Han Bank Co., Ltd. (Attorney Park Jong-ho, Counsel for the plaintiff-appellant)

Korea Deposit Insurance Corporation (Attorney Cho Jae-hoon et al., Counsel for the plaintiff-appellant)

April 28, 2005

Seoul Central District Court Decision 2003Gahap76945 Delivered on July 23, 2004

1. Revocation of a judgment of the first instance;

The Seoul Central District Court confirmed that the claim for payment of deposit money No. 12159 was against the plaintiff in 2002.

2. The costs of the lawsuit shall be borne by the defendant in the aggregate of the first and second instances.

The same shall apply to the order.

1. Basic facts

The following facts may be acknowledged as either a dispute between the parties, or as a whole by taking into account the whole purport of the pleadings at the testimony of the witness Kim Jong-il of the first instance court, and the statements in Section A1-2, 2-1 through 6, 3, 4, 5, 7-1 through 5, 8-1 through 5, 8-2, 10-1 through 4, 14, 1, 1, 2, 3-1 through 6, 5-1, 2, 5-2, 6, 8-1 through 5, and 8-1 through 5, and the statements in Section B-4 shall not be interfered with.

(a) Relationship between the Parties

The Plaintiff is an international comprehensive construction company (hereinafter referred to as “international case”) and a bank prior to bankruptcy, and the Korean comprehensive financial company prior to bankruptcy (hereinafter referred to as “Korean comprehensive financial company”) are a financial institution with the principal business purpose of bill discount, sale, etc., which has been subject to the authorization of business on February 17, 1998 and was declared bankrupt on September 18, 198 by the Seoul District Court 98Ha106, and the Defendant was appointed as a bankruptcy trustee on February 15, 2001 by the above court as a bankrupt.

(b) Reorganization claims against international cases of the Plaintiff Bank;

(1) On the other hand, the Plaintiff Bank was engaged in overdrafting transactions within the limit of 3 billion won between international case and international case. On January 9, 1998, the Plaintiff Bank was issued a promissory note with the face value of 3 billion won guaranteed by Han Jong-sung, an international case on January 17, 1998.

(2) On October 198, Busan District Court Decision 98Da14555 decided on the commencement of the corporate reorganization procedure, and the Plaintiff Bank participated in the corporate reorganization procedure as a reorganization creditor for an international case and was recognized as the reorganization claim by the receiver as the sum of KRW 1,773,262,513 of the promissory note claim and KRW 4,773,262,513 as the reorganization claim.

(c) Bankruptcy claim against the Korean Commercial Paper of the Plaintiff Bank;

In addition, as of September 18, 1998, the Korean Commercial Paper was declared bankrupt, and the Plaintiff Bank participated in the bankruptcy procedure, and as of September 18, 1998, the Plaintiff Bank reported KRW 3,584,712,328 as bankruptcy claim and received a considerable time to report the same amount as bankruptcy claim.

(d) 1 and 2-equity swap due to authorization, etc. of a reorganization change plan concerning reorganization claims;

(1) In reorganization proceedings for international type reorganization of the reorganization company, on May 12, 1999, 2,386,631,257 won of reorganization claim 4,773,262,513 won of the Plaintiff bank's 50% of the total amount of 50% of the total amount of 4,386,631,257 won of the reorganization claim 5,000 won was approved by the reorganization court, and the reorganization plan was approved by the reorganization court on December 27, 199, and accordingly, the Plaintiff bank received 47,326 weeks (=2,386,630,000 won ± 5,00 won) and received 1,257 won of the remainder of the bonds below the face value in cash.

(2) The reorganization program, which is revised to convert 1,909,305 won at par value and issue value into shares of 10,000 won, was approved by the court of reorganization, and the second conversion into equity on March 25, 2002 was conducted on March 25, 2002. Accordingly, the Plaintiff bank received 190,930 shares (1,909,300,000 won ±1,909,30,000 won ±10,000 won ±10,000 won ±10,930 won ±1,909,30,000 won ±10,000 won below face value and received 5,05 won in cash.

(3) If the Plaintiff’s reorganization claim remaining due to the foregoing debt-equity swap is deducted at a par value of new shares, the amount of KRW 477,326,251 (i.e., KRW 4,773,262,513 - 2,386,631,257 - 1,909,305,0505).

(e) The defendant's partial repayment of bankruptcy claims and delivery of bonds transfer and takeover contracts, etc.;

(1) On the other hand, on January 20, 2001, the defendant sent a notice of interim dividend and dividend amount to bankruptcy creditors including the plaintiff bank, and prior to conducting interim dividend, prior to conducting interim dividend, the following summary of the notice.

