The administrator of the same company, the administrator of the company's career of the reorganization company, the administrator of the same company, the taking over of the lawsuit at the source (Law Firm Haak, Attorney Park Jong-seok et al.,

Ansan Mutual Savings Bank (Law Firm Hanyang, Attorneys Park Jong-soo et al., Counsel for defendant-appellant)

July 29, 2005

Seoul Central District Court Decision 2004Gahap28448 Delivered on October 8, 2004

1. The judgment of the first instance is revoked, and all the plaintiff's primary and conjunctive claims are dismissed;

2. The total costs of the lawsuit shall be borne by the plaintiff.

1. Purport of claim

The main claim is that the liquidation company's career does not exist in the liquidation obligation of KRW 461,710,528 against the defendant of the liquidation company based on the act of endorsement and transfer of one promissory note stated in the attached Table of the issuance of the department store on March 17, 1997.

Preliminary Claim: Suwon District Court Decision 97Da82957 delivered on January 21, 1998, which rejected compulsory execution based on the defendant's reorganization company's course.

2. Purport of appeal

It is as set out in paragraphs 1 and 2 of this Decree.

1. Basic facts

The following facts are not disputed between the parties, or can be acknowledged by comprehensively taking into account the following facts: Gap evidence 2, Eul evidence 3-1 through 9, Eul evidence 4, Eul evidence 5-1 through 10, Gap evidence 6, Gap evidence 7-1 and 2, Gap evidence 8, Gap evidence 31 through 33, Eul evidence 34-1, Eul evidence 34-1, Eul evidence 1-2, Eul evidence 2 through 5, Eul evidence 6-1 through 4, Eul evidence 7-1 and 7-2, Eul evidence 8, Eul evidence 10-1 through 4, and testimony of new witness of the court of first instance.

A. On March 13, 1997, SPS A Co., Ltd. (hereinafter “SP”) supplied goods to Cheongjin-ro department stores (hereinafter “Cheongjin-si department stores”) to pay the price. On March 17, 1997, Cheongjin-ro department stores (hereinafter “Cheongjin-si department stores”) received one promissory note (hereinafter “the Promissory note in this case”). On the back of the aforesaid promissory note, Cheongjin-do department stores (hereinafter “Cheongjin-jin”) received a endorsement from the issuer Cheongjin-jin department stores, the issue date, March 17, 1997, the issue date, July 14, 1997, the issue date, the issue date, and the payment place, the Seoul Bank’s main office, and the addressee’s blank), respectively, and on the back of the said promissory note, the endorsement was made by the company affiliated with Cheongjin-jin-si, a corporation affiliated with the department firm (hereinafter “Jjin-jin”).

B. On February 19, 1997, the Defendant entered into a bill transaction agreement with Sejong Bank, and on March 19, 1997, lent KRW 1,000,000 to Sejong Bank in the form of a bill discount, and received the Promissory Notes in the form of a three-dimensional endorsement. Thereafter, the claim for the Promissory Notes in this case was paid out of part of the above loans, and the amount of the said claim remains at KRW 604,735,986. The Defendant was unable to receive the remainder of the obligations, and the payment was refused on May 19, 197 on the ground that the Promissory Notes was paid at the office of the Seoul Bank's Cheongju branch but was presented for non-transaction.

C. Accordingly, on November 26, 1997, the Defendant filed a lawsuit claiming amount based on the Promissory Notes (Seoul District Court Decision 97Da82957 delivered on November 26, 1997). As a result, the Defendant did not appear at the date of pleading and submit written answers and other legal documents despite being summoned due to service by public notice by public notice in the above case, the above court rendered a judgment that, on January 21, 1998, it was deemed that the department store, career, and rent were led to the Defendant’s assertion, and that, on the ground that Article 139 of the former Civil Procedure Act (amended by Act No. 6626 of Jan. 26, 2002) applied the foregoing Article 139 of the former Civil Procedure Act (amended by Act No. 66626 of Jan. 26, 200) to the Defendant jointly with Cheongjin-jin department department, career, and rent, and the Defendant paid the amount from 130% to 198.

D. From April 30, 1998 to June 30, 2001, the Defendant received payment of KRW 290,031,331 in all five times from the composition procedure of the Cheongjin-ro department store, and met the principal of the instant promissorysory note with payment of KRW 290,031,331. Ultimately, the claim of the instant promissory note amount remains in the principal amount of KRW 314,704,655.

