[1] In a case where bankruptcy is declared pursuant to Article 6 (1) of the Debtor Rehabilitation and Bankruptcy Act, the method of determining the existence and scope of a bankruptcy claim or right to foreclose outside bankruptcy, and whether legal benefits are extinguished to determine the existence and scope of the claim through the inspection procedure of rehabilitation claim or rehabilitation security right solely because the rehabilitation procedure has been abolished after the rehabilitation procedure has been decided (negative)

[2] Where a decision is made on commencement of rehabilitation procedures for the debtor or the mortgagee of the right to collateral security after the establishment of the right to collateral security, whether the original claim arising from a new transaction relationship that occurred thereafter is secured by the right to collateral security (negative in principle

[3] The case holding that the court below erred in the misapprehension of legal principles, in case where Gap corporation reported Eul corporation's rehabilitation security right as to the right to collateral security upon the establishment of the rehabilitation procedure with respect to Eul corporation's real estate held by Eul as its current and future obligation as collateral obligation after it was established for Eul corporation's current and future obligation as collateral obligation, and Eul corporation's administrator raised objection to Eul corporation's rehabilitation security right and the procedure was in progress after Eul filed an application for a judgment in claim allowance proceedings for rehabilitation security right; Eul corporation's rehabilitation procedure was abolished and its rehabilitation procedure was declared bankrupt pursuant to Article 6 (1) of the Debtor Rehabilitation and Bankruptcy Act; the above real estate was sold at the auction procedure conducted at the trustee's request and deposited the amount of dividends to Gap corporation as collateral, the court below held that Gap corporation was entitled to receive the entire deposit on the premise that Gap corporation's rehabilitation security right exists as reported

[1] In a case where bankruptcy is declared pursuant to Article 6(1) of the Debtor Rehabilitation and Bankruptcy Act, the existence and scope of a bankruptcy claim or right to foreclose outside bankruptcy in the bankruptcy proceedings shall be determined by reflecting all the circumstances such as whether the creditor’s right has a rehabilitation claim or right to foreclose outside bankruptcy in the previous rehabilitation proceedings after the creditor’s right became final and conclusive as a rehabilitation claim and a rehabilitation security right, etc., according to the approved rehabilitation plan, and the repayment is made until the time bankruptcy is declared bankrupt. When a decision to authorize the rehabilitation plan is made, the rehabilitation creditor’s right, etc. is substantially modified according to the rehabilitation plan and the effect of the rehabilitation plan is not affected even if the rehabilitation procedure is discontinued (Articles 252(1) and 288(4) of the Debtor Rehabilitation Act). Therefore, solely on the ground that the rehabilitation procedure is discontinued after the rehabilitation plan is

[2] Where a decision is made on the commencement of rehabilitation procedures with respect to a debtor or a person who created the right to collateral security, the secured obligation of the right to collateral security shall be determined based on the decision on commencement of rehabilitation procedures, barring special circumstances. Therefore, there is no room for a principal claim arising from new transaction relations arising after the establishment

[3] The case holding that, in a case where Gap corporation established a right to separate settlement with respect to Eul corporation's real estate owned by Byung as well as all future debts as collateral and reported rehabilitation security right upon Eul corporation's commencement of rehabilitation procedures with respect to Eul corporation's real estate as collateral, Eul corporation's rehabilitation security right was in progress upon Eul's objection, and Eul corporation's administrator filed an application for a judgment in allowance proceedings for rehabilitation security right, the rehabilitation procedure was abolished and the amount of dividends to Gap corporation, which is the collateral security right, was sold at the auction procedure conducted upon the bankruptcy's application after the bankruptcy was declared pursuant to Article 6 (1) of the Debtor Rehabilitation and Bankruptcy Act, as long as Eul's bankruptcy is declared, the issue of whether Gap corporation can receive dividends based on the right to separate settlement, and in particular, as the rehabilitation procedure was abolished after the rehabilitation plan for Eul was approved, and the scope of existence of Gap corporation's rehabilitation security right should be determined based on whether Gap corporation's new rehabilitation security right should be received through the rehabilitation security right's new rehabilitation claim inspection procedure and its scope should be confirmed.