C. Foods

In the bankruptcy case of the Seoul District Court No. 98Ha106, I paid interim dividends to creditors. The payment of dividends is, in principle, paid in the manner of paying the bank account, and the documents required for the receipt of the dividends are as follows.

㈎ 배당금 수령을 위한 공통구비서류

A creditor shall receive dividends, request for remittance, documents constituting claims, or power of attorney, etc. if the receiver is an agent.

㈏ 채권자별 추가 구비서류

A creditor who is distributed to a bankrupt on the ground that he/she becomes a guarantor for the transfer of credit, shall be as follows: ① certificate of subrogation, ② certificate of subrogation, ③ certificate of acceptance of credit, ④ three copies of notice of assignment of credit (three copies of certificate of seal impression), ⑤ power of attorney.

㈐ ① 이미 일부 채무를 변제 받은 채권자는 법원에 감소한 채권만큼 채권철회신고를, ② 채권양도를 한 경우에는 양 당사자간의 인감을 첨부하여 법원에 채권자 명의변경 신고를, ③ 채권자 명의가 변경된 경우(합병 등)에는 법원에 채권자 명의변경 신고를 하여 주십시오.

It does not distribute dividends to creditors who have not followed such procedures.

Furthermore, the above notice was accompanied by the letter of delegation that delegates all acts regarding the receipt of dividends on bankruptcy claims to the defendant, ② the certificate of subrogation, ③ the transferor’s bank, and the transferee’s company, respectively, to the effect that the claim transfer contract with the defendant’s name is performed, ④ the claim transfer procedure with respect to the amount of claims equivalent to the amount of dividends received, ④ the notice of assignment of claims, ⑤ the notice of change of the creditor’s name is attached.

(2) On July 24, 2002, the Plaintiff bank entered into a contract for the assignment of claims between the Defendant and the Defendant by affixing a seal on the party column of the above contract for the transfer of claims received from the Defendant (hereinafter “the instant contract for the transfer of claims”), and received dividends from the Defendant in total of KRW 1,653,550,296 (=one time 872,124,686 + KRW 631,151,460 + KRW 3 times 150,274,150).

(3) On August 21, 2002, the Defendant sent a certificate of the use of the Plaintiff bank manager and a certificate of the power of attorney to an international settlement administrator of the liquidation company, and subsequently, sent the instant transfer of claim, a certificate of subrogation, etc., and reported the change of the creditor’s name to the effect that the creditor’s name as to the international termination of the liquidation company is changed to the Defendant at the Plaintiff bank. On August 29, 2002, the liquidation company issued a notice of the change of the reorganization creditor’s name to the Defendant on August 29, 200, that the creditor’s name was changed to the Defendant.

F. Additional repayment of the reorganization claim of this case (deposit of this case)

(1) On September 30, 2002, the international principal administrator of the reorganization company repaid 27.5% of the outstanding principal amount of the reorganization claim, and the remaining 72.5% of the reorganization plan was approved by the court. Accordingly, the reorganization claim against the Plaintiff bank was determined as the amount payable (i.e., the amount calculated at the face value) equivalent to 27.5% of the reorganization claim 47,326,251 (amount calculated at the face value) after the second debt-equity swap.

(2) The Plaintiff bank filed an application with the Seoul Central District Court 2002Kahap2995 for provisional injunction against disposal of claims against the Defendant as the debtor and the international principal administrator of the reorganization company as the third party debtor. The said court accepted the provisional injunction on October 18, 2002 and rendered a provisional injunction order. The international principal administrator of the reorganization company deposited KRW 131,264,719 of the said additional payment with the said court as 12159 on the ground that the creditor is unclear on October 24, 2002.

2. Summary of the parties’ assertion

A. The plaintiff's assertion

(1) The Defendant’s interim dividend repayment amount of KRW 1,653,550,296 on July 24, 2002 against the Plaintiff, who is a bankruptcy creditor, merely pays not only a bankruptcy claim but also a part of the reorganization claim of this case, and thus, cannot be exercised as a reorganization creditor in preference to the Plaintiff.

The instant claim assignment contract states that the Defendant would not pay dividends for bankruptcy claims unless the employees of the Plaintiff bank submit documents, such as the contract on assignment of claims, the certificate of subrogation, and the notice of assignment of claims. It is merely that the employees of the Plaintiff bank prepared and submitted the documents for the receipt of dividends for bankruptcy claims without properly understanding the meaning thereof. The Defendant did not have any specific explanation on the documents, such as the above contract sent by the Defendant at the time, and entered the documents re-issued by the Plaintiff in supplement of the amount amount amount arbitrarily without the agreement with the Plaintiff. Thus, there was no agreement between the parties as to the content of the specific claim assignment. Accordingly, the Defendant merely paid part of the instant claim assignment contract cannot exercise the Plaintiff’s reorganization claims preferentially based on the Plaintiff’s claim assignment contract.

