Rehabilitation and Bankruptcy Act

[3] Whether a public-interest creditor has a right to participate in the meeting of interested persons to state his/her opinion or make a resolution for the resolution of the rehabilitation plan (negative), and whether an appeal may be filed against the authorization decision of the rehabilitation plan (negative)

[4] Whether Article 272 (1) and (4) of the Debtor Rehabilitation and Bankruptcy Act apply to this priority claim (negative)

[1] Article 530-9 of the Commercial Act / [2] Articles 193(2)6, 212(1)7, 213(1)7, 232, 243, 272(1) and (4), 527-5, and 530-9 of the Debtor Rehabilitation and Bankruptcy Act / [3] Articles 180(1), 193, 199, 232, 243, and 247 of the Debtor Rehabilitation and Bankruptcy Act / [4] Articles 180(1), 193, 199, 199, 212(1)7, 213(1)7, 213(1) and (4), 237, and 240-9 of the Debtor Rehabilitation and Bankruptcy Act

[2] Supreme Court Decision 2005Da60 Decided January 20, 2006 (Gong2006Sang, 386) Supreme Court Decision 2009Da40349 Decided January 28, 2010

Plaintiff (Attorney Kim Sang-sung et al., Counsel for the plaintiff-appellant)

Defendant in bankruptcy who is the administrator of non-party 1’s rehabilitation debtor treatment-related development corporation, the trustee of non-party 2’s bankruptcy debtor treatment-related development corporation, the trustee of non-party 2’s lawsuit acceptance of the lawsuit

Seoul High Court Decision 2014Na30232, 30249 decided January 14, 2015

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

The grounds of appeal are examined.

1. As to the grounds of appeal Nos. 2 and 3

A. Article 530-9(1) of the Commercial Act provides that “A company established through division or merger after division or a surviving company after division shall be jointly and severally liable for the obligations of the company before such division or merger after division.” However, the above joint and several liability may be excluded by prescribing that a company established by division or a surviving company after such division or merger after such division (hereinafter referred to as “inheritors company”) shall bear only the obligations with respect to the invested assets among the obligations of the company that is divided and provided with investments by such division (Article 530-9(2) and (3) of the Commercial Act). In this case, the procedures for protecting creditors under Article 527-5 of the Commercial Act should be followed (Article 530-9(4) of the Commercial Act). In a case where the Commercial Act divides a stock company, the successor company and the divided company after division shall, in principle, be jointly and severally liable for the existing obligations of the divided company due to the division, because the division’s active property and the inherited company are arbitrarily allocated to the succeeding company and it may affect the existing creditors.

Meanwhile, according to Article 193(2)6 of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “Rehabilitation Act”), rehabilitation procedures may determine the division of rehabilitation creditors and rehabilitation secured creditors, who are stock companies, into a rehabilitation plan. In such cases, a rehabilitation plan may exclude joint and several liability under Article 530-9(1) of the Commercial Act by prescribing that a company succeeding to the rehabilitation plan bears only the obligation with respect to the property invested among the obligations of the divided company (see Articles 212(1)7, 213(1)7, and 272(1)). In addition, the procedure for protecting creditors under Article 527-5, etc. of the Commercial Act is not applicable to rehabilitation creditors (see Article 272(4) of the Debtor Rehabilitation Act). Furthermore, rehabilitation creditors and rehabilitation secured creditors may determine the alteration of rights of rehabilitation creditors and rehabilitation secured creditors in the rehabilitation plan for efficient rehabilitation of the rehabilitation debtor, based on the need to submit a resolution on the rehabilitation plan containing the division to the court’s meeting meeting or determine whether the rehabilitation creditor’s consent is favorable to the requirements, etc.

However, different cases from public-interest claims. Unlike rehabilitation claims or rehabilitation security rights, public-interest claims ought to be repaid from time to time without resorting to rehabilitation procedures (Article 180(1) of the Debtor Rehabilitation Act). In addition, the rehabilitation plan stipulates that the repayment of claims for public-interest should be made in the future (Article 199 of the Debtor Rehabilitation Act); however, a public-interest creditor does not have any right to participate in the meeting of interested persons that resolve on the rehabilitation plan and state his/her opinion or make a resolution, and the rehabilitation plan does not have any legal interest with respect to the authorization decision of the rehabilitation plan, thereby becoming a legitimate appellant (see, e.g., Supreme Court Order 2005Da60, Jan. 20, 2006). The rehabilitation plan does not have any provision that affects public-interest creditors’ rights, such as the postponement of the repayment period or the reduction or exemption of claims, even if the rehabilitation plan provides for such provision, the effect of change of rights does not extend to public-interest creditors (see, e.g., Supreme Court Decision 2009Da4349).

In light of the purport of the provisions of the Commercial Act, the purport of the provisions of the Debtor Rehabilitation Act, and the status of public creditors in rehabilitation procedures, etc., it is reasonable to deem that the above special provisions of the Debtor Rehabilitation Act apply to rehabilitation claims and rehabilitation security rights, but do not apply to public-interest claims. Since Article 530-9(1) of the Commercial Act applies even when a debtor who is a stock company is divided pursuant to the rehabilitation plan, all successors and the company surviving a division after a division shall be jointly and severally liable for the public-interest obligations of the divided company established before the division. Even if the provisions of the rehabilitation plan exclude such joint and several liability, the effect of the change of debtor due to the division shall accrue to public-interest creditors of the divided company, and the right is substantially changed

B. Review of the reasoning of the lower judgment and the record reveals the following facts and circumstances.

(1) On August 10, 201, Daewoo Automobile Sales Co., Ltd. (hereinafter “former Daewoo Automobile Sales”) received a decision to commence rehabilitation procedures on August 10, 201, and on December 9, 201, a decision to authorize a rehabilitation plan became final and conclusive on February 10, 2012.

