[1] Whether the recovery may be deemed to have been made when a decision on the preservation of company's property under the Company Reorganization Act was rendered with respect to a corporation in excess of debt (negative)

[2] The standard for determining whether the examination of successful tender was properly conducted in the competitive bidding that becomes a burden on the National Treasury or a local government

[1] Even though a decision to preserve the company's property was rendered on a company in excess of the debt pursuant to the Company Reorganization Act, if such decision becomes final and conclusive after the commencement of reorganization proceedings, rejection of an application, abolition of reorganization proceedings, or rejection of reorganization plans, the company may be declared bankrupt. Thus, the company cannot be deemed to have been recovered on the ground of the fact of a decision to preserve the company's property, and the company shall not be deemed to have been in a situation where its bankruptcy is likely to continue, notwithstanding the decision to preserve the company's property under the Company Reorganization Act

[2] Whether a successful bid qualification examination for a bidder at the lowest price was duly conducted in a competitive bid that becomes a burden on the National Treasury or a local government should be determined based on the statutes and facts at the time the examination was conducted, and the subsequent changes in circumstances should not be considered.

[1] Article 117 (1) of the former Bankruptcy Act (amended by Act No. 5519 of Feb. 24, 1998); Article 23 (1) and Article 39 of the Company Reorganization Act / [2] Article 10 (2) of the Act on Contracts to Which the State is a Party; Article 42 of the Enforcement Decree of the Act on Contracts to Which the State is a Party

Applicant 1 and two others (Law Firm Law Firm Spah, Attorney Seo-woo et al., Counsel for the plaintiff-appellant)

Kim Jong-si

Treatment Co., Ltd. (Attorney Lee Im-young, Counsel for defendant-appellant)

Busan High Court Decision 98Kahap21 delivered on December 23, 1998

All appeals are dismissed. The costs of appeal are assessed against the applicants.

The grounds of appeal are examined.

1. On the first ground for appeal

A declaration of bankruptcy may be made against a stock company even if it is impossible to fully repay its obligation with its property (Article 117(1) of the Bankruptcy Act prior to the amendment by Act No. 5519 of Feb. 24, 1998), and if a stock company is in excess of its obligation, the company may not be in a state of bankruptcy. In addition, even if a decision to dispose of the company’s property pursuant to the Company Reorganization Act has been rendered with respect to a stock company in excess of its obligation, the company may be declared bankrupt (Article 23(1) of the Company Reorganization Act), since the decision to commence reorganization proceedings, to discontinue its reorganization proceedings, or to refuse its reorganization proceedings, becomes final and conclusive (Article 23(1) of the Company Reorganization Act). Thus, the company may not be deemed to have been recovered under the risk of bankruptcy, and the company shall not be deemed to have continued to have been in a state of concern of bankruptcy, notwithstanding the decision to dispose of the company’

According to the reasoning of the judgment below and the records, the new public corporation (limited to the new public corporation) was established on February 24, 1967 with the main purpose of construction business and developed above 20th in the domestic construction contract order in 1997. However, since 1994, the increase of unsold apartment units due to the invasion of the housing competition, the increase of loans for the promotion of redevelopment projects, etc., the financial landscape due to the default of large enterprises after 1997, and the increase of financial burden accordingly, etc., and the payment of the bankruptcy was made on June 2, 1997. The total assets of the new public corporation as of June 30, 1997 were merely KRW 1.2,237 billion, and the new public corporation was not likely to be in excess of the successful bid price as of June 30, 1997.

Meanwhile, according to the facts established in the reasoning of the judgment below, since the suspension of transaction was revoked prior to the date of the examination of successful bid in this case by the financial institution due to the default of the issuing bill, and it can be known that the suspension of transaction had been resumed with some banks. As such, the suspension of payment presumed to be insolvent, and as in the case of a corporation, the excess of the debt, other than the default, constitutes the cause of bankruptcy, shall not be deemed to have been recovered since the financial transaction was resumed only without the resolution of the excess of the debt, and thus, it cannot be said that the new financial transaction was restored under the possibility of bankruptcy.

Therefore, the court below's rejection of the applicant's assertion that the applicant's motion for provisional disposition was dismissed on the ground that Korea-Japan could not go against or go bankrupt as of September 20, 1997, which was at the time of the time of the qualification examination for successful bid of this case, and that the applicant's motion for provisional disposition was all dismissed, and there is no error of law as otherwise alleged in the ground of appeal, such as the misunderstanding of legal principles of the Company Reorganization Act. The applicant's ground of appeal as to this point cannot be accepted.

2. On the second ground for appeal

Whether a successful tender examination of a bidder at the lowest price was conducted in a competitive tender that imposes a burden on the National Treasury or a local government shall be determined on the basis of statutes and facts at the time the examination was conducted, and any subsequent change in circumstances shall not be considered.

Therefore, as long as the decision of the respondent's failure to award the contract was duly made according to objective facts at the time of the determination that the new public service could have been in a state of concern of insolvency or bankruptcy, even if the new public service, due to changes in circumstances thereafter, went out of the situation where there is concern of insolvency or bankruptcy, the decision of failure to award the contract which was duly performed, once due to such changes in circumstances, does not constitute a new and

The judgment of the court below to the same purport is just, and there is no error of law as pointed out in the grounds of appeal, and the precedents cited in the grounds of appeal are not appropriate to be invoked in this case. The grounds of appeal by the applicants as to this point cannot be accepted.

3. On the third ground for appeal

The lower court’s determination on the validity of the instant tender is merely an additional determination, and thus, insofar as it was justifiable in the lower court’s determination on September 20, 1997 at the time of the qualification examination for the instant bid, which deemed that the Korea-Japan was in a situation likely to be in default or bankruptcy as of September 20, 1997, which was at the time of the qualification examination for the instant bid, to dispute the validity of the instant

4. Therefore, all appeals are dismissed, and the costs of appeal are assessed against the appellant. It is so decided as per Disposition by the assent of all Justices who reviewed the appeal.

Justices Jeong Jong-ho (Presiding Justice)