B. Defendant’s assertion

(1) The assignment of the instant claim is legitimate, since the Defendant received the reorganization claim equivalent to the repayment amount, while paying the sum of KRW 1,653,550,296 in excess of that amount as of July 24, 2002, under the condition that the Plaintiff’s reorganization claim was remaining 477,326,251 won as of July 24, 202.

See The Plaintiff Bank signed and sealed the instant assignment of claims in the document sent by the Defendant, and thus, there was an agreement between the parties.

Secondly, even if the Defendant’s sole ownership of the instant deposit is not recognized, the Defendant has the right to own the remaining reorganization claims of the Plaintiff and the Defendant’s claim for indemnity in proportion to their respective claims.

3. Determination

A. First, we examine whether the Defendant’s payment of dividends on bankruptcy claims constitutes partial repayment of reorganization claims.

International case of reorganization company and the defendant are liable for the full performance of each of the claims of the plaintiff bank. Among them, those claims against the principal debtor are reorganization claims, and those against the guarantor are bankruptcy claims. Under the reorganization plan for international termination, the plaintiff bank shall substitute 477,326, and 300,000 new shares through the primary conversion of investment in lieu of the repayment of obligations with dividends of 477,326,251 won, and the remaining reorganization claims are less than 477,326,251 won if the amount of the new shares issued is calculated as the par value of the new shares, and the defendant paid 1,653,50,296 won to the plaintiff bank in excess of the above remaining amount for the repayment of bankruptcy claims.

However, in general, where a reorganization plan under the Company Reorganization Act intends to substitute for the repayment of a reorganization claim through the conversion of new shares into investment by the method of issuing new shares, the obligations of the reorganization company shall be deemed to have expired on the basis of “the date when the issuance of new shares takes effect” substantially satisfactory by creditors, and the amount equivalent to the “market price of new shares” which the reorganization creditor acquired by the creditor shall not be deemed to have expired, and the face value of new shares shall not be deemed to have expired (see Supreme Court Decisions 2004Da27143, Jan. 27, 2005; 2001Da64035, Jan. 11, 200

In full view of the purport of the arguments as to the instant case, as a whole, the following facts are acknowledged: (a) at the time of the issuance of new shares through a conversion of investment, the international closing price of the reorganization company was 2,340 won per share and 960 billion won per share at the time of the secondary conversion of investment; and (b) at the time of the secondary conversion of investment, the Plaintiff bank calculated the actual amount of money collected with respect to promissory notes related to bankruptcy claims among the instant reorganization claims, 300,000 shares acquired at the time of the first conversion of investment (i.e., 3 billion won per share 50 billion won per share ± 50 billion won per share (i.e., 3 billion won per face value per share) multiplied by the market price at the time of the first conversion of investment (i.e., 2, 2,340 won x 30 billion won per share) (i.e., the market price at the time of the second conversion of investment) (i., 200 billion won per share

Therefore, even if the Plaintiff’s claim related to the instant reorganization claim 3 billion won (i.e., KRW 2,275,200,000 (i.e., KRW 3 billion in reorganization claim - KRW 724,80,000 in actual recovered amount), the Defendant’s intermediate dividends 1,653,550,296 against the Plaintiff bank are merely partially repaid.

B. We examine the meaning of the assignment contract of this case.

(1) The process of preparing the instant assignment contract, etc.

Considering the overall purport of pleadings in Gap 6-1 through 7, Eul 1, Eul 2, and 3-1 through 6, Eul 5-1 and 5-2, Eul 5-1 and 5-2 respectively, and testimony at the hearing of the first instance witness Kim Jong-il, all documents sent by the defendant to the plaintiff bank to make interim dividends of bankruptcy claims are described in the same text and the name of the plaintiff bank was entered in the name of the party at the bottom of the above documents. In addition, among the above documents, ① the debtor of the claim to be transferred in the contract of assignment of claims, the number and transfer date of the claim, ② the amount of subrogation in the certificate of subrogation, ③ the contents and subrogation date of the claim to be transferred in the certificate of assignment of claims, ③ the name of the debtor of the claim to be transferred in the creditor's name, ④ the number of the creditor, the debtor and the transferor, ⑤ the proxy number and the defendant's number, and ⑤ the Kim Jong-il's employee's name and seal were not presented to the defendant.

(2) Determination

According to the statement in Section 5, Section 2, of the reorganization claim in this case, where a third party such as a guarantor, etc. acquires a right to indemnity by paying a debt of the reorganization company, it can be acknowledged that the reorganization claim in this case shall succeed to the reorganization claim repaid by subrogation within the extent of the balance of the reorganization claim to be repaid by the reorganization company.