E. Meanwhile, from the beginning of 1997 to the end of 5th day of September 9, 197, a disposition of suspension of transactions was issued by a bank due to default on payment on September 9, 1997. On February 3, 1998, Seoul District Court applied for commencement of composition to the above court on September 8, 1997, and the approval of composition was issued on March 19, 198. According to the conditions of composition, non-financial institution creditors' claims were exempted from interest and were repaid in installments each year from 1998 to 200.3 years before the end of 1999, and the principal was not paid at the end of 200 to the end of 200,000 won, and the principal was not paid at the end of 3 years after the lapse of 5 years to the end of 200 to 3 years after the expiration of 203 years to 207.3 years after the expiration of the period of redemption.

F. At the time of the decision to commence the above company reorganization procedure, the Seoul District Court appointed an interest source as a manager, and the term of office of the interest source was newly appointed as a manager on April 30, 2004.

G. Upon the commencement of the company reorganization procedure for the career, the defendant attached as evidentiary documents a copy of the Promissory Notes in this case and a bill transaction agreement between the three mines on June 24, 2003, and stated the cause and contents of the reorganization claim as "liability obligations to the department stores in the career of the career of the career of the career of the career," and reported the total of KRW 314,704,655, and the total of KRW 461,425,186 of the remaining principal of the Promissory Notes in this case and the delay damages therefor as reorganization claim. However, this objection was raised against the above reported claim on September 24, 2003 on the ground of the provisions of Article 78 of the Company Reorganization Act.

H. The defendant received the notice of objection from the Seoul District Court on October 16, 2003 but did not take any measure against it. The above claim is anticipated to be excluded from the reorganization proceedings. On November 26, 2003, the defendant again submitted 314,704,655 won for the remaining principal of the claim of promissory notes based on the judgment of this case and the following day of the last repayment of the claim, from July 1, 2001 to May 13, 2003, 147,05,710,528 won for delay with 25% interest per annum from July 13, 2003, which is the day immediately preceding the commencement date of the company reorganization procedure, as a reorganization claim, and this constitutes a double reorganization claim report under Article 7 of the Company Reorganization Act. This constitutes a ground for double reorganization claim report under Article 8 of the aforementioned Act.

2. Determination:

The plaintiff asserts as follows, and primarily, the non-existence of the Promissory Notes of this case is confirmed, and the plaintiff seeks to exclude the executory power over the judgment of this case. Thus, it shall be judged in sequence.

A. Determination on the assertion of forfeiture of rights

(1) The plaintiff's assertion

The Plaintiff reported KRW 461,425,186 to the Defendant on June 24, 2003 as a reorganization claim, and the administrator of the course at the time raised an objection to the total amount of the above claim on September 24, 2003, the Defendant did not bring an action for confirmation of the reorganization claim within one month from the date of general investigation. Thus, the claim of the Promissory Notes was forfeited, and thereafter, the Defendant’s subsequent completion report made on November 26, 2003 is a duplicate report on the same claim, and there is no legitimate completion reason.

(2) Determination

On the other hand, Article 152 of the Company Reorganization Act provides that an objector who has a final judgment among the reorganization claims may raise an objection only in accordance with legal procedures that the company can take, as a matter of principle, against the reorganization claims with respect to which a final judgment has been made, such as the Promissory Notes in this case, shall be deemed liable to release the Plaintiff, who is an objection. However, considering that Article 147 and Article 152 of the Company Reorganization Act provide for an essential difference in the subsequent procedures for objection against the reorganization claims with no title or final judgment, in view of the fact that Article 152 of the Company Reorganization Act provides that the same shall apply to the reorganization claims with title or final judgment, a creditor shall submit a lawsuit seeking confirmation of the reorganization claims in accordance with Article 147 of the same Act by the date of the investigation into the reorganization claims, by clearly stating the purport thereof at the time of the report of the reorganization claims, or by the date of the investigation into the reorganization claims. If a creditor neglects to do so, it cannot be treated as a reorganization claims with title or final judgment.

As to this case, it would be sufficient to specify the cause and contents of the claim by distinguishing the cause and contents of the claim from other claims in case of a report on reorganization claims, and it would be sufficient to specify the cause and contents of the claim by means of evidential documents, etc. submitted at the time of report (see Supreme Court Decision 2000Da70217, Jun. 29, 2001). The defendant's report on reorganization claims as of June 24, 2003 and November 26, 2003 were different from those of the defendant's report on "guaranteed obligation" and "debt obligations based on the final and conclusive judgment". However, it is reasonable to view that the same promissory note was attached to the same claim and all evidential documents were presented as 314,710,528 won, and that the defendant's report on reorganization claims as of June 24, 2003 were made with an original copy of this case's report on 200.3 billion won.