[1] Articles 6(1), 170, 252(1), 288(4), 411, and 423 of the Debtor Rehabilitation and Bankruptcy Act / [2] Article 141(1) of the Debtor Rehabilitation and Bankruptcy Act, Article 357 of the Civil Act / [3] Articles 6(1), 141(1), 170, 252(1), 288(4), and 41 of the Debtor Rehabilitation and Bankruptcy Act, Article 357 of the Civil Act

[1] Supreme Court Decision 2016Da254467, 254474 decided Dec. 10, 2020 (Gong2021Sang, 179) / [2] Supreme Court Decision 99Da6649 decided Jun. 1, 2001

The Bankruptcy Trustee, the Nonparty (Law Firm Seo-woo, Attorneys Kim Young-hoon et al., Counsel for the plaintiff-appellant)

Sejong District Court Decision 200Na11488 decided May 1, 200

Seoul High Court Decision 2017Na207195 decided October 24, 2018

The judgment below is reversed. The case is remanded to Seoul High Court.

The grounds of appeal are examined.

1. A. In a case where bankruptcy is declared pursuant to Article 6(1) of the Debtor Rehabilitation and Bankruptcy Act (hereinafter “Bankruptcy Act”), the existence and scope of the rights of creditors in the bankruptcy procedure should be determined by reflecting all the circumstances such as the existence of any bankruptcy claim or any right to foreclose outside bankruptcy, in which creditors’ rights are finalized in the previous rehabilitation procedure, and the rehabilitation plan is modified according to the rehabilitation plan authorized after rehabilitation claims, rehabilitation security rights, etc. are finalized and repaid until the time bankruptcy is declared bankrupt. In a case where authorization for the rehabilitation plan is determined, the rights of rehabilitation creditors, etc. are substantially modified according to the rehabilitation plan and the effect of the rehabilitation plan is not affected even if rehabilitation procedures are discontinued (see Articles 252(1) and 288(4) of the Debtor Rehabilitation Act). Therefore, solely on the ground that rehabilitation procedures are discontinued after the rehabilitation plan is finalized, it cannot be readily concluded that the legal interest to determine the existence and scope of such claims is extinguished through the rehabilitation claim or rehabilitation security right inspection procedure (see Supreme Court Decision 2016Da25467474, Dec. 1

B. Meanwhile, where a decision is made on the commencement of rehabilitation procedures with respect to the debtor or the mortgagee after the establishment of the right to collateral security, the secured obligation of the right to collateral security becomes final and conclusive on the basis of the decision on commencement of rehabilitation procedures, barring special circumstances. Thus, there is no room for the principal claim arising from new transaction relations arising after the establishment of the right to collateral security (see Supreme Court Decision 9Da6649 delivered on June 1, 2001,

2. The reasoning of the lower judgment and the record reveal the following facts.

A. The defendant's acquisition of collateral security and receipt of promissory notes

On July 28, 2012, the Defendant, from February 2004 to the present, was created a collateral security (hereinafter “instant collateral security”) of the maximum debt amount of KRW 300 million with respect to the instant real estate owned by it from the leap Culture Co., Ltd., a customer of Hyundai Branch Sales (hereinafter “leap Culture”). On the same day, the Defendant received a promissory note as of July 25, 2018, with the face value of KRW 300 million issued jointly by Hyundai Branch Sales and leap Culture, and the due date of payment. The collateral obligation of the instant collateral security includes the goods payment obligation against the Defendant of Hyundai Branch Sales as well as all obligations at present and in the future.

B. The rehabilitation and bankruptcy proceeding of a leap culture

1) On December 28, 2012, the Seoul Central District Court rendered a decision to commence rehabilitation proceedings with respect to the leap culture. The Defendant reported the rehabilitation security right regarding the instant right to collateral security in the rehabilitation proceedings, and filed an application for a final inspection judgment on the rehabilitation security right as the manager of the leap culture did so.

2) The Seoul Central District Court decided to authorize the rehabilitation plan on June 4, 2013, which is classified as “undetermined rehabilitation security right” and accordingly, the Defendant’s instant collateral security right is classified as “undetermined rehabilitation security right,” and “in the event an undetermined claim is confirmed as a rehabilitation security right, it shall be repaid according to the method of alteration of the right and reimbursement of the most similar rehabilitation security right in light of the nature and content of the right.”

3) The Seoul Central District Court decided to discontinue the rehabilitation procedures on December 23, 2013 with respect to the leap culture. On January 7, 2014, the Seoul Central District Court appointed the Plaintiff as the trustee in bankruptcy (No. 2014Hahap6) under Article 6(1) of the Debtor Rehabilitation Act.

C. Auction procedure and distribution of the instant real estate

1) The auction procedure regarding the instant real estate was conducted upon the request of the Plaintiff, who is the trustee in bankruptcy, and the said real estate was sold on January 11, 2017.