However, when the company reorganization procedure commences for one of several persons and a creditor exercises his right as a reorganization creditor in the reorganization procedure, a person with future right to indemnity against the reorganization company cannot exercise his right as a reorganization creditor, notwithstanding Article 108 Section 4 of the Company Reorganization Act, but in case where a person with future right to indemnity makes a payment for an "total amount of claim" as of the earlier date, he may exercise his right as a reorganization creditor by changing the name of report as stipulated in Article 128 of the Company Reorganization Act, and in case where a person with future right to indemnity makes a payment for part of the claim by subrogation, only the creditor can exercise his right as a reorganization creditor with respect to the total amount of the claim held at the time of the commencement of the reorganization procedure, and it does not exercise his right as a reorganization creditor in proportion to the value of his performance (see, e.g., Supreme Court Decision 2001Da24938, Jun. 29, 201). Ultimately, the provisions of succession of the above Section 4 in the above case of reorganization claim claim.

In addition, the following facts are inferred in the above recognition: ① if the Plaintiff bank, which is a reorganization creditor, received only part of the claim from the Defendant, and intended to transfer the whole claim to the Defendant and have the Defendant exercise all of its rights, this means that the Plaintiff bank waives the remainder of the reorganization claim; ③ there is no evidence to acknowledge the waiver of rights, such as a letter of waiver of rights in the name of the Plaintiff bank; and ② it appears not to be an implied waiver in light of the process of preparation of the transfer contract of this case and the fact that the Plaintiff applied for provisional disposition against disposal of the deposit of this case immediately; ② if it is interpreted that the Plaintiff transferred the claim of this case to the Defendant even though it did not waive its rights, and that the Defendant granted the Defendant the right to receive repayment prior to the Plaintiff’s repayment prior to the Plaintiff’s bankruptcy procedure, even if the deposit of this case belongs to the Defendant, it means that the Plaintiff can seek the Defendant’s liability as surety; ③ it means that, in light of the fact that the Plaintiff bank did not exercise its right to receive dividends from the Plaintiff bank, the transfer of this case, the Plaintiff bank, and it did not have any specific purport.

Therefore, the assignment contract of this case concluded with only a part of the plaintiff's reorganization claim is null and void in the absence of a genuine agreement with the plaintiff about granting preferential rights to reorganization claim against the defendant or exercising a divided right to reorganization claim. Therefore, the plaintiff's argument has merit (in that regard, the defendant's argument that the plaintiff and the defendant should exercise their rights in proportion to the deposit of this case is without merit).

4. Conclusion

If so, the plaintiff's remaining reorganization claim is subject to the plaintiff's right to claim payment of the deposit money of this case, which is the repayment of the plaintiff's remaining reorganization claim, and the defendant is dissatisfied with this claim, so the plaintiff's claim of this case shall be accepted, and the judgment of the court of first instance is unfair with this conclusion, and it is so decided as per Disposition with the plaintiff's appeal.

Judges Gu-Appellee (Presiding Judge) Dok-hee Kim Jong-hee

1) Among the reorganization claims in this case, the portion arising from the same cause as bankruptcy claims in the reorganization claims, is about 62.9% (3 billion won ¡À 4,773,262,513 won ± 100) of the reorganization claims, since there are both a bill-guaranteed claim and a face-to-face loan claim.

2) On March 22, 2002, international case reduced 15 shares of KRW 5,000 per share on March 22, 2002, and as a result, the shares received by the Plaintiff Bank through the first equity swap became 20,000 shares (A15-1).

3) The Plaintiff’s capital reduction procedure mainly reduces 20,00 won by the number of shares held due to the primary debt-equity swap. On October 5, 2002, the Plaintiff: (a) 140,00 won per share related to the claim for a promissory note on November 29, 2002; (b) 60,00 won per share among 177,326 shares related to the claim for current account transaction on July 8, 200; (c) 117,326 shares remaining on August 4, 200; (d) the total amount of shares acquired at the time of debt-equity swap sold to approximately 284,00,000 won per share; and (e) the actual amount of shares actually recovered by the Plaintiff at the time of debt-equity swap, including the total amount of shares sold to KRW 130,00 per share on August 1, 200; and (e) the amount of shares actually recovered to KRW 1311,21500

4) Article 110 of the Company Reorganization Act : ① Where several persons are liable for all of them, if reorganization proceedings are commenced in respect of all of them, or one of them, the person holding the right to indemnity which may be exercised in the future against them, may exercise his right as a reorganization creditor with respect to the total amount of that claim: Provided, That this shall not apply where a creditor has exercised his right as a reorganization creditor with respect to the whole of that claim.