Therefore, the Defendant’s claim on the Promissory Notes constitutes a reorganization claim with a final judgment under Article 152 of the Company Reorganization Act, and thus, it cannot be deemed that the instant promissory Notes were forfeited even if the Defendant did not file a lawsuit seeking confirmation of the reorganization claim within one month from the date of investigation. Accordingly, the Plaintiff’s assertion on this part is without merit.

B. Determination as to the denial of the endorsement act

(1) The plaintiff's assertion

On March 17, 1997, the Plaintiff: (a) endorsed the Promissory Notes in the instant case without any consideration on behalf of the department stores, Cheongjin-jin, an affiliate, within six months from the time of the suspension of payment and the time of applying for commencement of composition; and (b) asserts that the right to set aside is exercised as it constitutes a gratuitous act under Article 78(1)4 of the Company Reorganization Act.

(2) Determination

First of all, if the company reorganization procedure has been commenced while the decision of approval of composition has become final and conclusive and the repayment has been made in accordance with the conditions of composition, whether the application for the suspension of payment or the application for the commencement of corporate composition which was the cause of composition falls under the "suspension of payment, etc." under Article 78 (1) of the Company Reorganization Act.

(1) On the other hand, (1) upon the application for commencement of a company reorganization procedure, the court shall make a decision on authorization of composition where the debtor can continue to meet the conditions of composition after examining the debtor's ability to repay all obligations, such as composition obligations and new commercial transaction obligations. Accordingly, if a decision on authorization of composition becomes final and conclusive, it is difficult to deem that the debtor is in the status of suspension of payment, and (2) as provided in Article 78 (1) 4 of the Company Reorganization Act, the term "act performed within six months after or before the suspension of payment" is directly connected to the commencement of a company reorganization procedure after the suspension of payment, etc. (where the company reorganization procedure commences during the progress of the composition procedure, etc.), it cannot be deemed that the above conditions are met after the commencement of the company reorganization procedure as in this case, and it is difficult to view that the first application for commencement of the company reorganization procedure is in the progress of the company reorganization procedure after the completion of the procedure under the conditions of composition procedure, and it is difficult to see that the grounds for the commencement of the company reorganization procedure are in progress within the period, regardless of prior payment suspension of composition procedure.

Therefore, this part of the plaintiff's assertion is without merit.

C. Determination as to the allegation of denial of omission, such as neglect of oral argument

(1) The plaintiff's assertion

Although the Plaintiff did not bear the obligation of recourse, the Plaintiff asserts that the Promissory Notes of this case was issued in favor of the Defendant on the basis of constructive confession because the Defendant failed to present arguments in the lawsuit claiming the amount of the Promissory Notes in accordance with the Suwon District Court 97Kadan82957, Nov. 26, 1997, and failed to present any means of attack and defense, and that the Defendant rendered a judgment in favor of the entire Defendant. It constitutes “an act of knowing that the company would prejudice the reorganization creditors, etc.” under Article 78(1)1 of the Company Reorganization Act or “an act of undermining the reorganization creditors, etc. after the application for suspension of payment, bankruptcy, commencement of composition, or commencement of reorganization proceedings is filed” under Article 78(1)2 of the Company Reorganization Act and thus, the Plaintiff asserts that the avoidance power is exercised.

(2) Determination

On the other hand, Article 78 (1) 1 and 2 of the Company Reorganization Act refers to an act of reducing the whole property of the reorganization company by deviating from the general property of the reorganization company which is a joint security of the reorganization creditor. The act subject to avoidance is an act subject to avoidance, such as confession under the Civil Procedure Act which is an act under private law, waiver or recognition of claim, judicial compromise, neglect of pleading or defense, etc. Thus, if the defendant was sentenced to a judgment in favor of the whole of the reorganization company due to failure to submit any means of attack and defense, as alleged by the plaintiff, even though the course of the lawsuit claiming the amount of promissorysory notes in this case is not a legal obligation, it cannot be seen as an act subject to avoidance of payment intentionally or crisis. However, since it is difficult to find that the promissorysory notes in this case were presented as payment in blank, it cannot be viewed as an act subject to revocation of payment suspension of payment of the reorganization bill in this case's first way with the statement of evidence No. 5-2, and no other evidence exists to deem it as an act subject to suspension of payment of the settlement.

3. Conclusion

Therefore, the defendant has a reorganization claim of KRW 461,425,186 based on the Promissory Notes of this case, and the plaintiff's main and conjunctive claims of this case are all dismissed as it is without merit. The judgment of the court of first instance with different conclusions are unfair, and all of the plaintiff's claims are dismissed. It is so decided as per Disposition.

Judges Noh Young (Presiding Judge)

In case of being unable to sign and seal by order of judicial research for consideration;