2) On February 10, 2017, the auction court distributed KRW 3,203,831,152, which was the date of distribution, to the Defendant, who is the mortgagee of the instant case, as the holder of the right to collateral security, the remaining amount of KRW 758,745,617, out of KRW 758,745,617, remaining amount remaining after the distribution to the holder of the right to collateral security, and distributed the remainder of KRW 458,745,617 to the Plaintiff, who is the applicant for the auction.

3) On February 25, 2017, the Republic of Korea (Seoul Eastern District Court deposit official) deposited KRW 300,003,489 (hereinafter “instant deposit”) with the Seoul Eastern District Court Decision 2017No798, the sum of the dividend and interest (hereinafter “instant deposit”).

3. The lower court determined as follows based on its stated reasoning.

A. The Defendant’s instant right to collateral security is not subject to forfeiture of rights under Article 251 of the Debtor Rehabilitation Act, despite the fact that the rehabilitation plan approval plan for the leap culture became final and conclusive.

B. The secured debt of the instant right to collateral security includes the current and future debt such as the price debt for the goods against the Defendant of Hyundai Branch Sales. At the time of the decision to commence the rehabilitation procedure for leap Culture, the amount of the above goods price claim is KRW 345,361,617, and the amount of the above goods price claim at the time of the date of distribution of the instant auction procedure is KRW 307,619,155. Thus, the secured debt of the instant right to collateral security exists, and the said KRW 300 million distributed to the Defendant is the amount within the scope of the secured debt.

C. Therefore, it is reasonable to distribute the above KRW 300 million to the Defendant. Therefore, the Plaintiff’s claim against the Defendant on a different premise is without merit.

4. However, in light of the aforementioned legal principles and records, the lower court’s determination that the Defendant’s right to collateral security of this case is not subject to forfeiture under Article 251 of the Debtor Rehabilitation Act is reasonable, but further, despite the fact that the Defendant’s rehabilitation security right still exists as reported by the Defendant, the part that determined that the Defendant had the right to receive the entire deposit is difficult to accept for the following reasons.

A. As long as bankruptcy is declared with respect to the leap culture, in the instant auction procedure, the issue of whether the Defendant is entitled to receive the dividends of the instant case on the basis of the instant right to separate settlement and the contents thereof must be determined by whether the Defendant is the holder of the right to separate settlement. In particular, in the instant case, since rehabilitation procedures have been abolished and the bankruptcy has been declared after the rehabilitation plan regarding the leap culture was approved, first, in the previous rehabilitation procedure, examining whether the existence and scope of the Defendant’s rehabilitation security right has been confirmed in the previous rehabilitation procedure and how the rehabilitation plan regarding the leap culture has been modified through the confirmed Defendant’s rehabilitation security right and the rehabilitation plan with the secured claim, and only on the basis of the result, it should be determined

B. However, the existence and scope of the Defendant’s rehabilitation security right is an objection to the Defendant’s report on the rehabilitation security right, and the procedure was followed by the Defendant’s application for the final inspection judgment, and thus, it should be determined according to the result of the judgment. The fact that the said final inspection judgment is currently pending at Seoul Rehabilitation Court 2013.570, is significant in this court.

C. In addition, if the existence and scope of the Defendant’s rehabilitation security right becomes final and conclusive as of the date of the decision on commencing the rehabilitation procedure in this case, barring any special circumstance, there may be no room for the original claim arising from a new transaction between the Defendant and Hyundai Branch Sales to be secured by the instant collateral security right. Therefore, the lower court should have examined whether the Defendant’s new obligation incurred after the confirmation of the secured obligation of this case after the establishment of the secured obligation of this case, as the holder of the right to separate settlement,

Nevertheless, the lower court acknowledged the Defendant’s rehabilitation security right without examining how the Defendant’s rehabilitation security right became final and conclusive as a result of the aforementioned final inspection judgment, how the instant mortgage will be modified according to the Foreign Culture Rehabilitation Plan, and whether the Defendant’s rehabilitation security right is not included in new claims after the Defendant’s rehabilitation security right became final and conclusive as of the date of the decision on commencing rehabilitation procedures with respect to the secured claim reported by the Defendant in the instant auction procedure. In so doing, the lower court erred by misapprehending the legal doctrine on confirmation of the rehabilitation security right as a result of the decision on commencing rehabilitation procedures and alteration of rights

5. Therefore, the lower judgment is reversed, and the case is remanded to the lower court for further proceedings consistent with this Opinion. It is so decided as per Disposition by the assent of all participating Justices on the bench.

Justices Kim Jong-hee (Presiding Justice)