(2) On December 19, 201, according to the rehabilitation plan for the former Daewoo Motor Sales, the bus sales sector of the former Daewoo Motor Sales was divided, and the trade name was changed to that of the Daewoo Motor Sales Co., Ltd. (hereinafter “Self-Employed Motor Sales”) and the Construction sector was divided, and the Treatment Industry Development Co., Ltd. (hereinafter “Treatment Industry Development”) was incorporated, respectively, as the construction sector was divided. As such, the former Automobile Sales after division was made to change the trade name on December 20, 201 to the Treatment Telecommunications Development Co., Ltd. (hereinafter “Treatment Telecommunications Development”).

(3) The rehabilitation plan for the former Telecommunications Sales has the following provisions. In other words, public interest claims for the former Telecommunications Sales, which is a company prior to the division, shall be transferred in full in accordance with business relevance. <2> The latter is a company newly incorporated by division, shall succeed to the employment and legal relationship of all employees working in the bus sales sector, which is a company prior to the division, as of the date of division. <3> The latter is a company newly incorporated by division, and the latter is not jointly liable for any other obligations that are not succeeded. The latter is a company prior to the division, and the latter is not jointly liable for the obligations that are transferred to the former Telecommunications Sales and the Treatment Industry Development. The latter is not jointly liable for the obligations that are transferred to the latter as of the date of division.

(4) The Plaintiff, as an employee of the previous car sales business, had a claim for wages of KRW 63,734,398, which occurred from August 1, 2009 to May 31, 201, but the Plaintiff was affiliated with the bus sales business sector of the previous bus sales business, and was succeeded to employment as one-day automobile sales according to the aforementioned division, and accordingly, the Plaintiff’s wage obligations against the Plaintiff were fully succeeded to the automobile sales business.

(5) There is no evidence to deem that the Plaintiff consented to the provision that treatment and delivery development is not jointly and severally liable with respect to the obligation of the former Daewoo Motor Sales that has been transferred to the former Daewoo Motor Sales in the rehabilitation plan.

C. Examining these facts in light of the legal principles as seen earlier, wage claims held by the Plaintiff in relation to the previous car sales are public-interest bonds as stipulated in Article 179(1)10 of the Debtor Rehabilitation Act, and the obligation was fully succeeded to the sale of the Plaintiff in accordance with the above rehabilitation plan, but, pursuant to Article 530-9(1) of the Commercial Act, treatment industry development, which is another succeeding company, and treatment Songdo development, which is a divided company, shall be jointly and severally liable with the Plaintiff’s wage claims established prior to the split-off. In addition, even if there was a provision that excludes joint and several liability under Article 530-9(1) of the Commercial Act with respect to the Plaintiff’s wage claims in the old car sales plan as above, the effect of the Plaintiff’s wage claims does not extend to the Plaintiff, who is a public-interest creditor. Moreover, the circumstance that the Plaintiff succeeded to the employment of the Plaintiff due to the previous car sales, etc. does not constitute grounds for exclusion from joint and several liability under Article 530-9(1) of the Commercial Act.

In the same purport, the lower court is justifiable to have determined that the provisions of the rehabilitation plan do not affect the Plaintiff, on the grounds that there is no evidence to acknowledge that the Plaintiff obtained the Plaintiff’s consent with respect to the Plaintiff’s wage claim, which is a public-interest claim, as well as only the sale of his/her own automobile, and the development of the treatment-based and the treatment-based industry, exempted from liability. In so doing, the lower court did not err by misapprehending the legal doctrine on the impact of the division under the rehabilitation plan on the public-interest claim and the effect of the

2. Regarding ground of appeal No. 1

According to the records, the rehabilitation plan for the sale of treatment motor vehicles provides that “where the undetermined rehabilitation claims, etc. which were filed and pending before the commencement of the rehabilitation procedure are finalized by a lawsuit, etc. after the authorization decision on the rehabilitation plan was rendered, rehabilitation claims shall transfer to the sale of treatment motor vehicles, treatment industry development, and treatment transmission development according to the actual transfer ratio.” The actual transfer ratio is 9% of the treatment motor vehicle sales, 5.2% of the treatment industry development, and 85.8% of the treatment transmission development. This provision is clear in light of the language and text, it is not applicable to the Plaintiff’s wage claim, which is a public-interest bond. As seen earlier, the treatment transmission development is jointly and severally liable for the total amount of the Plaintiff’s wage claim established before the division, and thus, the Defendant is jointly and severally liable for the payment of wages of KRW 63,734,398 to the Plaintiff.

Nevertheless, the lower court erred by misapprehending the duty to pay KRW 54,684,113 to the Plaintiff according to the actual transfer ratio of the aforementioned rehabilitation claim against the wage claim of KRW 63,734,398, which is a public-interest bond, based on the actual transfer ratio of the aforementioned rehabilitation claim amount.

However, since the judgment of the court below cannot be modified more disadvantageous to the defendant, who is the appellant in accordance with the principle of prohibition of disadvantageous alteration in the instant case where only the defendant appealed, the above error of the court below is presumed to not affect the conclusion of the judgment. Ultimately, the ground of appeal on the ground that the court below erred by misapprehending the legal principles as to the distinction criteria between public-interest claims and rehabilitation claims, or by inconsistency with the reasoning applying the provisions on rehabilitation claims in the rehabilitation plan

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 Jo Hee-de (Presiding Justice)